FedUpUSA

Archive for the ‘policy’ Category

“It’s the DEBT, Stupid!”
We’re Doing Something About it! Come Join the Swarm!

Most Americans don’t really care about the economic minutiae that many of us who study the U.S. economy love to pour over.  When it comes to the economy, the typical American citizen just wants to be able to get a good job, make a decent living and put bread on the table for the family.  For generations, this arrangement has worked out quite well.  The U.S. economy has provided large numbers of middle class jobs and the American people have worked hard and have helped this nation prosper like no other.  But now people are starting to notice that something has shifted.  Millions of people are looking around and are realizing that the jobs that are supposed to be there are not there anymore.  The American people are still working hard (and in many cases harder than ever) but all of that hard work is producing fewer and fewer rewards.  Often politicians will placate voters by telling them that they are working harder and harder for less and less.  That tends to ring true with voters because that is a very accurate description of what so many of them are actually experiencing, but what the politicians don’t tell us is that they are the ones to blame for the situation that we are in.  As millions of jobs become obsolete because of technology and millions of other jobs are shipped overseas, our politicians tell us over and over that we can “compete” with anyone and that if we will just go out and get some more education we can make it happen.  But those of us who are extremely over-educated know what a fraud that line is.  The truth is that there are not nearly enough jobs for all of us no matter how ”educated” we are.  This is creating a lot of anger and frustration, and now even the IMF is warning that we could see “an explosion of social unrest” if high unemployment persists.

But what can be done?  You can’t force large corporations to hire people.  The reality is that there are a couple of huge factors that have brought us to this point.  First of all, advanced technology means that big corporations need fewer people to do the same amount of work now.  Secondly, the globalization of our economy means that U.S. workers have now been merged into a global labor pool where they are in direct competition with workers who are more than happy to make less than a dollar an hour on the other side of the world.

This all means that the labor of American workers is less valuable to global corporations than it ever has been before.  Advanced technology and computers have enabled corporations to operate leaner and meaner.  If they do need some old-fashioned muscle for certain tasks they can always run out and set up a facility in some third world nation where they can pay people close to slave labor wages and where they don’t have to worry much about taxes, regulations, unions, health benefits or pension plans.  

What did you think was going to happen when the United States entered into all of these “free trade” agreements with nations around the world that did not have minimum wage laws?

U.S. corporations are not in existence to provide the American people with jobs.  They are in existence to make money.  If they can make more money by shipping jobs overseas, then that is exactly what they are going to do.

According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies skyrocketed 30 percent to 10.1 million. During that same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.

Are you starting to see the picture?

Global corporations based in the U.S. have been creating lots of jobs – just not in the United States.

In fact, things only seem to be accelerating.

In 2008 alone, U.S. employment at American multinational corporations fell by 445,500.

In the old days, you could give tax breaks to U.S. firms and that would spur them to do more business and to hire more workers.  But today, if U.S. multinationals decide they wish to expand they will just go hire more third world workers and pocket the rest of the profits for themselves.

The reality is that we are facing a very disturbing long-term trend in the United States.  Today, over half of all unemployed workers in the United States have been out of work for over six months.  In fact, the duration of unemployment in the United States has spiked up to the highest level it has been at since World War II….

This has created a growing subclass of people in the United States who feel that the system has failed them.  The anger and the frustration in the country is rising every day.  You can almost feel it.

In fact, the IMF is warning that we are at risk of “an explosion of social unrest” due to this unemployment crisis.

The head of the IMF, Dominique Strauss-Kahn, recently made the following statement at an Oslo jobs summit with the International Labour Federation….

“The labour market is in dire straits. The Great Recession has left behind a waste land of unemployment.”

So exactly what is going to turn that around?

Are millions of jobs going to suddenly hop up and return home from overseas?

Is the U.S. government going to suddenly eliminate a whole raft of taxes and regulations and are U.S. workers going to suddenly become much cheaper?

Is the U.S. trade deficit crisis suddenly going to reverse and turn into huge trade surpluses for the United States?

Of course none of those things is going to happen.

America is going to continue to bleed jobs, wages inside the United States are going to continue to be forced down and the standard of living for most Americans is going to continue to deteriorate.

Plus, if the American people don’t have good jobs, they can’t buy homes.  In fact, a growing number of Americans are finding out that they can’t even afford the homes they are in right now.  CNBC is reporting that the nation’s banks repossessed a record number of homes in August.

But for many Americans, a foreclosure is just the beginning of their problems.  People are falling out of the middle class at an alarming rate.  Approximately 45 million Americans were living in poverty during 2009.  That is an absolutely astounding figure.

The American people are getting mad and faith in the economy is plummeting.  According to Gallup, confidence in the economy is way down compared to to the same period last year.

So what is going to happen when (not if) things get even worse?

Well, some investors are already anticipating rough times ahead and are flocking to commodities.  The price of gold soared to a record intra-day high of $1,276.50 an ounce on Tuesday, and the price of gold and other commodities will probably continue to climb as economies around the world continue to destabilize.

These are very, very difficult times that we are moving into.  There are not going to be nearly enough jobs for everyone.  People you know are going to be unemployed.  People you know are going to lose their homes.  People you know might even end up living on the streets.

Just hope that you don’t end up being one of them.

The Economic Collapse

There are very few things that the top politicians in both political parties agree on these days, but one of the things that that they do agree on is that free trade with China is a good thing.  George W. Bush, Dick Cheney, John McCain, Barack Obama, Nancy Pelosi and Harry Reid have all fully supported our trade relationship with China.  In this day and age, virtually anyone who even dares to question how fair our “free trade” is with China is immediately labeled as a “protectionist” and is dismissed as a loon.  But when you sit down and really analyze it, there are a whole lot of very good reasons why both conservatives and liberals should be fundamentally against our unfair trade relationship with China.  But you won’t hear these reasons being talked about on CNN, MSNBC or Fox News.  You won’t hear many members of Congress get up and give speeches about how trade with China is bleeding our economy dry.  Both major political parties have completely and totally bought into “the benefits” of globalism and free trade and there isn’t even much of a national debate about our trade policies anymore.

But there should be a national debate.  Unfortunately, most conservatives are just going to accept whatever their leaders tell them to believe.  Conservatives have been convinced that to be against unfair trade is to be “anti-business” and no conservative ever wants to be anti-business.

Similarly, most liberals blindly follow whatever Obama, Pelosi and Reid tell them to believe.  Millions of hard working Democrat voters have lost their jobs due to our nightmarish trade relationship with China, but they are still convinced that Obama is their savior and that they must not ever say anything that he does is wrong.

Well, I have a message to members of both political parties….

WAKE UP!  YOU HAVE BEEN LIED TO!  

If you are truly a conservative, there is no way that you should ever support our trade relationship with China.

If you are truly a liberal, there is no way that you should ever support our trade relationship with China.  

Globalism has allowed the big global corporations that dominate our economy to make huge amounts of money, but it has also forced American workers into one gigantic global labor pool. 

Are you willing to work 12 hours a day for less than $2.00 an hour in sweatshop conditions?  

Well, that is your new competition.

The top 1 percent of all Americans is using globalism to make huge profits, but the standard of living for the rest of us is slowly but surely being forced down toward the rest of the world.

Is that what you really want?

If after reading the reasons below you can still consider yourself a good “conservative” or a good “liberal” and still support our current trade relationship with China please leave a comment to this article.  I would love to hear your reasoning.  

10 Reasons Why Conservatives Should Be Against Unfair Trade With China

1 – Conservatives are supposed to be all about creating jobs.  But millions upon millions of good paying middle class jobs have been shipped off to China and they are never coming back.

2 – Once upon a time, conservatives were opposed to communism.  But our trade relationship with China has enabled the largest communist economy in the world to go from third world status to superpower status.  China is now the second largest economy in the world, and that would have never happened without our cooperation.

3 - Conservatives are supposed to be concerned about national security.  But thanks to the massive amount of money they have made from us, the Chinese have been able to dramatically upgrade and modernize their military.  At the top levels of the Chinese government, most officials still believe in the ultimate worldwide triumph of communism, and now thanks to us they have a world class military with which to advance that agenda.

4 – China has a very strict one-child policy which should be absolutely abhorrent to any true conservative.  

5 – China uses mobile abortion vans to help enforce the one-child policy.  How any social conservative can justify trade with China after learning this is a total mystery. 

6 – If Republicans actually started fighting to protect American jobs from going overseas they could win the “angry working class vote” and take both houses of Congress and the White House in 2012.

7 – Conservatives don’t like when other countries try to take advantage of the American people.  Yet China is taking advantage of the American people by keeping their currency artificially low and most conservatives are strangely quiet about this.  This currency manipulation has put large numbers of U.S. small businesses at a huge competitive disadvantage and has forced many of them to shut down.  Essentially, this currency manipulation has enabled China to get us down on the mat and continually beat the stuffing out of us.  Meanwhile, our politicians stand by and do nothing.     

8 – Our trade deficit with China has enabled them to accumulate about a trillion dollars of our debt.  This gives them tremendous leverage over us and is a very serious threat to our economy and to our national security.

9 – Conservatives are traditionally very protective of national sovereignty and state sovereignty.  But a global economy governed by the G20, the WTO, the IMF and the World Bank is a giant step toward world government and a giant step away from national sovereignty and state sovereignty.

10 - The giant trade deficit that the United States runs is making us poorer as a nation each and every month.  Each year, somewhere around half a trillion dollars of our national wealth gets transferred out of the United States.  Much of that gets transferred to China.  The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  The transfer of wealth that this represents is absolutely mind blowing.  China is literally bleeding us dry.

10 Reasons Why Liberals Should Be Against Unfair Trade With China

1 - Liberals are supposed to defend unions, yet our trade relationship with China has done more to hurt unions than anything else and most liberal politicians don’t seem to care.  Globalism has put the average American worker in direct competition with the cheapest labor in the world.  Unemployment is going to continue to increase unless something is done to stop the offshoring and outsourcing of our jobs.

2 – Liberals are supposed to care about the environment.  But our trade relationship with China means that thousands of factories and businesses leave our shores and end up in China where the environmental regulations are not nearly as strict.  In fact, China has become a complete and total environmental nightmare at this point.  If liberals truly cared about the environment they would want to keep factories and businesses here.

3 - Our trade relationship with China (and with the rest of the world) has caused the income inequality gap in America to explode.  The top 1% of all Americans have done very well in this environment while the rest of us suffer.  For much more on this phenomenon, please see my recent article entitled “Winners And Losers“.

4 – Dangerous products from China are pouring into the United States. Liberals should be horrified that so many of our products are now made outside the United States far from the watchful eyes of our regulatory agencies.  Over the past couple of years, there has been headline after headline about dangerous products made in China.  The following is just one example of this: 10 Babies Die Mysteriously At Fort Bragg: Toxic Drywall From China Used In Base Homes The Culprit?

5 – In a global economy, every piece of legislation that Democrats intend to help American workers with ends up backfiring.  For example, a rise in the minimum wage or a law increasing worker benefits causes American workers to become even more expensive and gives corporations even more incentive to move jobs overseas.

6 – “Free Trade” has been the most destructive in the inner cities where Democrats have traditionally gotten a tremendous amount of support.  Shiny new factories are going up all over China while at the same time formerly great manufacturing cities such as Detroit have degenerated into rotting war zones.  This is not good for liberals.

7 – Democrats won’t get elected if there are no jobs.  Each month, more jobs leave the United States for China and the growing number of long-term unemployed workers in the U.S. is not going to be inclined to keep the same politicians in office if this continues.  If liberal politicians value their jobs they should start protecting the jobs of average Americans.

8 – Free trade with China threatens to ruin our social safety net.  It is a good thing to help those in need, but there comes a point where too many people jump on to the net and it breaks down.  Already, one out of every six Americans is enrolled in at least one anti-poverty program.  Over 40 million Americans are on food stamps.  These are not good numbers for liberals.

9 – True liberals should be absolutely horrified by the exploitation of labor in China.  In China, millions of people work in horrific conditions for what is essentially slave labor pay.  The fact that big global corporations are getting rich from this should make the stomach of every liberal turn.   

10 - The giant trade deficit that the United States runs is making us poorer as a nation each and every month.  Each year, somewhere around half a trillion dollars of our national wealth gets transferred out of the United States.  Much of that gets transferred to China.  The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  The transfer of wealth that this represents is absolutely mind blowing.  China is literally bleeding us dry.

Liberals and conservatives should both be able to agree that it is not a good thing for millions of American jobs to leave the United States and go to China.

Liberals and conservatives should both be able to agree that it is not a good thing that billions of dollars in wealth gets transferred from the United States to China every single month.

But will our leaders wake up and start pursuing a more logical approach to China?

Don’t count on it.

The Economic Collapse

By Daniel Greenfield, CanadaFreePress

One of the more insidious aspects of the government takeover is how such takeovers are pitched as reforms. Of course reform traditionally applies to institutions reforming themselves or being reformed by their constituents or shareholders. The idea of government reforming the private sector smacks of unlimited authority, which is exactly what it is. And so a government that cannot reform itself, that cannot stop its out of control spending, its constant legislative corruption, its culture of pork and kickbacks, its compulsive need to appropriate power, sets out to instead take over every aspect of life within the country in the name of reform.

But though the government cannot regulate itself, it insists that it can regulate everything outside itself

Can an alcoholic who can’t stop drinking, teach others to be teetotalers? Can a compulsive gambler who drops 10 grand a week in Vegas, regulate the gambling habits of others? Only as an example to others of how bad things can get. But though the government cannot regulate itself, it insists that it can regulate everything outside itself. The blind leading the blind is bad enough, but what are we to make of the blind leading those who can actually see. That’s what government regulation is.

But the reform pitch is part of the whole insidious premise that government is protecting the people from being exploited by acting as a referee on their behalf. It’s so insidious because it’s both deceptive and appealing. Most people have felt taken advantage of by corporations. And indeed we do have a legal system in order to avoid criminal exploitation. But what government refereeing does, is blur the line between the criminal and the unethical, and between the unethical and the profiteering, thereby creating a mandate to not only crackdown on criminal actions, but on acts that are unethical or just greedy.

For example, reformers may begin by exposing an insurance company forging documentation to avoid paying claims, an illegal act, to focusing on misleading claims made by insurance representatives, an unethical act, to campaigning for lower insurance rates, an area that is not illegal or unethical, but a question simply of profit. By exploiting this kind of slippery slope, entire industries have been heavily regulated, even in areas well outside of the government’s purview.

Exposing illegal activity is used by advocates for a government takeover to regulate unethical and profiteering behavior

The scandal generated by exposing illegal activity is used by advocates for a government takeover to regulate unethical and profiteering behavior, which they all class together as proof of malfeasance. By doing so they define both legal and illegal behavior as illegal, because it is rooted in the desire for profit—an essentially socialist position. Going back to the muckrakers, socialists discovered that they could create an impetus for socialism by delegitimizing the profit motive, and the best way to do so was to begin by building their case around blatantly criminal activity and then move down the ladder to attacking the basic idea of capitalism itself.

The overall target was of course the free market, promising the people that government would act as their guardian, protecting them with regulation from the abuses of capitalism. The genuinely deceptive thing however, was that politicians were making the same offer to companies, promising to act as their referee to protect them from their rivals, their workers and their customers. What was actually happening was that government was inserting itself as the “referee”, promising to protect the different segments of the free market from each other.

So politicians “protect” consumers from companies by price controls, while protecting companies from their competitors by creating de-facto monopolies through legislative loopholes, and then protect companies from consumers by tightly regulating what products consumers can buy. ObamaCare, which both imposes price controls and forces consumers to buy health insurance, is a typical example, in which the government as referee screws over both sides, while giving them both some seeming advantage. In reality both sides are worse off than before, and only the politicians and their camp followers gain from the regulation.

And that is how it began. Retailers were promised protection from distributors. Distributors were promised protection from manufacturers. The public was promised protection from all them. Of course this called for reams and reams of legislation. And that legislation called for more legislation. And the politicians and officials in charge of the process naturally welcomed lobbyists from various trade and consumer groups to “explain” their positions them, said explanations usually accompanied by donations and pledges of political support.

By placing itself as the referee, government had a court in which cases went on forever, while collecting “fees” from all the litigants. In Dickens’ Bleak House, there is the case of Jarndyce and Jarndyce, a lawsuit involving an inheritance that has dragged on for generations, and eventually leaves nothing to the descendants who have been fighting for it, but is entirely absorbed by the judges, the lawyers and the assorted camp followers of the legal system. So too the American people are discovering that the “inheritance” of their economy is vanishing into the maw of the government that promised to get justice for them.

The fees are paid out in campaign contributions, in taxes collected to fund the expanding regulatory mechanisms and in the invisible toll added to all economic transactions by the regulations themselves. That is because any regulatory mechanism also becomes part of the system. Each regulation changes the way the free market works and the way that companies and consumers behave, as both continue to strive to gain maximum advantage for themselves. Since each regulation also adds more expenses to both sides and blocks areas of commercial competition, both sides become more creative and thus also more deceptive. But rather than making economic competition better, more regulation actually makes the competition worse. And this provides grist for the reformer’s mill, who pile on more regulations, which only makes the matter worse. The next step leads to the black market, with the most regulated economies, such as the USSR, also featuring a thriving black market. Because regulations don’t change human behavior, they just change the context in which it is expressed, and the strategies it employs.

By position itself as the referee, government has expanded well beyond its constitutional boundaries into socialism

By position itself as the referee, government has expanded well beyond its constitutional boundaries into socialism. And it has done so by playing on the fears of both customers and companies, promising an orderly and tightly controlled market, for the highest bidder of course. The government promises low prices and available products to customers. And then raises their taxes and gives multi-billion dollar grants to corporations, or just bails them out when those regulations help insure their failure. The result is a diminished availability of products, much higher prices when accounting for inflation, and a culture of entitlement among both companies and the public, in which both sides feel entitled to use the government to exploit the other. Which is exactly what the “referee” wants, because then it has them right where it wants them.

Socialism requires simply that the majority believe that they will be better off having government dispense the work of others to them, rather than working for themselves. And the “reformers” have convinced large numbers of Americans of just that. The results can be seen in an endless assortment of consumer groups that promise us the solution to all problems is to have the government regulate every single thing that companies do, and they can be seen in companies with CEO’s whose main strategies are to hire lobbyists, outsource the actual labor to China and then leave with a golden parachute on their least profitable quarter. This is what happens when people cease to believe in working for a living, and come to believe that the government is their best economic solution.

This week in the news, Senator Schumer has announced that he will investigate an airline’s carry on bag fee. While the first reaction of many people may be that such a fee is repugnant, have they considered how much they’ll be paying for the expanded government regulatory mechanisms. Or how much they’ll paying when that airline’s lobbyists agree to get rid of the fee and instead take home a bailout instead? Because there is no such thing as a free lunch. You can buy lunch or you can get it from the government. But government lunches cost about a hundred times as much. And though you may not be paying for it up front, you will pay. And your children. And their children after you.