Sunday, November 28, 2010
To Harold: Maybe you have not heard out where you live, but capitalism has fallen on hard times. We do not practice it much in this country these days. Well, not in the power centers of America. We have a new thing now. It is “too big to fail.” Some of the more cynical call it crony capitalism. The basic principal is to individualize the profits and socialize the losses. The super wealthy make the money but when things fall apart, you and I pay for their losses. For the huge tax cuts we gave them in 2002 we hoped to get job growth, but instead we got a major recession and the highest unemployment since 1929.
Back in the 1980s when Reagan was president it was decided by our political classes to give finance a leg up on manufacturing and agriculture. Our gross domestic product (GDP which is our country’s yearly production) was only 15 percent finance then and 24 percent manufacturing. We used to make more stuff then. But Reagan put the hammer down on labor. The rest is history. Since then, average working stiffs have gained almost nothing in living wages but the upper two percent of Americans have advanced their incomes by 20 percent or more.
For 30 years both political parties have helped wealthy elites to export jobs to low wage countries and create a very large imbalance in exports versus imports. Remember the one lonely year Walmart touted “buy American.” Forget that. Today, Walmart coowns at least 100 Chinese companies that make products to sell to you and me. All big box stores sell foreign goods. Does this help you or me if we do not have decent jobs to buy these slightly cheaper goods?
Today we have a wealth of labor but fewer jobs. You said those with money would provide jobs, but honestly those elites now invest in BRIC countries (Brazil, Russia, India and China.) They have our jobs. For the first time in my lifetime I see young people I know from Jefferson City with advanced degrees unable to find work here departing for China, Brazil and elsewhere to work. If this is the miracle of capitalism then I must wonder what is wrong. We are allowing money to flow to those countries and take our youth and future with them.
Our local Chamber of Commerce struggles to attract young people to live and work here. But we have been too much a state government town. That trend is down. Unfortunately, America’s crony capitalism is not meeting our challenging needs.