August/Sept 2016 Newsletter
The word “global” has become a part of everyday language, yet few truly understand it. Does this have anything to do with Labor Day? Yes it does.
The Digital Revolution that enabled globalization has changed the way we live and work, thanks to multinational corporations, banks, solar energy, and lots of cheap stuff from China.
Some say what global gives us more than anything else, is unemployment.
In the beginning America boasted a high work ethic. Corruption was contained by the Constitution with its balance of power. It is when power is unrestrained that we have corruption.
By the year 1900 American steel production had outstripped that of other nations. The USA had over 200,000 miles of railroads by 1914; more than all the rest of the world put together. American farm products and manufactured goods were being shipped abroad in American ships.
Sadly, towards the latter part of the 19th century a new, corrupt aristocracy had formed, wielding a new unrestrained power. This was the “great captains of industry” bankers, traders and manufacturers, sometimes called “the Robber Barons”.
Power corrupts and absolute power corrupts absolutely.
Big government grew as an antidote to the robber barons; for big government was being called on to protect the little people. And for awhile, with unions and such, it was a workable arrangement.
Sadly, however, big government itself went bad, for power corrupts and absolute power corrupts absolutely. In bed with the unions, government enacted laws to protect the workers but what happened was that the cost of labor grew exponentially.
Along came the digital revolution. Not many know that the biggest event from the dot.com explosion was the laying down of electronic cables under the sea. This connected the nations of the world. Now it is possible in the banking, communications and tech industries to hire workers in India, China, Brazil and Mexico to produce on their home turf but to deliver their products to the sophisticated American market.
No labor laws in India, China and few in Mexico. The International Companies still have to sell in America for they do not pay their foreign workers enough to buy their products.
In America workers were protected by regulations and contracts that did not exist overseas. This upped the price of the goods produced to where they were no longer competitive.
Around about this time investment banking took off digitally, and more students were/are becoming investment bankers and international brokers than lawyers and doctors, or those who build things. A powerful financial industry evolved with unsubstantial products. Again power corrupts and absolute power corrupts absolutely. Those in the financial sector have abused their power; no political effort to get the sector corrected.
Investors got put in place a very cozy rule to protect their interests: the CEO of a corporation would henceforth be appointed by, and be answerable to, its board of investors.
This is very important for you to understand: the top dog in international companies does not answer to labor and only indirectly to consumers; he answers FULLY to investors. This creates weighted dice in all matters of work and trade. Once upon a time the producer was king, and then the consumer became the king but now it is all about the shareholders. This alters the whole economic equation. Labor no longer has clout and in the big companies our jobs ARE GOING to cheap labor overseas or to machines and our culture is rife with a dangerous income inequality.
Income inequality is a GLOBAL problem.
Now work all over the world is being done only for corporate profit. So a CEO has little choice when choosing American or Foreign workers. to make the biggest profit for his investors; in order to survive himself he has to choose the lowest cost. A CEO feels he also has to choose consumption over production.
But here there is a problem: The corporate money is not going to American workers anymore, its not going either to the foreign workers who get paid dime on the dollar, so who is going to buy the products the CEO’s company makes?
The answer is simple, there is still one big market returning a big, big profit and that is the Federal and State Governments. This is where the dollars printed by the Federal Reserve are going. I am talking about government workers or those on welfare. An international company producing high tech products or armaments or airplanes deals with the American government directly. Then there are those cheap products for those on Food Stamps; make the product cheap enough and it will be bought (and all indirectly paid for by the American government). It can even be manipulated via currency devaluation. A plum market is the public sector; those administering government programs; with the Fed able to print it, lots of money flowing there.
So there you have globalization in a nutshell; the CEOs of the large international companies are hiring overseas, but selling in America.
The secondary industry, the childcare, the dry cleaners, the movie theaters, the pharmacies, the liquor stores, the hardware stores are chasing the new foreign corporate workers to foreign lands. The private sector labor pool has dried up in America; small business, previously the largest employer in America, can no longer afford to hire. Sadly, with fewer people paying taxes it also impacts adversely on the public sector.
So there: That is where all the jobs have all gone.
My father used to say, “Lynn, in the good times work for yourself, in hard times work for the government.”
Out of this equation we get some crazy but true facts like this:
China is building bigger and bigger ships to transport cheap product to America. The ships are now so big they have had to almost double the size (at enormous cost) of the Panama Canal.
I came out of the delightful Dollar Tree store in Castaic and saw an office building boarded up now three years, new, never been used and I thought, "Why can’t we build a factory just over the hill and wouldn’t it be cheaper, no need to schlep stuff from all over the world?"
Now do you have a better understanding of the flow of labor and goods in the world?
Just one more thing to say:
Something strange happening at the tip of Africa. In Cape Town irate students are pulling down a statue of Cecil Rhodes which used to occupy a prominent position on the sports fields of South Africa’s University. Why? Students feel his influence was imperialistic and offensive to black students. And why am I bringing this up?
Well it so happens that Cecil Rhodes used his millions to further his vision of a united world. Would a New World Order be good or bad? Being connected is good, right? We are told this with NAFTA, TAFTA, TPP and TPA. There is just one problem and that is that NWO implies that all nations surrender their sovereignty to a world-ruling government with no constitutional restraints. We have been following the thread of power corrupts and absolute power corrupts absolutely. What would be the corruption in such a body? Would a N.W.O. bring America prosperity and freedom? Would a N.W.O. make a better world?
Politicians for the N.W.O. have been the 2 Bush presidents and Bill Clinton is a Rhodes scholar.
For nearly a century, the world has depended on the protection and leadership provided by a strong, independent United States of America. Considering the corruption that absolute power always seems to bring, a powerful world government could be a catastrophe for the United States and for the entire world.
My father was not an American but he would have loved America. He had a warm heart, a nimble mind and a free spirit. I could always rely on his wisdom during troubled times.
This was his advice: “Lynn, when you hit the skids do two things; mend all broken relationships and go back to the basics, reinforce your roots.”
America is entering troubled times.
With this in mind I signed up for this free online course on the American Constitution (one hour a week for ten weeks). I found it a-political, but essentially patriotic and very liberating.
Would that all immigrants were given this amazing opportunity.
And if you are American-born celebrate this Labor Day by getting a greater understanding of what it means to be American.
Quote for the Month
“Nearly all men can control adversity; but if you want to test a man’s character, give him Power.” ~ Abe Lincoln
Until next month!
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