Job Creation and the Middle Class China Syndrome
I get a lot of amusement from hearing politicians on all sides talk about the importance of focusing on creating more jobs in this brutal economic climate.
Gosh, these guys, (and gals), are so not full of it.
That is any idea of what the hell they are talking about.
Of course you can create jobs by employing any number of strategies - increased government spending, tax cuts for businesses, targeted incentive programs for businesses or consumers, etc, etc.
But none of these are likely to have any meaningful long term impact.
Why? Jobs are directly related to capital, where capital choose to go, how capital is used.
The simple truth that few, few of those who are so vocal about job creation will admit is that the US is not the most attractive environment for job intensive capital.
Oh sure capital will get invested in the US, but outside of government spending, is hardly going to result in any massive reduction in the unemployment rate very soon.
Unless of course we get off this dual crap of its either more tax cuts or more government spending.
None of these strategies make sense in this current global climate.
Over the past 30 or so years "our" jobs have been moving to elsewhere.
Why? Not because workers "elsewhere" are any more productive than the American worker.
No, it is simply a matter of "cheaper" workers being able to do the same thing that the more "expensive" American worker used to do.
It is not the fault of the American worker that he is more expensive.
The American worker has worked his butt off to improve his own living standards, in the process creating a powerful middle class only for this to now come back and bite him in rear.
So there goes our vaunted middle-class.
How the hell did this happen? Maybe a good place to start is our trade policy, exemplified so much by our so-called free trade agreements.
But definitely a great place to start is to look at what has happened since China was granted Most Favored Nation status by the US.
Walk into any Walmart store.
Pick up any ten items.
Look at where each originates.
Most of these will be made in China.
That is why our trade deficit with China has skyrocketed since they have been granted MFN and specifically since one President Clinton removed human rights as a condition to the annual renewal of this designation that China enjoyed up to then, 1994.
That simply meant the selling out of the American worker operating from a different set of values.
What is he to now do, go back to using out houses, live in a rooming house, drive a horse and buggy to work? I thought that is what our economic advance took us away from.
An economic advance driven by a peculiar set of values.
And so damn the American values when it comes to catering to corporate interests.
Well corporate interests mean nothing in an environment in which underlying values are being decimated.
What drove the economic expansion in the US in the 1990's? Oh no, not increased exports as the free trade policy was intended to lead to.
But productivity gains, the creation of new markets driven by technology, specifically information technology.
Once this petered out as it was bound to do when you are quickly losing your manufacturing base, then speculation fill the void, and a huge bubble was created in the real estate market which led to false "riches" for the middle-class.
See why there is a huge fundamental problem here, and it is not real estate speculation as most would have us believe? That is why when I hear the said President Clinton, (who nevertheless achieved a lot over his two terms), talk about leveling the playing field for workers across the globe, quite frankly I just want to say, shut the hell up.
But it is not only in the area of human rights that the American worker is being screwed over.
There is also the issue of the artificial value of the Chinese yuan which results in boosting their exports and having a dampening effect on imports.
This further makes the production of the American worker less competitive as measured against the production of the Chinese worker.
So where the would capital that is job intensive flow to? The US or China? You get the picture.
And it is a freaking distorted one to that.
So where do we go from here with this job creation thing? First, stop the crap talk about tax cuts, more government spending, targeting small businesses, penalizing companies who ship jobs overseas.
Just stop it.
This President should stop his bully talk about taking away tax cuts for companies that ship jobs overseas.
Capital has a right to maximize its return and that is exactly what this is about.
His talk will not make us any more competitive and will not stop the meltdown of the American middle class.
And when we are ready to think this through, here are our first simple questions - what is our middle class worth to us? And what is it worth to our trading partners? Maybe when we begin to answer those our jaws will drop in amazement of just how stupid we have been.
But more about that anon.
Gosh, these guys, (and gals), are so not full of it.
That is any idea of what the hell they are talking about.
Of course you can create jobs by employing any number of strategies - increased government spending, tax cuts for businesses, targeted incentive programs for businesses or consumers, etc, etc.
But none of these are likely to have any meaningful long term impact.
Why? Jobs are directly related to capital, where capital choose to go, how capital is used.
The simple truth that few, few of those who are so vocal about job creation will admit is that the US is not the most attractive environment for job intensive capital.
Oh sure capital will get invested in the US, but outside of government spending, is hardly going to result in any massive reduction in the unemployment rate very soon.
Unless of course we get off this dual crap of its either more tax cuts or more government spending.
None of these strategies make sense in this current global climate.
Over the past 30 or so years "our" jobs have been moving to elsewhere.
Why? Not because workers "elsewhere" are any more productive than the American worker.
No, it is simply a matter of "cheaper" workers being able to do the same thing that the more "expensive" American worker used to do.
It is not the fault of the American worker that he is more expensive.
The American worker has worked his butt off to improve his own living standards, in the process creating a powerful middle class only for this to now come back and bite him in rear.
So there goes our vaunted middle-class.
How the hell did this happen? Maybe a good place to start is our trade policy, exemplified so much by our so-called free trade agreements.
But definitely a great place to start is to look at what has happened since China was granted Most Favored Nation status by the US.
Walk into any Walmart store.
Pick up any ten items.
Look at where each originates.
Most of these will be made in China.
That is why our trade deficit with China has skyrocketed since they have been granted MFN and specifically since one President Clinton removed human rights as a condition to the annual renewal of this designation that China enjoyed up to then, 1994.
That simply meant the selling out of the American worker operating from a different set of values.
What is he to now do, go back to using out houses, live in a rooming house, drive a horse and buggy to work? I thought that is what our economic advance took us away from.
An economic advance driven by a peculiar set of values.
And so damn the American values when it comes to catering to corporate interests.
Well corporate interests mean nothing in an environment in which underlying values are being decimated.
What drove the economic expansion in the US in the 1990's? Oh no, not increased exports as the free trade policy was intended to lead to.
But productivity gains, the creation of new markets driven by technology, specifically information technology.
Once this petered out as it was bound to do when you are quickly losing your manufacturing base, then speculation fill the void, and a huge bubble was created in the real estate market which led to false "riches" for the middle-class.
See why there is a huge fundamental problem here, and it is not real estate speculation as most would have us believe? That is why when I hear the said President Clinton, (who nevertheless achieved a lot over his two terms), talk about leveling the playing field for workers across the globe, quite frankly I just want to say, shut the hell up.
But it is not only in the area of human rights that the American worker is being screwed over.
There is also the issue of the artificial value of the Chinese yuan which results in boosting their exports and having a dampening effect on imports.
This further makes the production of the American worker less competitive as measured against the production of the Chinese worker.
So where the would capital that is job intensive flow to? The US or China? You get the picture.
And it is a freaking distorted one to that.
So where do we go from here with this job creation thing? First, stop the crap talk about tax cuts, more government spending, targeting small businesses, penalizing companies who ship jobs overseas.
Just stop it.
This President should stop his bully talk about taking away tax cuts for companies that ship jobs overseas.
Capital has a right to maximize its return and that is exactly what this is about.
His talk will not make us any more competitive and will not stop the meltdown of the American middle class.
And when we are ready to think this through, here are our first simple questions - what is our middle class worth to us? And what is it worth to our trading partners? Maybe when we begin to answer those our jaws will drop in amazement of just how stupid we have been.
But more about that anon.