Work Your Way Out

On the back of this industrial output, rose America’s middle class. High-paying manufacturing jobs in turn helped spur a robust and growing economy that had little dependence on foreign nations for manufactured goods and armaments...However, manufacturing, as a share of the economy, has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent of the economy, and in 2004, it accounted for just 9 percent...The loss of the manufacturing industry manifests itself most clearly in job losses. - The Trumpet

The wing-nut shell game continues as they on the one hand decry the loss of jobs and the high unemployment figures and yet at the same time were the architects of the policies that gutted the manufacturing sector which drove the job creation. The unfortunate truth that the politicians, pundits, and CEO’s refuse to tell the American public is that unless we retool our manufacturing base we will continue to have high unemployment. The current and future high unemployment numbers are not solely based on the recession. Prior to the recession we were seeing unemployment rising as the economy was supposedly humming along.

The historic fact is that you get out of a deep recession or depression by working your way out. You don’t get out of it through austerity measures or attacking the unemployed. You didn’t get out of it by giving tax breaks to rich folks. You build or make things. This presents us with an impossible scenario. We no longer make things. The engine that would power our economy back to profitability and high employment is now driving the economies of China, India, and Singapore. What we are witnessing in America today are the results that were predicted but roundly denounced when the whole outsourcing process began. You don’t have to be a Harvard educated economist to figure out that if you ship your middle-class creation mechanism overseas that you will have fewer middle-class people. In fact it’s probably easier to understand if you’re not Harvard educated.

Remember, how we were going to replace all of those “dirty” manufacturing jobs with “clean” new technical jobs. While granted there were people who were able to make the transition from the manufacturing sector to the technical sector the majority of people were not so lucky. Many of those living wage manufacturing jobs were replaced with low wage service sector jobs which did not offer benefits that many people were accustomed to. What the economist’s neglected to tell us was that there was going to be a segment of the population who would not be able to transition into the new technical jobs. This magnitude in the numbers of people who can’t transition is the real cause of the term “jobless” recovery.

According to one study, every 100 jobs in durable manufacturing support 372 jobs in other industries, while every 100 jobs in business services supports 164 jobs elsewhere in the economy. We are losing good jobs which will stimulate the economy (and we are left with the shit jobs). – Stephen Hanson

As the American labor force has become more efficient and with the advent of robotics and other technological advances this places more pressure on an already shrinking labor force. When you combine these with the changes in the attitudes of the corporate elite from thinking of what is best for America to what is best for their short-term profits you have the current situation we as a nation find ourselves in. Let’s be clear the early industrialists were no angels and they clearly made enormous profits on the backs of their workers but one thing many of them understood was that they were Americans and they were guardians of a dream (the American dream) and their long-term success was tied to their workers long-term success. At no point in American history has there been this large of a discrepancy between the corporate elite’s salaries and their workers. The really sad fact for most Americans is that the media and the politicians have been co-opted by the wealthy into this mind game that none of the policies they have instituted have led to this American trauma.

The current state of affairs with the American economy is not some accident of nature or some perfect storm of naturally happening occurrences it was orchestrated by a group of greedy and unscrupulous people who presided over one of the largest transfers of wealth in the history of the world. And yet despite all evidence to the contrary we have these shell groups who on the one hand claim to be against bail-outs and yet they are being funded by those who created the need for the bail-out. This could only be created in America. Where else would you have a group of peasants with pitch forks and torches at the gates of the wealthy but not to demand equality but to bring more riches to them? It would be funny if it weren’t so tragic.

Every person familiar with business knows that labor is always your biggest expense and whatever you save in labor goes directly into your pocket, it is this mentality that has caused this new class of corporate titans to join the race to the bottom searching the world for the lowest labor costs they can find. We have supported our own demise through allowing the politicians to give tax-breaks to those who have shipped our jobs overseas.

There are those who claim that the days of American manufacturing are gone and will never return. They claim we are better served as a country because of it. I disagree because if you look at the fastest growing economies in the world they all make things. The other thing that is not being discussed is that when you outsource your production you also outsource your ability to innovate. Innovation is primarily done through the production process by workers who through the process recognize ways to create a more efficient or even a better way to create a product. Those innovations are now being made overseas. It’s not surprising that all of the new green and innovative products are now being developed and manufactured overseas. We have not only lost our production capabilities we have also lost our ability to innovate.

If we are to regain our leadership in the world we have to become a producer again. We will have to do it better and cleaner than we did it in the past and how they are doing it overseas. As a country we have to make some tough decisions about our future. Are we going to continue to ignore the evidence and continue to listen to the greedy or will we demand a return to the principles and policies that created the largest middle-class in history? That is the choice that lies before America.

“I have come to a resolution myself as I hope every good citizen will, never again to purchase any article of foreign manufacture which can be had of American make be the difference of price what it may” – Thomas Jefferson

Read more!

Who Are You Gonna Believe Me or Your Lying Bank Accounts?

Well, its finally official, we are not heading for a recession according to President Bush. In a news conference, the President stated that despite those naysayers and dooms-dayers in the economic community our economy is strong. Correct me if I’m wrong, but I don’t think Bush majored in economics or finance during his stellar college career, as a matter of fact I believe he majored in history so now we are suppose to take his economic predictions seriously? Based on his accomplishments so far in the White House he obviously doesn’t remember many lessons from his history classes. So, it comes down to this. What are you going to believe George Bush or your lying bank account?

President Bush said Thursday that the country is not headed into a recession and, despite expressing concern about slowing economic growth, rejected for now any additional stimulus efforts...Bush's view of the economy was decidely rosier than that of many economists, who say the country is nearing recession territory or may already be there.[1]

In the interest of fairness let’s examine the economic evidence. I mean I could be wrong and maybe President Bush knows better than I what the state of the economy is. Maybe he knows better than the leading economic minds in this country. Let’s take a look at some of the leading economic indicators and see if they tell a different story.

OMAHA, Neb. (AP) -- Billionaire Warren Buffett said Monday that the U.S. economy is essentially in a recession even if it hasn't met the technical definition of one yet. Buffett said in an interview with cable network CNBC the reports he gets from the retail businesses his holding company owns show a significant slowdown in purchases...Gross domestic product measures the value of all goods and services produced in the United States and is the best barometer of the country's economic health. A survey released last week by the National Association for Business Economics showed that 45 percent of economists are predicting a recession in 2008...[2]

The implosion of the subprime mortgage market has been rampantly spreading throughout the economy, slamming consumers, banks, investors, even state and local governments to a degree unforeseen by most pundits and analysts and yes, U.S. Federal Reserve officials...And it ain't over: it could last another 12 months, sucking the life out of lending, driving layoffs, and spurring company bankruptcies and bank failures. Some argue a recession has already begun and it could last for some time.

The depth of the crisis hasn't been hit yet if a new study by several prominent economists is correct concluding that unless financial markets can quickly recapitalize, banks are likely to cut back their lending to consumers and businesses by nearly $1 trillion. That will slash economic growth by more than a percentage point over the next 12 months, said the study by David Greenlaw of Morgan Stanley, Jan Hatzius of Goldman Sachs, Anil Kashyap of the University of Chicago, and Hyun Song Shin of Princeton University, released Friday.[3]

So as usual the rest of the world is wrong and George Bush is right, I guess it all depends on your perspective. How will George Bush be affected by a recession? Will he have to make the tough choices of food or gas or medicine? Maybe he will have to put off those badly needed purchases for the ranch in Crawford? Once again President Bush demonstrates his lack of understanding or empathy for average American people or for their intelligence. He obviously believes that if you say it isn’t so then it isn’t so, wasn’t this the same tactic used during the sectarian violence in Iraq?

The problem is that all of those unregulated ploys to prop up the US economy to make George Bush look good are now beginning to pay dividends. I guess you can’t cut the taxes of the wealthy, fund two wars, and spend money like a drunken sailor indefinitely. The incoming President will have so many problems, I find it hard to believe that anyone would want the job. So let’s just ignore the fact that most economists and that one of our titans of business are predicting a recession. Forget the fact that the American consumer has maxed out their spending limits or that the values of their homes are dropping faster than temperatures in Minnesota in December. We must also ignore the fact that the price of oil is at $100 a barrel and that gas prices are predicted to hit and stay at the $4 a gallon mark for most of the summer.

I am not sure what constitutes a recession in the mind of this President but with each and every passing day he is resembling the infamous Herbert Hoover. Depression? What Depression? Of course with the many safeguards in place today we could never repeat that fiasco, but that doesn’t mean that many people aren’t still hurting. To those who are suffering the numbers mean little and the definitions mean even less. In the Never, Neverland of George Bush things are never what they appear to be. Mission accomplished didn’t mean what it looked like it meant, torture wasn’t what it looked like, and domestic spying and immunity definitely a case of your lying eyes. I know I don’t need a bunch of pinheads to tell me when I am doing bad and it looks like neither do the majority of Americans. A rose is a rose no matter what you call it and bad-times are bad-times no matter what you call them.

[1] http://abcnews.go.com/Politics/wireStory?id=4359200
[2] http://www.nytimes.com/aponline/business/AP-Buffett-Economy.html?scp=3&sq=us+economy&st=nyt
[3] http://www.cnbc.com/id/23448021/site/14081545

Read more!