The average American shopper knows without being told that our economy has been outsourced. A trip to any department store shows nearly every item bears a tag stating country of origin. Few say the United States. Some, in an effort to deflect our immediate reaction of anger say, "Assembled in the USA" or some other terminology. Some few shoppers are deceived by these labels, hopefully most are not. Unfortunately, many do not see the ugly significance of this outsourcing.
Even our grocery stores, although country of origin is not required on all food products, force us to buy imported goods. Most Americans would be thoroughly shocked to know just how much of our produce, meat, over-the-counter drugs and prescription ingredients is imported, without safety controls, from developing nations. Globalization has overtaken America and we never saw it coming.
Obviously, we should have known. Politicians and financiers, CEO's and stockholders all knew-and they told us so in carefully-disguised terms that they fully intended to outsource our jobs and our children's futures to the siren call of short-term profits. Myriad forward-looking statements' cajoled investors with the promise of untold wealth if they would just participate in the hollowing-out of the American economy. Press releases from major corporations touted their expansion' into foreign countries, neglecting to state their intended contraction here at home.
The major cable news networks all have their week-end investor' news reports. These Hot-Airheads apparently believe whatever is good for their personal well-funded portfolio is good for America. They have no concept of the fact that most Americans are already living paycheck to paycheck-if they do, they blame the "lower-classes" lack of initiative, desire for immediate gratification and generally poor sense of responsibility. Some of this is undoubtedly true in some instances; however it neglects to take into account the cold hard facts of opportunity, family prestige and resources and networks of friends.
That the news media should even speak so freely about there being "lower classes" in America gives lie to the widely-held myth of equal opportunity. The truth is, equal opportunity is available only to the few and is thus something other than equal and becoming more so daily. Simply because some few individuals climb beyond their birth "station" in life does not mean there are equal opportunities for all. Rising to the top requires something to rise above-and most of us are the lower rungs that these "risers" will step on to get a leg up. We are vital to their rise. Contrary to some popular beliefs, this has far less to do with race or ethnic origin and far more to do with the individual factors of birth and circumstances listed above.
Those already at the top of the ladder of life are the ones who saw the opportunities available through outsourcing and were in a position to make it happen. Countless popular economists have touted free trade and outsourcing, defending the inequities it created by blaming the "lower classes" and bought political favor to assure they would be the ones gaining the advantage. Indeed, politicians became increasingly a part of the groups benefitting from outsourcing and thus became corrupted away from their elected task to legislate for ALL the people, not just the monied few.
In watching the fiasco that has occurred through outsourcing the entire American ability to grow wealth, not every economist agreed with the popular economic models that forecast prosperity for all. Dr Ravi Batra, Professor of Economics at Southern Methodist University, Dallas Texas is one such economist. Dr Batra has predicted with great accuracy the economic cycles of the past 40 years. Although some events have had their dates delayed due to financial and political manipulation, all have so far come to pass. Two of his better-known books which are readily available and apply to the current situation are, "The Myth of Free Trade" and "Greenspan's Fraud". Dr Batra writes with a simple and straightforward manner which makes his economic commentary easy reading and easily-understood for the average non-scholar.
Some of the truths being ignored in the headlong rush to maximize short-term profits at the expense of the many include the inescapable fact that you can't sell anything to people who have no money. The obvious plan of many outsourcing manufacturers is to transport those goods back into the United States to sell to the relatively wealthy American and Canadian middle-class. As wealth has been depleted due to lowered wages and lost jobs, easy credit was promoted to keep the fires stoked by financial institutions whose fingers are in the outsourcing/profits pie. This includes not only the interest-bearing loans in the form of home equity loans, credit cards and personal and "payday" loans, but the investment they have made in the corporations doing the outsourcing, of whom they are major stockholders. As municipal funds such as pension funds and profit-generating off-budget accounts also see their return enhanced via these methods, government at all levels becomes an accessory to the hollowing out of the economy.
The increased collusion between finance, corporations and politicians has engendered an economic atmosphere where legislation is often enacted to directly benefit specific corporations, often by penalizing their competition. This can no way be called either Free Trade or Laize Faire economics: it is manipulation, pure and simple and highly destructive to the down-home economic reality facing the middle classes.
"Free Trade", the basis for all this outsourcing, is a myth. What we are experiencing is not free trade, as the American middle-class, along with the lower classes of several exporting countries is doing all the giving and everyone else is doing all the taking. There is little of the touted equal exchange implicit in the term free trade. In fact, the losers have had no say in the matter at all. Free trade theory is based on the concept that countries will trade FREELY-nothing could be farther from the truth. Trade treaties and agreements such as NAFTA, GATT. World Trade agreements and the like haven't been negotiated with actual free trade in mind. Other countries, chief among them China, have been allowed to maintain their own barriers to imported goods. They have also engaged in the hoarding of the US dollars they have gained through utilization of their cheaper labor force, creating serious imbalances in the flow of dollars and goods. These flawed trade agreements have been enacted based on the profits the elite few would be able to make and have ignored the costs to the average citizen.
Goods flow primarily outward from many of our most prolific trading partners, and dollars flow inward. This creates a situation where the Federal Reserve simply creates more money out of thin air to stuff in the gap and causing inflation. The highly-touted emerging markets' heavily expounded upon as the reason we need these trade agreements do not exist and there is no chance they will develop with protectionism in full force in these countries.
Pie-In-The-Sky projections of increased sales to these other countries have not materialized and will not materialize as these are the very countries that have proved most adept at counterfeiting our patented products for sale in their native markets with the tacit approval of their governments. These countries see the inherent advantage of producing their own goods for sale domestically and avoiding trade imbalances as detrimental to their financial future. Any Board of Directors who did not foresee this would happen is obviously guilty of fiscal neglect. In fact, the emerging market' theory is based primarily on loosening trade and political considerations to the extent they will be able to build factories in the trading country, using native labor and selling on the local economy, gaining corporate profits but doing absolutely nothing for the US economy. The fact that they are more than willing to drain the US economy to position themselves to take advantage of these possible opportunities speaks volumes for the ethics and patriotism of these corporations and their banker/partners.
Any movement of goods has costs in terms of transportation costs. As outsourcing has increased distances needed to transport both raw materials and finished goods, attendant costs have risen, as has the demand for fuel. We now face a critical situation in the cost of fuel for both home heating and power generation and the movement of both goods and people. Widely-touted reasons for the escalating costs of fuel is increased demand-usually blamed on increasing manufacturing in such places as India, China and Indonesia. We are supposed to forget the reason these countries' manufacturing development has exploded so rapidly that world oil supplies cannot keep up, that being US corporations moved the factories there with the active encouragement of government and financial institutions.
US automakers' solution' to non-competitive pricing for their products, due in large part to trade tariff inequities engendered in trade agreements, was to outsource parts and assembly to first Mexico and then Asia. Some auto components cross the ocean four times before being assembled into the final product. We never hear about the transportation and handling costs involved. If the true transportation costs were accurately reported, it might well prove more cost-effective to assemble the entire product here, thus putting many out-sourced workers back on the job earning a living.
Unionized workforces have become a popular target as a method to blame the workers themselves for the loss of their jobs. In truth, capitalism's most vocal proponents have always demonized the ability of workers to exercise any control over working conditions. Outrageous claims that UAW workers are making upwards of $60 hr are designed to promote popular sympathy for companies outsourcing to cheaper labor. True wages in the auto industry are far below that level: such estimates are based on overtime rates, benefits, plant overhead and the shop manager's attendance with his family at the annual conventions in Cancun. These are not reflective of the true wages a Detroit auto worker gets and, most automotive supplier secondary jobs pay as little as minimum wage without benefits. Therefore, we see corporations once again support their lack of good management policies, desire to jump on the outsourcing bandwagon and still keep consumer goodwill in terms of future sales.
Because transportation costs are studiously ignored as a factor of cost, we never see the entire picture. Instead, behind the scenes these same auto makers collude to promote an aggressive pricing war among transportation carriers, to the detriment of smaller companies and the wages and working conditions of drivers. That transport costs are a serious concern is evidenced by the mostly unknown efforts of government to subsidize with taxpayer dollars improvements in rail, ports and intermodal systems. Once again, the American middle class pays a hidden cost for outsourcing. The widely-reported truckers' demonstrations' both here and abroad are not simply about the enormous cost of fuel but about the forces large corporations are bringing to bear on all aspects of their operations and the attendant loss of wages and working conditions forcing them out of their means of livelihood due to imbalances caused by outsourcing.
Additionally, poor government policy in regulating futures speculation has allowed speculators to drive the price of oil far above the actual cost. Once again, the lower and middle classes bear the heaviest weight of these decisions as they struggle to pay rising energy costs with a job that, if even still existing, pays lower wages to the point it is hardly cost-effective to drive to work. Poorly-thought-out bio-fuel incentives have created a situation where now food costs have risen astronomically in a short time, adding even more pressure to not only the United States' lower and middle classes but the entire worlds' poor.
Once again, the Talking-Airheads, having never left the city limits of New York or Atlanta except by air, naively assume those who live in the middle of the country as simply wasteful and poor managers, particularly in transportation choices. That mass transit is far more cost-prohibitive than individual autos is a fact beyond their limited experience. Since their paychecks are little impacted by market factors that impact the majority of the people, money struggles are once again blamed on the suffering public. Since the mega-corporations and multi-national financial institutions that benefit from outsourcing control advertising dollars and in many cases, ownership of the networks, truth from the middle-class perspective will never be part of the equation they report.
Throughout history, countries' financial fortunes have risen and fallen with investment patterns and enthusiasm for the possibilities of growth by investors. It is well-known that the most money is made by harnessing the labor of poorly paid workers, or by exploiting the resources of poorer countries. The United States was the darling of investors for two hundred years and developed the worlds' highest standard of living based on this growth and the ingenuity and hard work of its people.
One can equate the ability to generate financial fortunes to the growth of bonds: one buys bonds at a lower rate and, over time, that bond matures to a higher rate of return. In the eyes of the financial powers of this world, the United States is a bond which has matured. Therefore, investment in the United States is far less profitable than investment in countries with lower wages and standards of living-these countries with their lax employment regulation and far less concern for the environment and human rights provide opportunities for higher profit percentages. The saddest part of the exodus of investment dollars from the US is not just that the train has left the station, but that they have blown up the tracks behind it. It is not in their interests to have American workers compete with their new-found wealth-generating populations.
Obviously, then, citizens and small business must think about the future in a different way than in the recent past. The only way to survive and prosper in some small measure is to do it without the major financial powers and corporations. This takes the active participation of government in the form of government regulation and policies to support local small business and local labor, selling to a local market. This system would take several years to bear fruit but must be done to ensure continued high standard of living in the United States and Canada. It is a foreign concept to many of today's youth, but there is nothing inherently shameful in physical labor or working hard. Not everyone is going to be able to generate an income in front of a computer screen: someone must man those punch presses and welders and assembly lines making regional goods for regional sale.
As we can no longer support the luxury of moving products and food long distances, local farming and industry needs to be developed to employ local labor who can then purchase those products and keep dollars at home. Money needs to circulate in the local community and this means people must actively patronize local banks and credit unions to keep it there. Small local investment could get these processes off the ground and retired skilled labor can provide guidance and training as this is the working world they grew up in. One idea which has proven to bear fruit is the local investment groups promoted as Solari Circles. These groups monitor revenue-sharing funds coming into their communities to assure honest and appropriate use, provide funds for business incubators and generally re-direct the economy away from corporate global interests and inward toward local financial interdependence.
Inherent in taking responsibility for the local economy is involvement in the political process to ensure representation actually benefits the citizens not individual corporations.
Such a system requires the public to become aware of the origin of all goods they purchase, from big box items to the lowly toilet paper on their shelves. We must refuse to support corporations that have outsourced our jobs and wealth, even if the brand name is familiar and promotes itself through feel-good commercials and full-page ads in the local paper. It is our support, and using our purchasing power, that has allowed them to off-shore most production and hollow out our economy. If we must purchase the goods, purchase as little as possible at the lowest possible price and be willing to forego some of what we consider necessities. The few pennies they lose on our sole sale can become an enormous loss if people do this enmass. Conspicuous consumption must become socially unacceptable as we work to wrest our economy back from the greed of the multi-national corporations and bankers.
These are neither pleasant nor popular concepts to consider, but these are the ways in which we can rebuild a reasonable economy based on local labor and wages. This will take a concerted effort on the part of the majority of the people. It will need to start small and become the original grassroots movement that transforms a neighborhood or a city or a county. We will not be able to count on government money or politicians bearing favors or pork barrel projects. Car-pools, community gardens, local produce markets, free-cycling and re-use all keep dollars in our pockets and out of the hands of the multi-nationals who have put us in this situation. The only way to win is to not give them dollars to take away from our shores and our local businesses. If we don't begin to do this now, we will be forced into it of necessity when we have fewer resources with which to do it. And we'd better hurry-the hour is late.
http://www.solari.com