Tuesday, April 28, 2015

Some Recovery= Slow Death of Middle Class

Like any patriot, I do the best that I can in regards to buying American. Since the financial crisis of 2008 the one unexpected bi-product from it has been the awareness by consumers that to find and keep good jobs in America, support our companies. This point has never been lost by the global community as they always buy local over imports. For them to buy American is seen as a luxury.
Further along this train of thought as pertaining to the American economy has been the success of horizontal oil drilling and the concept of fracking in gas wells.
Energy Independence
America is back on the road to providing itself with enough energy, however the same forces that gave us offshoring of jobs is attacking our law that says we need all the oil that we produce and thus, we don't export oil at present. I'm against exporting of oil, however I like the idea to allow the export of natural gas as we have excess and we could develop LNG terminals, shipping and more. This is a source for strong middle class jobs and raise our standard of living which has declined since the 1980s. Dear reader, I just stated that this would help our citizens and economy, but that isn't the truth. The ships that transport the gas aren't made here and no one plans to start making those carriers here. In addition, even the terminals are contracted out to foreign own companies and at best, we only will gain some local construction and employment jobs unless when the law is addressed, someone brings this to light. Next year is an election year, but I predict not one candidate will mention this subject. So much for our democracy. It is run by the wealthy for the wealthy. LNG is a future growth industry that not one leader is trying to make the US the number one country and yet, it is our product that will supply the means to it all. Very sad.
The stock market is already higher today than in 2008. Studies reveal that 97% of the lost jobs in manufacturing have returned. In addition, there is talk about restoring of the offshore jobs due to the cheapness of energy which is a high component in the finished product. Sounds great until you look at the prime example: Automobile production.
Ageing Fleet
Back in 2008 a study revealed that the average age of the cars on the US roads was eleven years. This made car people dizzy with anticipation. The concept: New Cars for Clunkers was an easy stimulus for Congress, especially when everyone was upset that the banks which caused the depression were the only ones to receive aid. When President Obama bailed out GM, it was not that risky because he was aware of the same study. Americans had to upgrade their vehicles. Prime Minister Abe of Japan was quick to act with this info. He devalued the Yen so his countries car manufacturers could capture a strong niche in the overall market. Today, GM sells more cars in China than here. However, the bounty of car sales does not and will not help the US economy and our dying middle class because of one important aspect.
US Percentage
When you build a vehicle, you subcontract many parts like air condition, seats, security systems, computer components, LEDs and chips, more chips and still more chips. No, don't buy Dorito's stock.  This is how car sales help an economy and the working class. In the US there were almost 16 million cars sold in 2014. The figure for 2015 will be similar. However, like I said the middle class is not capturing a stronger future because the percentage of each car built is pitiful when you see how little is made in the US.
Congress passed the American Automobile Labeling Act(AALA)so consumers could see how much and by how many, together helped to build the car. If you want to buy American, this would help.
Buick Encore
is a quality American car, but people, it only contains 3% American made products. This is a mortal sin to economics. For the public school students that is 97% of the car is made elsewhere! Sorry, couldn't resist. This says so much about how our legislatures failed to protect our standard of living and more.
Ford Fusion
It is 25% American with 50% being made in Mexico. NAFTA is a SHAFTA!
Chevrolet Aveo
It is 2% American.
The sad truth is that not even 10 cars have 75% parts made in America. It is a slow countdown that is on nine and the worse part of this story comes next.
Toyota Camry
is made in the US, but the money goes offshore with each sale. Honda Odyssey falls into the same category, but our government classifies these cars as US because the plant is here. Get Real!
The only silver lining is American citizens are getting work, but only because those foreign car companies chose anti-union states which in itself is anti-worker at its core.
So, at a time when cars are selling, middle class jobs are not growing and this is called a recovery. If one needs to be reminded, we invented the TV, PC, cell phone and solar energy. None of those products are produced in the US. Apple sells phones, but does not create job because their product is made elsewhere. We have solar companies, but the big money in turbines is made offshore. Until we protect American companies and workers we will continue this descending spiral to our economy and standard of living. This is the heart of the wealth gap. When people are depressed, it is easy to see all the bad in society which leads to unrest like in Baltimore and Missouri, especially when you have plenty of time since you are unemployed. Tariffs is one solid answer. It is used by every nation. "Free trade" is just two phony words. Fear not retaliation because at best, we only export 14%, so let's protect the other 86% before it becomes its expression and we all end up in the dumps. Globalization is a lie to mask the outsourcing of jobs which was retaliation against unions and workers seeking higher wages at its soulless soul.