Those who do not know History…
by Blake on May 13, 2009 at 09:10 Political
I get frustrated sometimes, having to tell someone that this time isn’t unique, and if you take away the election of an African- American, and just substitute the election of a man, (which is how it should be viewed), all of this economic cycle, complete with both the recession and the attempted government interference in the free market has all happened before in history. Study the terms of Franklin Roosevelt and you have almost the same things attempted, and the same things failing.
Roosevelt tried “stimulus”, in the form of temporary jobs, and they did have the effect of slowing the fall, but they had no real, long- term effect on the economy, because in order to affect the economy in a positive, long- term way, you actually have to make “new” money, not recirculate money around. If you have several people in a circle, and you pass a ten dollar bill from one to the other, everybody gets ten dollars, for a minute, but it is the same ten dollars, versus someone from outside the circle putting money into the circulation, which is new money, and it accumulates- more and more money finds its way into the circulation.
All these “green” jobs, and road jobs are fine and dandy for the moment, but they truly are not adding much to the economy, because to do this, we need to actually create something, and it must be private industry that does this. And when private industry does this, government must stand out of the way.
Government has always been a handicap to free markets, first, because government wants its cut of any profits, and second, because government has this irrational compulsion to “make things fair” in the markets. That concept is hilarious- that’s like trying to make a snake and a rat good friends- that’s not going to happen. The business world is in a constant state of flux, with companies rising and falling according to the markets.
Our problem has come about because of a lack of blue- collar infrastructure, and no- I am nor talking about the unions, they have been part of the problem here.
It all began with the experiment of “Globalization”, and the global economy, as if we would ever do well having our economy tied in any way to that of Sri Lanka, or Thailand, or Venezuela, for that matter. People in governments around the world have been pushing to “Globalize” the economy, much as the Europeans did with their common currency, and relaxed borders.
This won’t work with us, or I should say, it shouldn’t work with us, but Barama is part of the group that thinks that having one happy world will be a good thing. The problem is, in order to do this, our economy will have to go down to third- world levels, and we all become poorer because of it.
A good example might be a container with several compartments- you can fill these several compartments with different levels of water, but if there is no separation between the compartments, the water seeks its own level, and everybody has the same amount. This is contrary to free and open markets, where a person can make as much as the market can bear. A country that is productive doesn’t have to prop up a country that does no work- the last thing we need is a country on welfare.
Then you mix in the unions, which began as a good thing, but became useless, because they believed they were bulletproof- not so, and their thinking was so calcified, that they didn’t see it coming. Globalization, NAFTA, CAFTA, all the various openings that appeared in the world trade situation did the unions no favors- their status and membership shrank like a cheap chinese cotton shirt.
Unions, with the exception of those with captive corporations, lost their influence, because the manufacturing corporations found that they could move to a more favorable climate with regards to wages and taxes, and so they moved from our shores. No unions, lower wages, less taxes- what was not to like? Who cares if the quality is shoddy- if everybody wears shoddy clothes, who knows the difference?
There is no way to get them back. Absent lowering our wages to third- world amounts, those companies are gone forever. Neither can we completely close our borders to trade, for we no longer make what the world wants- they are beating a path to someone else’s door.
The best we can hope for is that we learn our lesson, re- institute a free market, and do what Americans have done through the ages- re- invent, retool, and rebuild our economy, but we will not be able to do this successfully if the unions cannot bring some innovative ideas and flexible thinking to the table. Neither can we do this if the government insists on impeding these ideas with government regulations. The government needs to step out of the way, and try to sweeten the deal with tax breaks for companies that locate here.
Manufacturing must return to the United States. Blue collar jobs must be held by Americans first, because blue collar jobs are the backbone of this country, and lets face facts- not everybody is cut out to be a software designer or a lawyer. The Nation needs carpenters and bricklayers also, and these people deserve a living wage in order to be a productive member of society.
Only by being able to get ahead can they begin to start their own small businesses.
And that is how we begin to get out of this mess.
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Tags: globalization, living wage, nafta, small business, unions
Compare the Harding response to the 1920 recession versus the Hoover/FDR response. You will come to conclusion that the Obama response will have the sames results as Hoover/FDR. Twelve years of crap versus roaring 20’s which was the result of the Harding response.
“Fair” is where grown men go to play games. The universe is not fair and there is nothing government can do to change that. Manufacturing in the USA surpasses the output of any other country in the world, but we do it with minimal labor. Communism is about full employment Capitalism is about creating more for less. Eliminate the capital gains tax, the corporate income tax, and the useless regulations and companies will flock to the USA.
I certainly agree with your assessment of “fair”- where I would part company with your statement is the fact that much of our manufacturing has gone with the companies, but to get the companies back I would agree with the elimination of those onerous taxes.
From the Fed Reserve manufacturing output in constant year 2000 dollars has almost tripled from Jan-72 through Mar-09. Manufacturing employment during the same time has fallen 35%. Huge improvements in productivity has made this possible.
The U.S. by far remains the world’s leading manufacturer by value of goods produced. It hit a record $1.6 trillion in 2007 — nearly double the $811 billion in 1987. For every $1 of value produced in China’s factories, America generates $2.50.
The U.S. sold more than $200 billion worth of aircraft, missiles and space-related equipment in 2007. And $80 billion worth of autos and auto parts. Deere & Co. sold $16.5 billion worth of farming equipment last year, much of it to the rest of the world. Then there’s energy products like gas turbines for power plants made by General Electric, computer chips from Intel and fighter jets from Lockheed Martin. Household names like GE, General Motors, IBM, Boeing, Hewlett-Packard are among the largest manufacturers by revenue.
True, but the steel used in much of our autos , planes and farm equipment came from China.
In addition, have you tried to find a good cotton or linen shirt made in the USA? Hard to do.
Remember the “Union Label”? Not so much anymore, and that’s a pity. When we put our energies to it, we make the best- period.
Also, you have to take into account the inflationary index vis- a -vis ’87- 2009, That’s 22 years, at an average of 3.3% yearly inflation. That would make the ’87 numbers about 1.4 trillion in adjusted costs- not that big an improvement.
The US manufactures stuff nobody else can make. That’s called an absolute advantage. Anybody with a blast furnace (19th century tech) can produce steel. A t-shirt is another commodity (17th century tech). If you want a carrer in the manufacture of such things I suggest you move to a third world country.
Stats are in constant year 2000 dollars as stated in my first sentence. Inflation matters not.
It is not necessarily the level of the technology that should be at issue here- we are cutting edge- it is the fact that we, as a country should be self sufficient, not top- heavy.
A good example is that almost all of our frozen veggies come from somewhere else, because we have turned to corn for ethanol. Consequently,our food is coming from Canada, Mexico, China, and Chile. This shouldn’t happen- we are, or used to be, the “breadbasket of the world”, and the point I mean to make,and perhaps not doing a good job of, is that we need to be a well- rounded country, with no chinks in our armor.
The mainstream media wouldn’t do it. So we are trying to get your important messages to the American people. 23 This post is a suggested read at, http://aresay.blogspot.com/