It’s A Funnel, Not A Gate

It’s A Funnel, Not A Gate
By David Glenn Cox



Since the beginning of the current economic crisis, call it whatever you will, recession, depression or even just Bush Bust '08, it would appear that the Bush team has at every turn of a bad card just pushed denial as their primary weapon against this growing monster.

When it began way back in the good old days of a year ago last summer, with the subprime crisis, the administration began with a campaign of blaming the consumer and the degenerate people who were gaming the innocent banking system. As the crisis deepened the Republicans resisted any move to help struggling consumers. The numbers, however, quickly escalated as Republicans and pundits spoke about decoupling. Would the subprime crisis spill over into the market as a whole? The expert consensus was no, that won't happen. The question was then asked, can we avoid a recession? The experts answer was a resounding, oh yes!

The Dow Jones average began to melt like butter in the hot summer sun as those same pundits began to try and call the bottom, 1200, 1100, 9000 and finally 8700. Still those same pundits were declaring what a great time it was to buy stocks, but by now it’s only the suckers who still believe. So much money is parked in treasuries that the interest rate has fallen to 0.01%. The pundits are still trying to call the bottom but the big money says that gaining nothing beats losing everything, or you first, loudmouth!

Still the administration prattles on with their talk of letting the markets work as their multi-winged flying machine crashes without ever really getting off the ground. With the confidence of a Cubs fan in April, they insist that if we are in a recession it will be short-lived and the economy will recover in the first or second quarter of '09. Watch! We’re so certain that we’ve got this under control that when Lehman Brothers comes asking for help we’ll say, hell no! Boy oh boy, I bet they wish that they had that one back; ever since Lehman Brothers it’s been nothing but Addison & Clark Street.

The incrementalism has been a total failure, denial and avoidance have only made the situation worse. The captain struts on the burning deck and barks orders to his subordinates, but it has become clear to one and all that they are clueless as to what to do. John McCain lost the election not because of Sarah Palin or because he was the worst candidate since Alf Landon but because, like Bush, he was clueless as to what to do about this tsunami. Rather than promote a plan he instead grabbed his surfboard and wanted us to follow him to the beach.

The President-elect has begun announcing his cabinet positions earlier than anyone in memory and they are already formulating plans to attack this economic pestilence on day one. Obama is picking the best and the brightest and has received high praise from both ends of the political spectrum. But he has repeatedly used the words "two and a half million new jobs" and that disturbs me. Do they get it? Is it more incrementalism? This economy has lost 1,741,914 jobs since last January and those are the government figures so tack on another 10% for the intentional undercount and that’s almost two million jobs right there.

Many retail chains have already folded and the forecasts looks bleak for many others. After Christmas sales there will be many going-out-of-business sales; the businesses, like their workers, are struggling just to keep their heads afloat and incrementalism just won’t cut it. Shooting for two and half million jobs, you might actually achieve two million but what good have you done if you lose another two million during the process? What is needed is a bold, dramatic stroke to create 10 to 15 million jobs to keep the economy from deteriorating further.

The market has spooked investors, so why not issue recovery bonds modeled on WWII war bonds. A new CCC to perform environmental cleanup, build fire roads, patrol borders, etc. for the millions graduating from high schools and languishing in towns without jobs. Thousands of jobs that aren’t being done now because of government cutbacks, like tutoring/mentoring programs, daycare, the list goes on almost forever.

After WWII the Volkswagen factory was in ruins but the machines were undamaged. The site was cleaned up and at the behest of the British military began producing cars. Not that they saw a market for cars but a need for cars and a need for jobs. Employment offices were set up, not unemployment offices but employment offices where you reported and told them your skills and they sent you to a job closest to it and the government paid you to do it. In many cases it was nothing more than reclaiming rubble or stacking bricks, but it was still employment.

The German author Gunter Grass recalls spending his days after the war working as an apprentice stone mason repairing bomb damage. In Japan the government set up employment offices where the worker would be handed his stipend and a card with the name of an employer and instructions to report Monday to the XYZ shipyard. “But I don’t know anything about building ships?”

“You will by Friday.”

The government then bought the ships and sold them on the open market. It subsidized the program while at the same time training its workforce. In all of these programs there was a desire to deal with an emergency. To take bold steps because half measures wouldn’t do and the need was too great and national existence was in the balance. The programs were nationalist, and even today in Japan it is considered a social faux pas to buy anything other than a Japanese car. Food in Japan is marked with flags of origin. Is that wrong? A nation without natural resources that lives and dies on trade to control what it allows in?

Japan is famous for its trade barriers. An Austrian ski company that was told, “The snow in Japan is different,” or the American company that wanted to import salad dressing and was stopped at customs and had their samples impounded. They offeried to dump the dressing out so that they could just show the empty bottles to the potential customers but they were told that nothing could be dumped down the drains in Japan without being tested first. This could be viewed as punitive, but the desire was to protect the Japanese worker.

To keep them employed, to keep the Japanese economy moving, the world was not altered nor lifestyles diminished because the Japanese consumer had one less pair of skis to choose from or one less salad dressing on the grocer’s shelf. During the Renaissance the city state of Venice was the richest in all Europe, her citizens paid no taxes of any kind. The kingdom was financed by a tax on imports and exports of its manufactured products. Its workers were prosperous because of their craft guilds, it was a simple idea, the well-being of the state is judged by the well-being of its citizens yet somehow five hundred years later our leaders have lost sight of that principle.

The founding fathers were all too aware of that and imposed tariffs on British manufactured goods. They feared losing our hard won independence by bankrupting our fledgling economy with a flood of imported goods. Instead America began to manufacture her own goods and her own ships and the economy flourished. History never changes. The economic problems of 1500, or 1781, or 1946, or 2008 are the same, both in their creation and in their solution.

A blending of what is good for the business interests and for the workers, and to find a balance between them is what is needed. What is foisted upon us today as globalism and free trade is nothing more than 18th century British imperialism. The workers toil and the manufacturers profit while the state dictates in favor of the mercantile class.

Our economy is swamped by cheap Chinese plastic junk and we are told that we can’t regulate this trade or the Chinese will respond by adding tariffs to the products that they import from us. Which are primarily raw materials and foodstuffs, so I say go ahead. Those tariffs will make domestic goods more competitive and create jobs. That’s why the Bush administration uses incrementalism; they can’t ever admit that they are wrong and that globalism as it is practiced today in America is a fraud, a con game developed by bankers and manufacturers to amass huge profits regardless of the cost to the American citizens.

Globalism is a funnel, not a gate. One billion Chinese labor for $5.00 a day and now our economy is in ruins. We sell them raw materials and they sell us finished goods. Korea sells us 700,000 cars and we sell them 6,900 and General Motors is the number two automaker in China and this helps the American worker not a whit. We give Citigroup $45 billion to bail them out and they respond by laying off 53,000 Americans with plans in the pipeline to hire a thousand in the Philippines. Citi paid $400,000,000 for the rights to call the Mets new ballpark “Citi Field.” Since American taxpayers have now bailed them out and Citi insists that a contract is a contract, let's call it American Unemployment Field, or maybe American Citizens Field.

I have been sort of quietly stunned, for some time, by the eager willingness of our economic elites to destroy their own businesses in the name of what is called "globalism". Nobody else in the whole world is as dumb as we are about this sort of thing.

I don't care what you call the cure, Liberalism, Socialism, Bagism, Shagism, Dragism, Madism, Ragism, Tagism, This-ism, that-ism.

I don't care how long it takes to fight the disease because I'll never stop. I'm fighting for the same things my Grandfather fought for. He made progress and showed us the way, I can live with Capitalism but if Capitalism can't live with me or with you. Then somethings got to go,

It is no longer just a question of comfort and luxury but one of survival and sustainability.
Moving the exploitation and pollution out of site isn't progress.

I like local control of local issues and global control of global issues, sort of a coincidence of scale between power and the problems that power addresses. But I have not figured out how to organize that or bring it about and maintain it.

But I do feel that we have a nationalist reaction coming, and long overdue. It is worth remembering that both Russia and Yugoslavia (as empires) collapsed in nationalist reactions, and I feel that that is where we are going too.