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RACE TO THE BOTTOM, IMPORTED POVERTY AND CONGRESSIONAL GRAVEDIGGING

August 24, 2012

RACE TO THE BOTTOM, IMPORTED POVERTY AND CONGRESSIONAL GRAVEDIGGING.

When “globalization” in all its glory and with all its opportunities dawned on America, Wall Street and its American multinational corporations were quick to make their moves. WTO membership for China?  Check. Cheap labor in China, India and elsewhere? Check. Free money from the Fed’s next to zero interest rates? Check. Big banks’ freedom from the strictures on investment world wide by the repeal of Glass-Steagall? Check. No tariff policy for imports from cheap labor venues? Check. Compliant flunkies in congress to reduce regulatory oversight of trade? Check. Cheap taxes? Check. I could fill out this page, but the reader will get the idea; that the rich and corporate interests in this country have fashioned a PERFECT WORLD for the capitalistic impulse, and even better news during the past few days – Russia has joined the WTO! Can it get any better? Nirvana has arrived!

Nirvana for whom? The 6 million people who are unemployed and 50,000 factories that are shuttered over the past several years due to the exercise of the “capitalistic impulse” by the coddled rich and corporate class, the same people who now have historic trillions in cash in their coffers? How about the people who used to run shops and stores that the 6 million people frequented? China, Inc., aka Wal-Mart and others, have shuttered these former places of business as well.

 Wal-Mart and others import more than Tupperware and toys from overseas; they also import unemployment in America on a massive scale – and they and their bought apologists are core actors in a world-wide race to the bottom. They want less or no taxes, less or no regulation, even cheaper labor. In short, they want to have a fatter and fatter bottom lines and are oblivious to the consequences.

They have gone too far. By depriving people in the marketplace of jobs (wages = demand), they have poisoned the well of aggregate demand and thus headed the world toward recession. Look around. Even China and India are in slowdown modes. Wal-Mart and others sold us on the idea that cheap Chinese labor meant that they could pass the savings on to us consumers in the form of lower prices, but when you have no money, it doesn’t matter how low the price – you don’t buy. Evidence? The New York Times reported just yesterday that inventories in China are sky-high – and with their biggest markets of Europe and America teetering on recession (Britain is already in one, in spite of all the spit and polish of its Olympic glitter). Apparently China is continuing to produce (defying the law of supply and demand) to keep up the pretense of growth in order to satisfy their Beijing overlords who fear everything from loss of face to civil commotion of the masses. (In any event, with such an inventory overload, expect dumping in violation of WTO rules, a common Chinese practice.)

As a matter of policy for the benefit of the people as opposed to policy for the benefit of the few in the rich and corporate class, why are we allowing all of these shenanigans at our collective expense? Why should the rich get richer and the poor get poorer? Answer: Because we allow it. It doesn’t have to be that way. How about a race to the top? Why should the race to the bottom contagion practiced overseas infect America and its people? Aren’t we in charge of our own destiny, or have we abandoned not only our economy but our right to conduct our own affairs to the rich and corporate class?

Corporate propaganda has succeeded in importing poverty as well as Tupperware into this country. They have succeeded in reordering the priorities of a “can-do” America and its potential for a vibrant economy and a prosperous, educated and happy workforce to the bottom of the barrel. We have wilted under such an assault to an America resigned to its fate, one of wage cuts, social security cuts, Medicare cuts, right to work travesties. The talk in the congress is in keeping with the imported poverty routine of cut-cut-cut; they are preparing America’s grave, not its future.

I am in favor of a race to the top. I want a reordering of policy that brings ALL of America back from the dreary and negative future the importers of poverty would have us believe we must endure. (Ryan’s statement that we must cut social security in order to make sure it is around down the road is a good example of the continuing sales job our corporate masters are trying to sell.) I will not join him or his corporate overlords in their further sale of America to the rich and corporate class. I want America to work for ALL Americans.

So what to do? Before the possible nirvana I envision can take effect, there are several policy changes that must be made. Without them, we will continue down the dark economic tunnel to Third World status, or even worse, possible loss of social cohesion. Among many other things, (1) Glass-Steagall (or its facsimile in all important components) must be reinstated – we don’t need another Great Recession caused by Wall Street banks; (2) Protectionist trade policies, including tariffs, should be instituted – let the Chinese sell their Tupperware to Bangladesh; (3) The Fed needs to raise interest rates so that Wall Street can stop getting free money and ordinary people can get that money instead – the current savings system is a mockery, as noted by Reagan’s former budget manager, David Stockman, a republican; (4) Raise the minimum wage so that there is enhanced demand in the marketplace – since an increase in aggregate demand ALWAYS reduces unemployment; (5) Stop the trade giveaways and follow a republican named Abraham Lincoln’s policy of instituting tariffs to protect American industry – when you take away the cheap labor advantage overseas with tariffs, guess what? The factories reopen in America. These so-called “free traders” tell me why corporate propagandists say that is a bad result (other than the fact that they would have to get off of the Oriental Slave Wage Express and pay decent wages to American workers).

I could go on and on, but the foregoing are a few of the changes in policy that would redound to the benefit of America and ALL its people. Many more changes and ancillary rules and regulations would have to be brought to the fore in order to flesh out such new policies, but that’s routine draftsmanship.

Result: The race to the bottom and doom and gloom is over; the race to the top can begin. We can start with single payer healthcare (which every industrialized country has). Inflation is understated since gas and food are not included in its computation. Therefore, we can increase the rate of inflation paid to social security recipients to reflect the real world we live in. We can put an end to corporate healthcare companies and their parasitic skimming of hundreds of billions of dollars from America’s pockets – they will be surplus baggage in a single payer system. Virtually every American pays sales taxes, but not in the stock market. As other countries have done, we can impose a transaction tax on Wall Street deals. We can amend the bankruptcy code to allow individuals to reorganize their mortgages (as corporations do under Chapter 11) to straighten out our continuing crisis in the real estate market. We can break up the big banks so that they are not “too big to fail.” We can require that all political contributions be disclosed (if these people are going to buy our elections, we can at least know their identity pending reversal of Citizens United). We can enact a constitutional amendment that will reverse the Supreme Court’s disastrous ruling in Citizens United. We can cut the military budget significantly (since it is more than the next 22 countries on earth – the Cold War is over, and, as seen above, Russia is even a WTO member). We can restore the marginal rate of income tax on the top 1% to what it was prior to 1981.

There are many other things we can do in addition to the above, like closing such corporate loopholes as the one which permits them to take a deduction for moving their production overseas, total deductions for salaries and other emoluments to CEOs etc.

Net-net result? My version of nirvana, where the playing field is at last leveled, where people have jobs and the economy is humming due to strong aggregate demand, where government is adequately financed and its initiatives adequately funded, where “can’t do” and gloom and doom are in yesterday’s trash bin, where people are hopeful and happy and eager for tomorrow.

Pie in the sky, Gerald E? Unattainable? Unrealistic expectations? Unbelievable? Let me tell you what is unbelievable – that a grouping of business organizations called corporations with their money and propaganda could ever presume to take over a country’s economy, its foreign policy, and even its social mores. That is unbelievable.

We the people live here, too, and it’s our country, not theirs. It wasn’t corporations that fought the wars and built America, it was the people, heroes all, who bled and sweat to make America what it is, and I, for one, will not stand idly by while corporations or anyone else hang “For Sale” signs over the valor and pain of those who built America. It is time for the people to take charge of their own destiny. Corporations and their ilk may participate, but on our terms, not theirs.

The tail has wagged the dog long enough. It is time the dog wagged his own tail. GERALD  E

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