Remember May Day

This link takes you to an article on the history of May Day which, despite what I consider its unfortunate association with communism, is rooted in our history instead. This would be cautionary history for us on any other date also, given the fact that this country is on a course to return to the conditions referred to in this article, sad to say.

In a similar vein, Paul Krugman wrote this Times Select column yesterday about what our esteemed captains of industry in this country are doing with their wealth generated at our expense and aided by our horrific tax policy under the current administration. You would hope that they would reinvest it into their businesses for expansion and greater employment opportunities (of course, you would hope that, but you would be wrong).

Jane M. Von Bergen wrote this column on Saturday in the Inquirer about workers who have died on the job, remembered in a ceremony at the Sheet Metal Workers Hall in Philadelphia (registration required). And the Daily Kos blogger Devilstower has a great post here about the truth behind the alleged shortage of tech workers in this country.

Finally, here is a Guest Opinion that appeared in Saturday’s Bucks County Courier Times from Bruce Paone who, according to his bio, is a lifelong resident of Bucks County and a married father of two adult children. After pursuing undergraduate studies in the 1970s, he has acted in various capacities within the corporate setting, including owning and operating his own business (I'm troubled by his characterization of manufacturing as "a lost economic sector," but I think he makes good points otherwise).

Because so many notable business pundits appear bemused by America’s most recent economic vexation, specifically the collapse of the mortgage markets, I thought I’d take a crack at edifying readers, to the extent that I’m capable, as to its true nature and causes.

What’s actually occurring in this economy is the globalization of assets and wealth. That is to say, because the value of American labor is falling so precipitously (due to the use of cheap foreign labor around the world), the value of the assets held by workers is falling in direct correlation with their declining wages. It must, and here’s why:

A worker formerly employed in a lost economic sector (manufacturing, for example) earned between $50,000 and $60,000 annually. That job gets outsourced. Now that worker takes a job paying $20,000 to $25,000 annually. All the tax cuts, cheap foreign goods, and low-paying jobs created by President Bush and globalization aren’t going to restore that worker’s former standard of living.

Presently, someone trying to pay off a debt service based on his former “un-globalized” salary and prior level of affluence just can’t do it. Now that America has been globalized, that worker – along with all others of the same economic rank – can’t afford the assets he has purchased and is trying to hold on to.

Just as wages within workers’ economic sector are being deflated, so must the value of their assets deflate. This has to occur so that new members of their socioeconomic group, those just entering America’s global work force, can afford to participate, including those living and working here illegally.

What we’re seeing now is just the beginning of a global revaluation, a downward harmonization of American workers’ livelihoods with the livelihoods of the world’s other working people. Furthermore, this state of affairs isn’t going to end any time soon, not until the descending worth (wages and assets) of America’s working classes meets the ascending worth (wages and assets) of the labor they compete with globally.

Therein lies the rub. Most of the rest of the world’s labor works for nothing, or almost nothing, and holds no assets. Truth be told, the only country whose entire economy has prospered due to globalization is communist China, where free-market capitalism doesn’t exist and where every societal need is provided by the government.

As Ross Perot so aptly phrased it during his debate with Vice President Gore in 1993, we’re in “a race to the bottom.”

Exacerbating this crisis is the fact that, while the wages and assets of those forced to compete globally are deflating, the costs of goods and services they must provide to subsist are inflating. The primary sources of this inflation, it seems evident to me based on my own reading, are deregulation and President Bush’s lust for printing money, principally to pay for the globalization of Iraq.

As for the true health of America’s overall economy, international spending is out of control; Iraq alone is costing American taxpayers more than $412 billion! Yet the Washington oligarchs have no compunction.

Across the board, Americans have experienced the steepest decline in their standard of living since The Great Depression as the United States has become a debtor nation. Bankruptcies, home foreclosures and personal debt are at an all-time high, as is our trade deficit, while concurrently real wages and property values plummet.

Still, globalist fanatics boldly proclaim their manifesto: “Free trade will promote a global ecumenism and provide us economic prosperity.” All the while America’s two greatest exports remain her jobs and wealth.

With the mendacious predictions that brought about globalism in the first place (being implemented without the true consent of the governed), and with America’s economic power declining, here’s the real question: What type of country is America destined to become in the 21st century?

Perhaps the answer can be found only in the past. Perhaps in Charles Dickens’ novel, “A Tale Of Two Cities.”

Sorry, I know this isn’t very cheery stuff, but this is the reality (click here for more information).