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Wednesday, 12 September 2012

Is it possible that some lowly nostalgia blog that regularly posts on pancakes and miniskirts would have the answer to America's economic crisis? Not just possible, folks. Reality.

Attribute it to my 'total body immersion' in decades past, if you like. Perhaps it gives me a unique perspective... and mad skills in historical analysis.  Or (more likely) I'm just stating the obvious, but the obvious is often beaten into exile by the media and the political machine.

The problem is simply this: America (and the EU as well) are not playing on a level playing field. But we ourselves have put us in a position to fail - of extreme disadvantage.... of short term gains for global companies and profound losses for the bottom 99 percent.

Take Apple for instance.  They could have kept their manufacturing in the US, but they instead chose to stay solvent... they made the only choice they could make, for indeed it was not a choice.  To provide competitive prices it simply had to be done.

I don't like relaying long quotes on Retrospace; this is a blog not a term paper.  However, this quote from an Apple exec sums it up perfectly. [source]

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight. 
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. 
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

In the United States and Europe that would be illegal! And for those of you who think we should tighten up and 'learn something' from these impoverished workers, think again.  What is their quality of life? And why were we able to be so damn successful in the 1950s through the 1990s without that kind of Third World 'work ethic'?

The answer, my friend, lies in the fact that Bill Clinton and his ilk 'leveled the playing field'.... and at that point we entered a whole new ballgame.  The thought, I guess, was that we would leave the menial labor to the poorer countries in the hopes that their overall dispositions would improve; meanwhile, the US and Europe would sit back and 'man the ship' with our army of engineers, scientists, and highly technical workforce.  WRONG.

Turns out, we've been left in the dust on all fronts. In Asia, 21% of the students get an engineering degree, while in the U.S. it's a measly 4.5%.  Granted, their definition of 'engineer' is often different than ours [source], and their emphasis is perhaps more centered on quantity over quality - the fact remains that with 1.3 billion in China and 1.2 billion in India, we can no longer assume we are the intellectual masters of the global economy.

Think for a moment.  How did Wal-Mart get to be the United States' biggest company? Was it their superb customer service? Was it their brilliant advertising? Was it the wonderful shopping experience they provide? Hell no. They made their crap cheaper than everyone else's and rolled over the competition town by town.  Without the Great Leveling of the playing field via NAFTA and GATT this would never have been possible.

And so here we are.  Our economy has been floundering for years.  Our banks have resorted to Ponzi schemes whilst our billionaires keep their loot in the Camen Islands.  Meanwhile, the country reaches 16 trillion in debt, and the folks in charge of our fiscal policy in Washington are bought and paid for - no longer representing Middle America's greater good.  Some of you listen to Limbaugh and Hannity attack the left, while others of you listen to Maddow and Mahr attack the right.  All the while this Ship of Fools is headed for that great big iceberg.... which is only a knot away.

Fortunately, the answer is quite simple.  Painful but simple.  Americans will need to choose country over globalism.  We re-institute the long tradition of tariffs. We require American companies to manufacture their goods in America or suffer steep penalties.  

Of course, the immediate downside is our prices will go through the roof.  Imagine buying a toaster  not made by homeless 8 year old Filipino orphans!  Instead it's made in Dayton, Ohio.... by (gasp) workers earning a living wage!  And imagine, if you will, buying that toaster not at Wal-Mart which owes its bread and butter to NAFTA and GATT and 0.000 tariffs..... but instead at an appliance store where (gasp again) the workers earn a living wage.  It's unthinkable.  Your simple little toaster will go from $29.99 to $54.00 overnight. 

But, guess what? If you draw back and look at the bigger picture, you'll see that there are hidden costs associated with that cheap foreign made toaster, or iPhone, or shower curtain ring, or whatever.   (1) How much do you pay to the government to cover unemployment costs? (2) How much do you pay the government to handle rampant crime which is unarguably a byproduct of a downward economic climate? (3) How much do you pay for bankruptcy bailouts and foreclosures? (4) How much will you pay for interest on that $16 trillion national debt? (5) And how much does the nation's coffers lose in tax revenue to global companies that set up shop in Sri Lanka and nest their holdings in the Camen Islands?  The list of 'hidden' costs goes on and on.

Suddenly, that toaster isn't so cheap after all.

And a final note: You will not hear Obama or Romney address this.  Our system is broken.  Wrecked by the profiteers.  Our politicians are bought and our public is numbed by a lazy, dumbed down, agenda driven media.   But anyone whose taken a single history class knows that when the masses get too poor, when they are living hand to mouth while the rich eat cake, things tend to get ugly.  And I don't want things to get ugly.


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