Saturday, September 4, 2010

The Economy of Thought: the First Step to our Recovery

   The biggest lie that we as citizens have to endure is politicians in office proclaiming free trade policies or those running for office with a plan to create jobs, but they never reveal it. Everyone talks in vague generalities, trying to hit a catch phrase that makes them stand out, create hope and stay in office. It is all manipulation! The truth reveals itself in facts and history. Let us turn to that page in history. It is the beginning of the demise of the individual, social mobility and the American dream.
   If, as an employed citizen, you cannot provide for yourself enough wages to cover the necessary costs of living which are: shelter, food, energy, transportation and are able to put a little aside for future needs, then you do not have suitable employment. A household with two incomes should have ample monetary needs to live and pursue the American dream. Then, why are 43% of households with two incomes marred in debt? Why are 25% of the new homes built from 2002 lie vacant or in some form of foreclosure?
   Politicians promise that they have the secret for new, high paying, hi-tech jobs with cliches like cut spending, lower taxes, etc. I got your hi-tech job right here,"Would you like fries with that?"
   How did a growing economy with full employment after WW11 begin to falter and shrink by the late 50s? We got a haircut to our economy from government policies that catered to the military and the banking industry.
   After WW11, we initiated  the Marshall Plan for Europe to rebuild those countries economically. It was sold to us as a defense against Communism. I believe it was the humane thing to do. The result was a continent that was able to rebuild quickly on exports. We helped by importing, subsidizing and investing in Europe. The Bretton Woods agreement gave the global community our dollar for central support. They soon wanted our gold after the spectrum of Communism dissipated, but that is another article.
   Our military complex jumped on the "Red" scare to keep the war drums rolling. You cannot go from a one star general to three without a war.
   As a result, the Korean War acted as a stimulus for Japan, Taiwan and South Korea. These nations spurred their economy with exports. Again, we acted as the buyer.
   All this buying by us affected our economy. Not only did we begin the era of deficit spending, but small manufacturing could not compete with low-cost, subsidized foreign products. This was our first haircut. Opponents to deficit spending were shouted down by new screened economist who stated that future growth would cover the costs to these deficits. These people are placed in positions of authority by the banking industry, lobbyists and Wall Street. The military complex became entrenched by President Johnson when he hid military expenses from the budget. President Eisenhower tried to warn us, but the damage to the American psyche had already been done.
   At this point in time, Wall Street, the banking industry and the Federal Reserve began to exert themselves behind closed doors. Through their influence both the media and our educational system blamed unions and their greedy demands for the demise in jobs.
   All you heard about was crime which pitted one-against-another in our society. Think, WEST SIDE STORY. Psychologist and sociologist jumped on the band wagon. Terms were introduced like "white flight." People with secure jobs moved to new affluent areas in the suburbs with new educational facilities as opposed to the old buildings in decaying neighborhoods in the city. It is happening again. Check out a recent article in 24/7 Wall St. entitled, America's 10 Dying Cities: From Detroit to New Orleans. All of the above is true except the most important concept about jobs - the lie of free trade. 
 The public was swayed against unions, while at the same time, the three amigos plotted to move jobs from the Midwest and North to the West and South. They started with the textile industry and once successful, the domino effect soon began.
   Owners of production were refinanced by Wall Street to move factories to defeat union labor. Wall Street and banking found local governments that granted tax relief in exchange for factories. They enacted legislation to help with zoning and infrastructure.
   Time moves along and even Sunbelt communities suffer from inflation. When workers sought higher wages, the three amigos found a new source. Outsource the factory to Taiwan, Mexico, and today, to China.
   Today, the greedy, foolish owners of production face a new dilemma - extinction. This is our opening. This is our opportunity.
   The producers of products in our economy have finally seen the end result of outsourcing of jobs. It wasn't all that hard, but these people are dense. GM went from over 53% of market share in the 60s to hanging on a thin thread today. Why? Stupid concepts like planned obsolescence to spur sales, however market share was lost to brand names like Toyota, Mercedes and Honda. These things take time, but foreign companies understand time and market share. Today, China is developing brand names along with producing outsourced products for American companies. The owners now fear that they could be out of business in the near future unless they receive some kind of domestic protection. This is the opening that American workers need to recapture lost jobs. The following is a list of Chinese companies seeking to establish brand name and thus, kill more American jobs and industries: Lenovo - computers, Haier Group - household appliances, Geely Automobile, Air China, Tsingtao Brewery, Baidu - search engine, Li Ning - shoes, Suning Appliance - Best Buy of China and Huawei Technologies - telecom hardware.
   When you put this little piece of the puzzle into the big picture, almost every facet of American industry is under attack and keep in mind these foreign companies get help from their government to succeed. We need to protect ourselves before it is too late and so we continue our history lesson.
   For example, when the first modern textile plants were established in New England or the factory plant in the Midwest, the workers at these locations helped sponsor the product. The local area knew the importance of their local plant to their local economy. They pushed their brand name product. Once the name became established, the owner of the plant no longer needed the local sponsorship or even the workers. The result was to move the plant. The town received nothing like when Shaq left the Magic for the Lakers. Shaq had the name like the product and the town got nothing like Orlando.
   Of course this is wrong for the NBA and us as citizens. I have the answer for us as citizens. We need to establish an Economy of Thought. What is that? I'll explain.
   The lie of free trade says that open markets will allow the best product based on value and price to succeed. The lie is the free trade part. There is only free trade in the US. All countries help their companies succeed through legislation, protective tariffs and currency manipulation among other techniques. Did any global nations buy our Mustangs or mini-vans? Do you know how much one pink grapefruit costs in Japan? Eight dollars. Yeah, like they are gonna buy a half dozen at those prices. Foreign citizens understand that to buy American is a luxury and by buying American you will hurt jobs within your nation. They understand the economy of thought. We need to instill this concept at home as we add some protective measures.
   We need to balance our economy from one that imports twice as much as it exports to an equal import/export ratio. The only way that we can do this is by tariffs. Tariffs on imports will protect jobs by protecting industries. This means we must exit the WTO who will oppose us. This also reveals the secret of these entanglements. Who is sovereign the WTO or our government? By the way our Founding Fathers opposed any treaties or entanglements like the WTO.
   Let's face the facts. We can't protect everything. What is done is spilled milk. However, we can address certain industries that affect many others.
   The most important aspects of life are not covered by the governments CPI(Consumer Price Index), however we have to have food and energy to live.
   This is where we start. Tariffs on imported food and energy which includes transportation which means the automobile industry. The auto industry affects many other facets of our economy to make it strong.
   Tariffs will shrink the deficit, protect vital industries, create quality jobs and provide a roadmap for the future. The government needs to sponsor alternative energy, especially wind and solar. This sponsorship has to include made in America for any and all government involvement.
   As stated earlier there is no such thing as free trade. Every nation stands behind and is in partnership with their exporting company. We need to aid our nation and it begins with the individual. He is disenfranchized. No one speaks out for him or her and protectionism is the first brick that needs to be placed in the road of freedom to the tree of democracy.