Tuesday, December 04, 2007

America, Inc.

You can't pick up a paper anymore without reading bad news about our economy, but this headline really got my attention.

Weak Dollar: Airbus, VW Plants in U.S.?
A rising euro and high labor costs are leading at least two European manufacturers to consider building new plants in the U.S. [...]

A recent study by the Center for Automotive Research, completed prior to the recent fall of the dollar, found that autoworkers in Western Europe make almost $10 more per hour than their colleagues in the United States make.
Wonderful. Jobs are being created in this country because we have cheap labor and our dollar isn't worth much. Neither are our homes:

Home prices see biggest drop in 25 years.

Add into that mix the financial crisis and the costs associated with the Iraq war and the picture looks pretty gloomy. It doesn't look like conditions will improve anytime soon. So, who's to blame? Danny Schechter @ AlterNet nails it:
Its probably truthful but not helpful to say that the mismanagement of our economy is an outgrowth of the very corporatist policies that will haunt this country for decades to come, including costly wars, and obscenely high levels of corruption and the list goes on.

This crisis, however is a bit different because it has built in intensity for years without much visibility or attention. It speaks to structural problems in an economy built on the quick sand of debt and delusion.

In order for the economy to function, in order for consumption to continue and profits to keep flowing, people have to believe that everything's all right. They want remedies modeled after Alka Seltzer. Put one tablet in water. It fizzes. You drink and feel better in minutes.

The truth is that confidence is eroding not because "the masses" hate capitalism but because our brand of unregulated capitalism is increasingly not working for them. They know that because prices keep rising and good paying jobs are harder to find. They know that because crime is going up in many cities, and it's harder to make ends meet.

And some even know that the very concept of the masses has been replaced by highly stratifies classes built on growing income inequality.
Greed, Republican corporatism, free market ideology...there's plenty of blame to go around. The American consumer shares part of that blame too. We drank the Kool-Aid. We kept spending. We closed our eyes and ears when good paying jobs were sent out of the country. We voted for politicians who tricked us into believing abortion was the most important issue we faced. Then we voted for them again when they told us terrorism was the most important threat. We were enablers and now we're feeling the pain.

So, what's the prognosis? We shouldn't expect a full recovery:
The pessimism, moreover, isn't momentary but reflects voters' worries beyond the current business cycle. Early last month, a sobering consensus emerged from a focus group of a dozen Republican-leaning voters in the Richmond, Va., area, sponsored by the nonpartisan Annenberg Public Policy Center at the University of Pennsylvania. The participants unanimously agreed that they didn't think their children's generation would be better off than their own -- breaking with traditional American optimism -- largely due to the debt future taxpayers will inherit.

"Who's buying our loans?" said former secretary June Beninghove, 67. "Who's going to own us? We are going to give ourselves to another country because of debt."
And we have reason to believe things will get worse before they get better:
There is a conflict coming, as this problem turns into an issue. It could lead to an economic civil war. Its won't be just a working class led class war either. Says credit expert Robert Manning:

"What we've seen with this kind of financialization of the American economy, where the democratic system and so many democratic institutions have been co-opted and literally bought by the financial service industry, is that we're seeing a big backlash from the American people.
This is what happens when politicians run our country like America, Inc. instead of a Republic. I hope our country can survive the mess they've made.


expatbrian said...

Sigh. When I got to Singapore the US dollar was worth 1.76 Sing dollars. Now that is down to 1.40 sing dollars. In two years when I start drawing Social Security (if its still around) that means my check is worth that much less. By then it will no doubt be down further.
Gee. I wonder if exxon-mobile and chevron and halliburton and GE and Boeing and Lockheed will also be suffering....HAHAHAHAHAHAHA

abi said...

Great post, Kathy. And I couldn't agree more that ordinary Americans have to shoulder a large part of the blame. To paraphrase the old saying about the "disappeared," - When I saw my neighbors' jobs disappear, I didn't care enough to say or do anything. And when my own job disappeared, no one else cared enough to say or do anything.

Not quite the same flow as the original, but you get my meaning. ;-)

Kathy said...

ExPat, at least you still live in one of the countries where the dollar still works to your favor. Just imagine how little your SS would be if you lived in England. Ouch! That would really hurt.

Abi, I get your meaning and you're right. We're very selfish and myopic people in some respects (present company excluded!).

Lew Scannon said...

Having come down from a three month television binge, I was struck how much the corpocracy feels our lives could be vastly improved if only we purchased useless crap that only serves to enrich them.
When we relinquished our political system to the corporations, we gave up a lot more than our freedom, we sold out our future so we could purchase this useless crap cheaply. This post speaks to what's been on my mind as of late.