I'm bumping this article because it's an important read for a time when our trade deficit is hitting record levels. I can understand the mechanics of our marketplace. If our workplaces become so brutal that even those who have jobs are made to feel miserable and are forced out to make room for backstabbers, younger workers and relatives....(don't ask me why I wrote that)....then when those newly unemployed people can't even get a menial white collar job because call centers are outsourced to India....the only alternative is for them to make T-shirts for sale at the local craft fairs. Make soap. Write stories. Work four hours a day at the Dollar Store, or work eight hours between two retail stores because no one is hiring full time so they don't have to pay benefits.
When we get to this point, and when we all know people who are at this point, then we stop spending. I myself am spending sparsely. It's a different ballgame now.
The Democratic party, which once was the party of labor, has long since been taken over by radicals and become focused upon countercultural issues such as homosexuality and abortion. Its economic views are essentially Marxist or paramarxist that would enjoy seeing the free enterprise economy, and workers along with it, fail, in order to validate their philosophy. The Republican party now lives in another galaxy which occasionally sends bland gutless brainless visitors to this world who are aimlessly unaware of anything. None of this relates to the real economic world. The percentage of voter turnout hovers at all time low levels because there is nobody to vote for who relates to reality.—RLK
The era of people working at a "job" is over. The "jobs" can all be done more cheaply overseas, or by robots at home. This goes for everyone's job, not just the millwrights and cobblers — anything useful that can be done by an American making $75K per year can be done just as well by a Sudanese or Sri Lankan for $7.5K per year. And it won's matter that we Amercans are brutal, shrewd innovators; we don't have a corner on brutality or shrewdness, and there are innovators in every country.
As I said, the era of the Job is over. People with nothing to sell but their labor are about to find themselves replaced by outsourced foreign labor (manufacturing, extraction, administrative, and white-collar jobs) or by illegally-imported foreigners (menial, low-skill, and direct-service jobs). In a world where human labor is just another commodity, businesses will inevitably move their jobs to the area where the lowest wages prevail — and in a world of five billion Third-Worlders desparate for work, any work, the lowest wages will be very low indeed.
Yet without wage-earners with incomes sufficient to provide for themselves and to buy the products and services produced by this low-wage labor, businesses will have no markets. No workers = no consumers — Catch-22.
What is to be done? Socialism? Doesn't work. Laissez-fare capitalism? Doesn't work either. Frankly, I'm not smart enough to see a way out of this downward spiral. Only this much is certain: Proletarians (people who live off wages) and capitalists (people who live off investment income) cannot survive on their own; if either side ceases to exist, the other will vanish as well.
Thanks to this economic form of Mutual Assured Destruction, the Cold War between Labor and Capital has ended. If there is any hope for a new economic order outside these two defunct superpowers, it will somehow have to come from people who do not rely on wages or income for their livelihoods: individuals and family-owned businesses that produce real, tangible wealth, wealth that can be directly traded for money or goods or services.
One thing is certain: the current global system of commerce is unsustainable.An economy based upon mutual pocket-picking is certain to fail when the last pocket is empty. Under any system of economics, people have to eat, they have to have clothing, and they require shelter — and any nation (yes, I still believe in nations!) that cannot sustain the sort of economy that allows the average citizen to meet the needs of himself and his family is not going to endure.
In the end, since people have to eat, arable land is the only real property, and human creativity the only source of wealth. Those with the ability to command both through the use of force will always survive. Someday, after the Crash of Capitalism has come and gone, whatever is left of our economy will, perhaps, return to the steady state that Europe knew in medieval times: a civilization chiefly of yeoman farmers, each sworn in fealty to a local warlord, who protects them from brigands, other warlords, and each other in exchange for a share of their collective produce, with a class of independent bourgeois craftsmen, merchants, miners, and small manufacturers (organized into guilds for purposes of price-maintenance and managed competition) producing goods and services on a small scale for local consumption.
In the meantime: is there a case for autarky? Maybe the solution to the problems of Free Trade is to stop trading. If the United States has the resources to provide for its own needs, it might be worhwhile to try doing so. Anything, even austerity, is better than the long, dark spiral into Depression. Opinions?