Are the American people obsolete?
 

Are the American people obsolete? - U.S. Economy - Salon.com

In every industrial democracy since the end of World War II, there has been a social contract between the few and the many. In return for receiving a disproportionate amount of the gains from economic growth in a capitalist economy, the rich paid a disproportionate percentage of the taxes needed for public goods and a safety net for the majority.

In North America and Europe, the economic elite agreed to this bargain because they needed ordinary people as consumers and soldiers. Without mass consumption, the factories in which the rich invested would grind to a halt. Without universal conscription in the world wars, and selective conscription during the Cold War, the U.S. and its allies might have failed to defeat totalitarian empires that would have created a world order hostile to a market economy.

Globalization has eliminated the first reason for the rich to continue supporting this bargain at the nation-state level, while the privatization of the military threatens the other rationale.

The offshoring of industrial production means that many American investors and corporate managers no longer need an American workforce in order to prosper. They can enjoy their stream of profits from factories in China while shutting down factories in the U.S. And if Chinese workers have the impertinence to demand higher wages, American corporations can find low-wage labor in other countries.

This marks a historic change in the relationship between capital and labor in the U.S. The robber barons of the late 19th century generally lived near the American working class and could be threatened by strikes and frightened by the prospect of revolution. But rioting Chinese workers are not going to burn down New York City or march on the Hamptons.

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What about markets? Many U.S. multinationals that have transferred production to other countries continue to depend on an American mass market. But that, too, may be changing. American consumers are tapped out, and as long as they are paying down their debts from the bubble years, private household demand for goods and services will grow slowly at best in the United States. In the long run, the fastest-growing consumer markets, like the fastest-growing labor markets, may be found in China, India and other developing countries.

This, too, marks a dramatic change. As bad as they were, the robber barons depended on the continental U.S. market for their incomes. The financier J.P. Morgan was not so much an international banker as a kind of industrial capitalist, organizing American industrial corporations that depended on predominantly domestic markets. He didn't make most of his money from investing in other countries.

In contrast, many of the highest-paid individuals on Wall Street have grown rich through activities that have little or no connection with the American economy. They can flourish even if the U.S. declines, as long as they can tap into growth in other regions of the world.

Thanks to deindustrialization, which is caused both by productivity growth and by corporate offshoring, the overwhelming majority of Americans now work in the non-traded domestic service sector. The jobs that have the greatest growth in numbers are concentrated in sectors like medical care and childcare.

Even here, the rich have options other than hiring American citizens. Wealthy liberals and wealthy conservatives agree on one thing: the need for more unskilled immigration to the U.S. This is hardly surprising, as the rich are far more dependent on immigrant servants than middle-class and working-class Americans are.
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Not obsolete, just unnecessary!

Especially to this administration.

this is more accurate.

I always wondered why the big rush to offshore all the jobs, when less and less people here are able to buy anything.

I wholly reject the idea that the government "allows" people to make money in exchange for confiscating a higher percentage of their income.

The people who live off of my income, confiscated through taxes, have to make no sacrifices for that privilege.

I disagree with that article.

I believe that is a short-term growth which will taper off in a relatively short amount of time. The USA had a similar boom after WWII - and that tapered off after a decade or so.

Once the economies of these 'third world' markets rise up to the same level of western economics like NAFTA and EMEA, the growth will taper off - it has too - otherwise, countries like China and India will experience an over-inflated economy and subsequent burst that we experienced a couple of years ago.

No market can succeed if it is artificially higher than what the economy can handle. Hopefully, due to our near-sightedness about that topic, and what we learned from that, China and India won't follow the same path.

I disagree. (But then again, I'm not in the wealthy class -- more like upper-middle class.). We have a large unskilled labor force in the USA -- but they prefer to sit on their rumps and collect unemployment. They don't need to learn another skill -- they need to learn another attitude. Get the folks in the US back to work and that will be the key to our economic recovery. Maybe we need to build another Hoover dam to get the economic wheel rolling. Maybe we need to pull ourselves up by our own bootstraps. And this is an exellent opportunity for the rich to really provide a win-win solution -- get the labor force to work on projects they invest in - and in the long term, they will only become richer, while providing a means for those out of work to earn a living. It's a win-win, I tell ya!

The American people are not obsolte despite what the rest of the world thinks of us. The stereotype is not true - there are still plenty of people here who have a strong work ethic, who are capable of contributting to an economic recovery, and who are willing to stay the course during these more difficult times.

Just my $0.42,
-Z-man.

This goes back allot further than this administation. You are now feeling the impact of a decline since the early 70's.

For those who think this country can survive on a consuption and service economy, your lifestyle is about to change.

The new manufacturing method ( I read this somewhere):

Create the idea in America.
Design it in Japan or Korea
Build it in China or India
Sell it on Amazon.com

Until we destroy the misconception that there are no jobs in America and that unemployment is required forever, you will not find many Americans heading back to work. I love hearing on the news that there are no jobs, then I drive past the Kwik Shop each day that is offering a signing bonus for clerks. WTF? Welfare will be the death of us.

Irony

Ericsson

Create the idea in _____
Design it in _____
Build it in China or India or any other low cost provider.
(I often argue that Africa will be the last frontier)
Sell it on Amazon.com

Why do any of the above in a high cost enviroment.

Does anyone expect NY to remain the world financial center forever.
I suspect it's exodus is quietly gathering speed.

We may have high unemployment for a long time.

I kinda am with you on this but I do think Americans are still creative.

I know a bunch of Americans with 2 jobs to make ends meet. They aren't even doing jobs they like. I'm currently looking for a second/better job. Some of the hard workers are a little depressed about looking and looking and looking for jobs with no prospects in sight.

I'd almost rather make the same money with 2-3 jobs than the one I have. I like what I do and it's a sweet gig these days. But it would be just about impossible to find another such gig if this one went away. If I had 2-3 smaller jobs, I'd not have all my eggs in one basket.

With the ability to automate production with robots, etc, I always wondered why production was being moved overseas. I thought it might be the environmental regulations, but that can only explain some.

You only need to look at the different tax policies in the different states in the USA to actually see the real problem: our form of taxation. Income taxes build extra COSTS into the production cost of our products. And we do not impose similar taxes on goods that are imported into the US. Look at where manufacturing is moving around the US: States with little or no income tax.

Now apply the same situation to the country and the world. The result? Goods produced in the USA are not competitive in the USA or the world. Low tax countries produce goods that are then cheaper in the USA. No extra taxes are added after the fact (tarrifs). Production is moved to low tax cost areas. My personal example in Romania showed that the tax saving was 3 times the labor savings.

The income tax is hurting this country. We need to eliminate it and replace it with a national sales tax.

Hmmmm...I think I will hang out a shingle that says..Get Your future told here

i'm gonna take a second job teaching americans chinese.

first lesson..hello is hello in chinese. see? easy!

shénme