Economy


Cameron Salisbury

It’s happened again.  Another well meaning soul insisting that EveryOne is to blame for the mess that engulfs the U.S. politically, militarily and economically because in our political system, the country gets what it votes for.  Therefore, ‘we are all responsible.’

Some may get their kicks from an existential guilt trip, but please count me out.

First, we almost never get what we think we voted for.  Just a few examples: Remember George W. saying he’d be a ‘uniter, not a divider’?  Before the vote he also said yes to more social programs, lower taxes and a balanced budget.  Franklin Roosevelt said he’d keep the U.S. out of foreign wars and Richard Nixon said he’d end the war in Viet Nam.

Before election day, voters are bombarded with ads, negative and positive, and promises, some vague, some not.  Complicating the process is the media which prefers sound bites to substance.  Voters negotiate the mine field and cast their ballots for the person who does the best job of convincing them that he or she will fulfill their fantasy.

Every few years we go to the polls and pin our hopes on a Rorschach ink blot shaped like a person.

Don’t blame me for this.

Tens of millions of us had a lot to say, and we said it over and over, both in print and in phone calls to Congress, before our representatives opted to ignore our furious dissension and approved the Wall Street bailout. That act alone has been regarded by some as prima fascia evidence that American citizens are voiceless shadows in a mythical democracy.

Personally, I don’t think I contributed to the problem.

We the people voted in record numbers for someone different, a self-proclaimed agent of change, and Barack Obama became president.  Who is responsible for the disappointment that he has been to many?  We elected him to change the way Washington behaves and he showed every indication that he believed he could.  I’m not sure that he is responsible, either.

And I’m certainly not.

In the name of the U.S., atrocities have been and are being committed in Iraq and Afghanistan by the military and by an increasing number of heavily armed delinquents known as contractors who are accountable to no one. Congress has attempted to reign in the cowboys with what appears to be only marginal success.

The atrocities are both passive, as when sanctions result in the deaths of hundreds of thousands of children, and active, as when Iraqi wedding parties are incinerated by drones.  Obama is unable – though, I’m convinced, not unwilling – to reduce the out-of-control military and its over-the-top budget.  The armed forces are a nation unto themselves and they usurp nearly 50 cents of every one of our tax dollars.

Should you and I shoulder the blame?  If you believe that you are morally responsible,   aren’t you are morally obligated to stop paying taxes?  Let’s see a show of hands for everyone willing to do this.

We have a Supreme Court that says it’s just fine for corporations anywhere in the world to buy a U.S. election.  We have lobbying groups that keep us embroiled in Middle East politics, that fight health care reform tooth and nail, that keep the financial sector fat and happy while tens of thousands lose their jobs and line up at food banks.  We have a cadre of powerful, unelected advisors built into the system, people like Karl Rove, Rahm Emanuel and all of K Street.

I didn’t cause any of this.  Did you?

Many people have responded to the dysfunction in Washington by joining groups like the Tea Party and openly oppose the influential, often appointed, government personnel that citizens have been stuck with. Since most such groups are ignored by the thumb-sucking media, their influence spreads wirelessly. At least for now. Corporations are doing their level best to wrangle control of communication space, too.

OK.  ‘Fess up, you who are accountable.  Is this your fault?  If yes, then fix it.

The ‘We’re all responsible’ group never fails to bring up Nazi Germany.

To which I reply:  What is your point?

Stories still surface, over 60 years later, of German civilians with the power to assist the persecuted who did just that.  There is no way of knowing how many sympathizers had no power to intervene.  But we do know that Germany in the latter 1930s and 1940s was run by thugs who had a heavily armed state at their disposal.  Dissent became a capital offense. During the war, the allies bombed much of Germany into rubble, killing hundreds of thousands of civilians. The German population paid dearly for the actions of their leaders.

Were they all responsible?

Although most United States citizens were far distant from the corporate-lobbyist coup, we are held accountable for Washington’s actions.  To the 9/11 terrorists, the fact that an overwhelming majority of Americans were in no way responsible for U.S. policy in the Middle East was strictly a footnote.  They seemed to have entirely missed the fine print that explained the distinction between wealthy lobbying groups that promote war in the Middle East and the majority who don’t want it.  Or maybe the murderously alienated just don’t care.

Similarly, Amanda Knox is in jail in Italy, one of the most unlikely convicts in history, most probably in retaliation for homicidal actions committed in Italy by an unrepentant American military.

The fact that we will be held to account for actions committed by others is incentive enough to take action.  But we can’t do it by letting the perps off the hook and claiming responsibility ourselves.

What should we do?  Here are some ideas.

–Washington, D.C., should be closed down and its functions decentralized.  All legislators should be required to stay in the districts that elected them and use modern communications to interface with others.  This would remind the elected on a daily basis that their neighbors hired them.  It would have the added benefit of making the lives of lobbyists significantly more difficult.  Tell Michael Moore to investigate the possibility.

— Blame the right people.  Call a war criminal a war criminal and insist on prosecution or extradition for one and all.  Pretend like the Nuremburg trials really mattered.   Support Cindy Sheehan.

— Recognize the class warfare happening in America right now and insist that the casualties be treated like those in any other war, with limitless subsidies for those in the trenches: the unemployed, the undereducated, the uninsured, the debt vassals, the single parents.

–Support open media.  Contribute to the Real News Network and PBS as well as to web sites like this one.

–Join protests against the military and the excesses of the police state, like brutality and tasers, while we still can.

And most of all:  Stop claiming responsibility for criminal acts over which we had no control and put the blame where it belongs.  Stop giving the perps a free ride on our conscience.  They should be driven out of town and into jail by our outrage, not coddled by our narcissism.

We should not be willing to shoulder blame for criminal activity committed, domestically and abroad, without our consent. The fact that we live in the U.S. is not evidence of guilt.

If everyone is responsible, no one is responsible.

Cameron Salisbury

With the government-mandated bankruptcy of one of the largest, longest-lived, and, until recently, most profitable manufacturers in the world, the takeover of the U.S. economy by the same East Coast forces that destroyed it is now complete.

The speed with which GM spiraled into insolvency was breath taking. Less than 18 months ago, just as the horrifying effects of Wall Street’s malfeasance were becoming clear, GM was profitably selling SUVs, making money for its shareholders and paying big ticket CEOs far more than they were worth, just like Wall Street.

Suddenly the rules changed.  In a spectacular reversal, GM was deceptively accused of failing to sell what consumers wanted to buy, of being out of touch and out of date, of having too many built in personnel costs which made them unable to compete with foreign auto makers whose short history in the U.S. left them free of pension liabilities.

The piling on was not done by vaudeville comedians as we might have expected.  No, in a priceless ironic twist, the proximate cause of their downward spiral was the economic wreckage brought about by their accusers: Wall Street and Congress.

Bankruptcy was immediately proposed as an option because, Wall Street-Washington decided, it was the only way to scrap the gains unions had made for pensioners, employees and their families and millions of others around the world.

No one said the words ‘unions busting’ right out loud.  They tidied up their intent by calling it a problem of ‘legacy costs’, giving an antiseptic feel to creating poverty by fiat.

The most viscerally determined for a GM bankruptcy were senators from the anti-union south who had been instrumental in subsidizing the establishment of foreign auto manufacturing in their own states.

When the Wall Street cabal was put in charge of dismantling the giant, pensioners and health care benefits were automatically toast, as were suppliers, many dealerships, all factory workers, and hundreds of thousands of families.  The successful, final sell out of middle class laborers was heralded by the new, rock bottom wage agreement struck with the crushed UAW which brought American auto workers in line with the low pay of foreign competitors.

Thanks to Wall Street and their elected enablers, the American manufacturing sector and its middle class wages have evaporated, almost as though they never existed.

No one has to be a fan of GM to understand that it was part of the last of the once-dominant American industrial sphere; to understand the importance of manufacturing to a healthy economy; or to understand that the real loser is the middle class which now has millions fewer jobs and livable incomes which are not coming back any time soon.

The American middle class was essentially created by automotive unions and the reluctant Big Three beginning in the late 1930s and continuing into the 1950s.  Everyone, on all continents, wanted the hard won wages and benefits the unions had wrested from the mighty industrialists and, to a large extent, they got it.

The middle class, which took root in all the western industrialized nations, was one of America’s most successful exports.  People all over the world had the money to buy American clothing, German cars or French champagne.

Every country used trade barriers in the form of import taxes to maintain a level playing field for its middle class and to protect national prosperity.

The formula worked well for 50 years until the marauders in charge of the free for all known as American capitalism found a way to take it all.  Not satisfied with great wealth, they wanted humongous wealth, sort of a corner on the wealth market.

At the top of their hate list, always and forever, were unions.

The campaign to destroy unions and usurp middle class prosperity started in earnest in the 1990s when Clinton’s White House pushed successfully for the passage of NAFTA, which was quickly followed by other free trade agreements.

Free trade meant that factory jobs could be outsourced around the globe to places with negligible labor costs and unprotected workers.  And then, voila! those cheap foreign made goods could be re-imported to the U.S. duty free.

The uneven playing field became the law of the land.

CEOs pocketed the profits cheap foreign labor provided and CEO pay went through the roof.  The penalty for dismantling a once vibrant industrial base was gone, replaced by unimaginable riches for those at the tippy top of the income pyramid.

American workers didn’t fare as well.  No longer in a position to bargain with management for the cost of their labor, they accepted whatever they were given and were happy just to have a job.  Earnings stagnated, inflation climbed, purchasing power eroded.

Cheap imported goods, an economy awash in credit, and declining real wages paved the way to disaster for millions of Americans struggling to cope with economic factors beyond their control.

Both unions and the middle class were headed for the trash bin of history with the full knowledge and consent of the governing class.

Workers in other parts of the world were equally vulnerable. Beginning in the late 1990s, factories and employees were discarded with reckless abandon in country after country, as capital moved to the next hot spot of miniscule wages and nonexistent worker protections, first Mexico, then Thailand or Vietnam or China.

In the U.S., each announcement of a factory closing, jettisoned employees, or increased outsourcing was met with a rise in the Dow Jones, accurately reflecting the hostility of capitalists for the worker.

As Wall Street revels in its taxpayer financed wealth bubble, foreclosures on Main Street escalate; reports of stress-induced suicides, homicides, child abuse and domestic violence increase; families move in together and try to make cramped living conditions work; tent cities sprout everywhere.

Millions have made their first ever trek to the unemployment office; seen their possibility of retirement vanish with their 401Ks; taken a pay and benefit cut; or were jolted with the realization that they and their families no longer had health insurance.

But a worse catastrophe may be in hiding in the shadows.

On Wednesday, June 4, in front of a congressional committee, Federal Reserve Chairman Ben Bernanke went public with the plan he had held close to the vest since his endorsement of the trillion dollar taxpayer giveaway to his Wall Street friends.  He says the U.S. must “maintain the confidence of the fiscal markets”, i.e., protect the interests of the Wall Street thugs and the banks-too-big-to-fail by imposing austerity measures on the U.S. population.  He wants major cuts in all public spending, including Medicare, Social Security, unemployment benefits, education and health care.

With the big manufacturers facing bankruptcy and the Bernanke, Geithner and Obama triumvirate feeling the need to shred the safety net, it’s conceivable that the middle class slide will not end simply in a lower standard of living, but in poverty and civil unrest.

by Cameron Salisbury

Someone finally said the obvious right out loud. A talking head on the PBS News Hour told Jim Lehrer that Americans must get used to a lower standard of living. In the years since globalization made corporate competition synonymous with exporting American jobs, closing factories, removing tariffs, and importing low paid H1-B workers to replace U.S. citizens and reduce wages, the downward spiral has picked up steam.

The approaching abyss had been held at bay by the now defunct mortgage-securitization bubble. Homeowners were encouraged to treat their houses like a piggy bank, refinancing at ever higher valuations and lower interest rates to maintain life styles that they could no longer afford on their receding incomes. Much of that liquid equity was transferred to China and other third world countries to buy the goods that free trade produced at bargain prices and that a hollowed out U.S. manufacturing sector could no longer produce. More than one economist declared the U.S. bankrupt in all but name.

As households and the nation slid ever deeper into debt the pundits blamed the free-spending U.S. consumer for problems that government policies had caused.

Armageddon, no longer invisible in the distant fog, was held back, at least temporarily, by sheer terror in the rest of the world at the dimensions of the U.S. fiscal mess.

The regulatory safety net, created during FDR’s New Deal, for decades provided the underpinning for sane capitalism and general prosperity. The dismantling of financial sector regulation was bought and paid for by the same rootless, multinational corporations that lusted after cheap foreign labor and the elimination of import penalties.

The stock market briefly climbed to over 14,000 before the house of cards crumbled, right on schedule, as the irresponsibility of Wall Street and Congress settled in. All those no-documentation, no down payment, adjustable rate home mortgages imploded in slow motion, one foreclosed home, one “high grade” investment, at a time.

As foreclosures annihilated neighborhoods and cities, Bear Stearns went on life support; hedge funds and airlines struggled, with mixed results, to avert collapse; 232,000 U.S. workers lost their jobs in the first 3 months of 2008, and CEOs, true to form, walked away with millions.

And then, playing their accustomed role in the repeating drama of corporate financial malfeasance, the U.S. government stepped in to bail out – ok. You know who, and it wasn’t the taxpayer. Corporations that had spent millions in tax sheltered lobbying expenses to effectively destroy the regulatory safety net couldn’t make their way to the taxpayer trough fast enough. For the good of the country, of course.

While corporate titans saw the American worker as their opponent in a zero sum game, our government acted as their enablers. The collusion of our elected representatives with their corporate financiers in the hollowing out, selling off and mismanagement of a once vibrant economy has been a sad, and possibly final, chapter in the American success story.

As Jim Lehrer’s guest implied, what comes next may be a standard of living that none of us could have imagined – except those who have spent time in a third world country.

Take Ecuador, for example.

I visited Ecuador not long ago when my daughter was in the Peace Corps. I knew before I went that it was a poor country and that the water was undrinkable. But nothing, not the guide books, not the internet, not descriptions from previous visitors, prepared me for the shock of living, even temporarily, in a culture where government services are virtually nonexistent, and where 80% of the population is officially classified as poor (WHO/UNICEF.)

In real terms, here’s what that means:

–Even in urban areas, where the majority of homes have water connections, it is available only 50% of the time and the quality is always iffy. Ditto for electricity. In many areas, the day ends when the sun goes down.

–The lack of water treatment facilities means, among other things, that toilet paper cannot be flushed away. It is kept in the home for later disposal.

–Women in much of the country wash clothes by hand in a concrete tub. I actually saw a woman using a rock to clean clothes.

–Trash is everywhere. One of the first things visitors notice is the ubiquitous filth.

–Streets are filled with whisper-thin stray dogs and cats.

–In very poor barrios there are no trees or grass or flowers to be found. Just dirt or mud, depending on the weather.

–Car and bus drivers are supposed to be licensed, but with few police and effectively no traffic control, no one knows how many actually are. Obeying traffic signals is a matter of personal preference. Car insurance is a luxury and “not required” as one official told me. Remember this the next time you read about yet another bus accident in Central or South America, where a bus tumbles off a highway and down a mountain, killing everyone on board. Traffic accidents are a leading cause of death in much of the third world.

–Unfinished buildings are everywhere, frozen in time, awaiting further funds from adult children working in the U.S. or Spain. An estimated one in ten young Ecuadorians has emigrated for work reasons, often, tragically, leaving their own lost children to the uncertain mercies of friends or family.

— The relative opulence of a home is often a testament to the number of children a family has working abroad. The poorest of the poor live in shacks made of cane sugar stalks.

— It’s not unusual to see visitors walking along looking at their feet. That’s because the sidewalk is uneven and holes, including sewer holes, as well as sudden mountains of pavement, can appear unexpectedly. Roads can be so rutted that taxis refuse to navigate them.

–People get around by bus. Driving a bus is an entrepreneurial activity for upwardly mobile families in Ecuador. A family saves up enough to buy a second hand bus and they’re in business: the dad drives and the kids go along for the ride and collect the fares. Mom is probably at home managing the small store that is the front room of their three room house. The store sells to their neighbors whatever vegetables the family has raised and other small items, like cigarettes at three for a dime or bottled water for 25 cents.

–I saw police (or were they soldiers? Hard to tell when the military and law enforcement are interchangeable) only twice during the time I spent in Ecuador. They were standing guard outside banks, state of the art weaponry at the ready. What little law enforcement exists seems there to protect the property of the rich.

–Criminal activity is a constant concern. Barred windows appear in all areas of the country and among all types of homes. In my daughter’s travels, she found that armed robberies on busses were rather routine, which accounts for the fact that many busses have a barrier behind the driver separating new and possibly dangerous arrivals from seated customers.

–Typical for third world countries, public education is limited. It is usually only the families who can pay whose children attend school. Huge numbers of families can’t afford tuition or uniforms or books, children may go to work before their teens, and the country remains impoverished.

–A few thousand of Ecuador’s estimated 13 million citizens are tall and white and Spanish, unlike the majority who are Indian or mestizo (mixed race). They are the upper class, and for many decades, they were the ruling class. Today they live behind tall barriers in exclusive enclaves, and they trust no one from outside with so much as their phone numbers. They hire body guards, send their children to be educated in the U.S., and remain active in politics in this politically unstable region.

–Since precise statistics are unavailable and most estimates in the third world are essentially guesses, no one knows the true extent of unemployment in Ecuador. Nevertheless, we observed massive numbers of people, with neither education nor skills nor available jobs, who simply stayed at home every day. We were awed by the lack of productivity in much of the country.

My daughter made good friends in Ecuador with people who were, in many ways, very much like us. Their ability to stay in touch after her tour ended was nearly impossible, however, since the mail system in Ecuador is close to nonexistent and because the overwhelming majority are too poor to have good access to telephones or computers. Even if they did, those living in or near poverty spend most of their time on tasks necessary to their survival.

Concerns with public health and safety are ample reasons to hope the U.S. doesn’t descend too far into the approaching abyss. But there is also much to recommend this other world. Families are strong, neighborhoods are stable. Life is simple, ads for the latest trinkets are nonexistent, and no one worries about keeping-up consumerism.

As U.S. citizens travel the economic path laid out by our multinational corporate government, we may all have reason to look for the bright side.