“This globalized financial system exists for one purpose only: to maximize return on investment. “
Devastated by a Civil War, from 1865 to 1900 the United States became the largest industrial power on the planet by 1900 and emerged as a major military power by 1920 having been critical to allied victory in WWI. The US industrial infrastructure allowed the nation to supply, fight and win a global World War from 1941-1945. After that war the US industrial infrastructure helped the global economy get on its feet and domestically brought prosperity to the middle class and unprecedented product innovation inventing entire new technologies and industries.
By the 1980’s American manufacturing was still supreme but the factories were showing their age and needing to be modernized. Japan and Europe had reindustrialized during the post war period and their more modern factories were more efficient and lower cost than many of th aging US factories. For American labor to compete globally, an major capital investment was needed in modern equipment and new factories.
The capital spending required to modernize of US manufacturing in the 1990’s would have created an economic boom in the United States and dramatically lower US manufacturing costs once complete. US capital and labor would have been the most efficient on the planet by 2000, there would have been no industrial boom in China because the investment would have been made at home, the US would have remained the greatest industrial power on the planet, and from a national security perspective would have been self sufficient domestically in almost every industry.
Instead of the hundreds of billions of dollars being spent to modernize US capital, American politicians, academics, multinational corporations and Wall Street redesigned the global economic system and diverted the capital investment to the industrialization of China and outsourcing of US manufacturing. Wall Street investment firms, multinational corporation executives, and the American media told the story that US labor was uncompetitive to justify the investment overseas. It was a false but ultimately self fulfilling claim. American workers were more efficient than Asian workers but once they were put in competition with slave labor in China, they lost. It wasn’t a fair competition. The Asian workers had new modern technologically enabled equipment, government export subsidies and low cost capital. American workers were trying to compete with 1940’s-1960’s era equipment, made before the computerized technology boom of the 1970’s and 1980’s.
Today, American manufacturing is a shadow of its former self with what manufacturing remains in the US dependent on foreign raw materials and components. We see that in the automobile shortage today. The remaining US auto factories are not receiving the foreign parts (computer chips) needed to make the products they sell domestically. Parts and components are not available in many industries. This is what happens when integrated domestic supply chains, which took 100 years to build, are dismantled and outsourced overseas.
The truth is the US does not have the supply chains and manufacturing capacity in place to fight World War II again. Had we been in this condition in 1941, Germany would have defeated Russia and Great Britain because we would not have been able to supply the armaments supplied via lend-lease in the early years of the war. We also would not have been able to recover quickly from Pearl Harbor by replacing the ships sunk and building the landing craft used by the military to island hop and defeat Japan.
Does anyone really believe today’s US military could win a 2 continent war against Russia, China, and Iran allied against us? Without the use of nuclear weapons which would result in destruction of the US homeland? Six months into a non-nuclear war with Chinese manufacturing embargoed our economy would be crippled and unable to supply troops abroad, much less the essential needs of 330 million US consumers.
Do we have president today, or military leadership today, capable of responding to this type of external threat?
Sadly, we are where we are today thanks to the policies of Republican and Democrat administrations after Ronald Reagan’s two terms as president. George H.W. Bush initiated the “free trade” architecture eliminating trade barriers to the US market while allowing other nations to industrialize while subsidizing their exports to the US and protecting their own emerging industries. US financial institutions, allied with multinational corporations, used the savings of US citizens to fund the industrial expansion overseas and declined to modernize domestic factories. Ross Perot and a few others who warned of the long term consequences were shouted down and dismissed as “nuts”.
Today government statistics show 100 million people of working age not in the work force. Of those 7 million are considered “unemployed” and looking for work. Another 93 million are classified as not currently wanting to work. Yet our government, and propaganda media, tells us there is a labor shortage. So we borrow trillions of dollars to support people who prefer not to work.
Policies have consequences.
And there is the hard truth of it.