The Pilfering of America By Plutocracy

On 11/09/08, In Economics, by W.M. Godfrey

The United States doesn’t really build things anymore. One of the last things it still builds, but which no one will buy, is automobiles. And for this reason the heads of America’s automakers are lining up for their share of the welfare for billionaires promised by “bailout” peddlers. Consider, less than 10% of all jobs in the US are in manufacturing, and we are importing at a record rate, with a record imbalance of trade. When the manufacturing base of the US was collapsing, as trade, tax, and import policies enshrined in NAFTA/GATT made it more feasible to dismantle US production, move it to the 3rd world and export to consumers in the US, free traders told us “No problem, we’ll make software.” And then off-shoring took huge swaths of software engineering services to the 3rd World. “No problem,” the free traders again exhorted us. “We’re the banking center of the world. We’ll finance the world.”

But as foreign governments buy larger and larger shares of US debt, and our Wild West banking system bets the house (and your 401K) on mortgage debt that massively defaulted due to risky loans to “lower income” (meaning minority) home buyers, US banks and investment houses were left in shambles. Now Uncle Shlomo owns large amounts of the eight largest US Banks, in the form of securities, in order to prop them up. We used to call that socialism, but now we call it “laissez faire,” which means “broke and on the government dole” in French, being the language of those who invented that condition in the 1700’s.

On goes the mantra. Whenever a section of the US economy is shifted overseas to the benefit of plutocrats, the free traders convince us that “emergent industries” will provide Americans with something other than dwindling pocketbooks that the buyers of the world want. But the industries either don’t emerge, or they offshore at an ever-increasing pace, leaving US employees riding atop an ever rising Jenga tower, wondering when the fatal block will be removed and off-shored, and the Tower of Babel comes crashing down. With either McCain or Obama, the procession toward North American Union would have proceeded, as extra-political forces are involved, and set the tone for lawmakers.

Moving the US manufacturing base overseas makes sense for everyone except Americans. The free traders presume that economic warfare will not, and cannot result because everyone will play by the rules. Everyone will always sell to the highest bidder. Well, as we’ve seen in the case of that valuable commodity oil, that’s not always the case, as more and more of the supply is earmarked for oil hungry “emerging markets,” who pay less than Americans due to the engineered weakness of the dollar.

To enforce the rules, they build ever more unaccountable international trade regulation bodies, empowered, they chide, to levy fines for evil (that is, “inefficient”) things like tariffs, or below-cost product “dumping.” The problem is, sometimes it’s more lucrative to flout the rules, which have only the power of words and nominal “fines” behind them. The result is that in order for free trade to work, domestic (and so called nativist) interests must be increasingly sacrificed to international interests and international bureaucracies. Free trade is thus seen to be the enemy of nationalism.

The US economy cannot survive by its employees “taking in each others’ washing.” And even if it could, the corresponding general impoverishment would have been the largest illicit transfer of wealth in history -theft, that is. Moreover, not everyone can be equipped to be a “micro-entrepreneur,” which is the latest free trade fairy tale to bedazzle the morons who swallow their pabulum, while it makes them compete with cell phone-toting pimps (er, “entrepreneurs”) in Bangladesh. When the well-paying jobs are gone, so will be the U.S.‘s economic prestige and security. Not a problem if you’ve shifted your interests to Mumbai, but a big problem if your highly specialized career of 30 years vanishes to a slum of Shanghai overnight.

Comments:

A thoughtful and eloquent essay. Thank you. I add a further thought that may be of some use in helping to unravel the whole mess. We currently are culturally sensitized to receive the phrase “the economy” as full of meaningful content. However, one would be hard-pressed to explain just what it is supposed to mean. The one defect of the above essay is that it seems to accept “the economy” as a meaningful phrase. In its essential origin, “economy” referred to the organization of a household: Greek oikos (house) nomos (law). In the 18th century scholars began to speak of “political economy,” which had reference to national-level policy in regulating industrial and financial transactions; industry vis-a-vis household and nation vis-a-vis nation. Only in this milieu could the phrase “the economy” emerge as having reference to something global. Only on the pretext that there is some legitimacy to the whole idea that a cadre of really smart men need to control what constitutes money and to orchestrate the flow of goods and services - only on this pretext is it meaningful to look at the whole of a nation and culture and speak of some abstraction called “the economy.” But this is the very pretext that a kinist and an agrarian would work to deny. So long as the issue is: Are the current demigods right about “the economy?” then they win no matter what the answer, because all voices in the debate have accepted the terms of the debate. Let us be among those who rise up and declare that the debate is invalid because it is construed upon a meaningless abstraction.

Posted by Scott C. Mooney  on 11/16  at  11:59 PM

I agree that the term “the economy” implies within itself the notion of centralization and planning, such that to speak of it as a unity, without comment, is to tacitly adhere to this understanding of the term. It is difficult, in a short space, to disentangle terms from their modern, bowdlerized counterfeits. It is true that we must dissent from the very terms of the argument. But we have to substitute terms to refer to the tax and industrial policy of governments that work in tandem with fiat-money creation through fractional reserves, which is a form of systemic inflation that is intended to perpetually monetize the debt incurred by printing presses through the confiscation of real wealth through inflation of that portion on which the public will not accept further taxation).

This “financial system” is what should not be referred to as “the economy” but must, rather, be referred to by some specific term, so as to draw a meaningful comparison. I simply know of no term by which to refer to it other than the financial system, tax, trade, and and industrial policy of the US government. We could call it political economy, but very few readers would, perhaps, understand the use of the term. 

I also believe that genuine economy springs from the productive, wealth-building activities of the household, and that there the real wealth of the nation once lay, and to the extent that such an entity still exists (the genuine household economy), it still lies there. As we have seen, there is no wealth in the financial system of the US, as the promissory note that is used as currency is really simply a consensus fiction by the parties in the swindle, and the tacit approval of the hoodwinked public, who perhaps have an instinctive feeling that “Wall Street” is now really some sort of elaborate Ponzi scheme.

The abstraction we call “money” today is nothing of the sort, but is really just a scrip, infinitely elastic. But not so absent consequence, as confidence in the debt as wealth illusion fades. It is comic that the “money economy” lies in shambles while productive activity, the building of wealth through production rather than usury continues unabated. This is why folks still have jobs, I think, even though “shareholder value” (which is artificial to begin with -in the era of 300:1 price to earnings ratios) is collapsing. The aforementioned means of “raising capital” is really a hoax, and could be seen as such, if folks could frame and articulate their suspicions. But on some level, they themselves are complicit in the hoax, as they have wracked up debt they lie to themselves they ever intend to pay.

The free traders’ pretended love for hard money is just that. There is a necessary connection between free trade, an infinitely elastic currency, and a government policy of active credit expansion to coincide with dollar inflation. This is the essence of the free trade system, but a logical connection must be evinced from the details of market activity, which is a fine research project for some enterprising youngster with more knowledge and patience than myself.

Posted by W.M. Godfrey  on 11/19  at  03:53 AM

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