Category Archives: Economy

U…S…A! U…S…A…er, China!

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Remember those chants after the US Olympic hockey team upset the Soviet Union?  We’ve come a long way since then.

Back then, our Olympic team’s uniforms were made in America.  But, today, our Olympic team’s uniforms are made in China like almost everything else we use.  The US Olympic Committee hired an American icon, Ralph Lauren, to design them.  Then he turned around and outsourced their manufacture to China.

Of course, many Americans are upset upon learning the news, including politicians on both sides of the aisle.  They called it an embarrassment.  They said our Olympic Committee should be ashamed.

But are they willing to do anything about it?

In fact, it’s Congress that is responsible for subsidizing corporations for sending jobs and money offshore.

Willing Ourselves To A Better Economy.

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As several economists have told me, we get the economy we want.  If we think the economy is good, we will buy what we want or need.  Our purchases will increase sales for retailers.  That will increase manufacturing, and the economy will thrive.  As a result, tax revenue grows and our deficits decrease.

On the other hand, if we think the economy is going to be bad, we will restrict spending and increase saving.  If enough people do this, our economy will be pushed into recession, jobs will be cut, tax revenues drop and our deficits and national debt will grow.

Most people know this, especially large corporations, the wealthy and politicians.  And they often manipulate these principles in order to cash in on easy money.  The losers of this sort of manipulation are almost always ordinary working people.

Everyone knows about the principle of buy low, sell high.  So if you’re among the wealthy and powerful, it doesn’t benefit you if the economy grows at a steady, sustainable rate.  In order to really cash in, you need to create periods of high growth, followed by recessions.  In the midst of a recession, you buy low.  Then at the peak of growth, you sell high.  That’s why a chart of our economic history looks like a ride through the Rocky Mountains.

The interest of the wealthy and powerful is obviously money.  But why would politicians be interested in such a strategy of manipulation?

In a word, Power.

If the opposition is in power, the GOP (Guardians Of Privilege) starts screaming about inflation, deficits, debt and other issues in order to frighten ordinary people.  If they scream loud enough and long enough, a large percentage of our population will hold onto their cash in preparation for the coming calamity and delay purchases.  As a result, the economy struggles.

That’s what’s been happening for the past 3+ years.

In order to make President Obama fail, Teapublicans have howled about “outrageous” deficits.  They talk about “saddling our grandchildren with oppressive, overwhelming debt.”  They’ve scared voters about illegal immigrants taking their jobs.  They’ve talked about an “out-of-control government” and “the end of freedom.” 

Unfortunately, the Tea Party, the religious right and others have scooped up this load of dung as if it were gold in the streets.

The only way to avoid being buried by the dung is to call it what it really is.  And to let everyone know that the people spreading the dung are the southern-most end of a north bound elephant.

The Freedom To Fail On Your Own.

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There’s a long-standing attitude of individualism in the US that causes people to inherently dislike any form of collectivism, such as collective bargaining through labor unions.  As I wrote in a previous post, we come from a long line of independent-minded people; people who were pushed out of Europe by dictators of all ilks, from royalty to the Roman Catholic Church.

Unfortunately, corporations and their lackeys on the right have been able to exploit this inborn streak of independence to extract money from us.  They have used a combination of lobbyists, campaign contributions, exportation of jobs, and right wing media megaphones to undermine labor unions and pit workers against one another in order to maximize profits while minimizing wages and benefits.

As a result of the propaganda, far too many Americans equate labor unions with socialism or communism.  Many poor and middle class workers vote for candidates that will continue the pattern of withdrawing employee benefits, eliminating pensions, depressing wages and foreclosing on homes.  Now they are turning their attention to the “entitlements” – Social Security and Medicare.

Yet many of us will continue to support corporations out of the fear of losing our jobs, misplaced loyalty, or the determination to “make it on our own.”  What these people don’t understand is that any individual’s disagreement with a large, heavily capitalized corporation is not a fair fight.  A retail clerk cannot fairly negotiate with a big box retailer.  An assembly line worker cannot win against a large manufacturer.  A maid cannot fight a large hotel chain.

The only chance they have to improve their position and their wages is to band together.  Individuals, no matter how hard they work, are far more likely to fail on their own than to make it on their own.

Greedy Bastards!

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Lately, I’ve been reading Dylan Ratigan’s book, Greedy Bastard$.  This is an even-handed account of how corporations and banks are sucking America dry.  I recommend it to everyone – Democrats, Independents and Teapublicans alike.  I warn you:  It will not only educate you about the state of our nation and how we got here.  It will infuriate you by showing you how corporations and politicians are destroying the nation while, at the same time, wrapping themselves in the American flag (which by the way is now made in China).

If you read it, you will get angry.  But that’s exactly what we need.  Check it out at: http://greedybastards.com/

How Performance-Based Compensation Is Killing America.

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Sometime in the late 70s, I met with a client to discuss his marketing plans for the year.  When I asked about the company’s long-term plans, the client said that his Fortune 500 Company no longer does long-term planning.  When the client noticed my obvious surprise, he told me that things were changing too quickly.  He went on to explain that the company’s CEO is now compensated with a base salary and performance-based stock options.  The higher the stock price, the more the CEO would be paid.

Now more than 30 years later, the effects of performance-based compensation are obvious.

CEOs now base their companies’ success on the share price of securities.  Not on brand value, number of offices and employees, company holdings and investments, or sales.  As a result, many CEOs are now willing to mortgage the future of their companies in order to maximize share price.  Of course, one way to accomplish their short-sighted goal is to increase productivity, aka employee layoffs.  Another popular method is to cut or eliminate employee benefits.  Yet another method is to export jobs to countries that have a plentiful supply of low-cost workers, no labor unions and few regulations.

There is no loyalty to long-time employees, vendors, communities, the nation or the environment.  The only thing that matters is the stock value and how that translates into executive compensation.  The average tenure of a CEO with any one company is slightly more than 8 years.  As a result, they often don’t care about what happens to that company 10, 20 or 30 years from now as long as they have time to cash in their stock.  If the company is aquired or merged, that only means the stock price is likely to go up.

If we want to take back our country from these greedy few, we have to change the way performance is measured.  The price of a share of stock is not enough.  We must also measure the value of corporations to our nation – the number of jobs provided, impact on our environment, contributions to communities, value of natural resources consumed, and taxes paid.

Until that happens, you will continue to see CEOs lead our nation in a race to the bottom.

The Teapublican Book of Lies.

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You know those things Teapublicans present as facts that just never quite make sense?  The ones that are repeated day after day on Fox News Channel and right wing radio?  The conservative ideas that have been tried and failed, but keep coming back?

I’ve taken 50 of those so-called “facts,” researched them, and presented my findings in a new book:  The Teapublican Book of Lies.  It’s a sort of handbook for debates with your conservative friends and family members.

Pardon the shameless self-promotion, but you can buy the book from Amazon.

A Real Memorial For Our Warriors.

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I’m writing this on Memorial Day, the annual celebration of those Americans who died in military service.  On this day, some Americans fly the flag.  Some attend memorial services.  Some place flowers on graves.  But most have a picnic, attend a baseball game, go shopping, take a mini-vacation or otherwise enjoy a day off.

What would be more fitting is to change our national mindset toward war. 

Some time ago, I realized that our nation has been at war for all but 33 years of our existance.  When we’re not at war, we’re preparing for war or meddling in the affairs of other nations.  We have fought against Native Americans, the British, Spanish, Mexicans, Libyans, Philippinos, Chinese, Japanese, Italians, Germans, Koreans, Vietnamese, Panamanians, Iraqis, and Afghans.  We have threatened many more.  We have even fought each other.

Some of these wars were necessary.  Many were not.

It’s time that we came to the realization that the US is a warrior nation.  We have spread our influence around the globe at the end of a gun.  It’s no coincidence that the world’s only military superpower is also the world’s greatest economic power.

We have created an American Empire in the mold of the Roman Empire.  But there’s an ominous warning in that comparison.  You see, the Roman Empire also ruled through military conquest.  Eventually, it over-extended its resources and collapsed of its own weight.  It simply could no longer afford the military and the political infrastructure needed to keep its subjects in line.

If the US doesn’t want to fade into history, we need to heed that warning.

Instead of a three-day weekend in recognition of those who have fallen, we would better honor our military heroes by reimagining our future; by seeking to avoid conflicts through diplomacy and true leadership; by refusing to use our military in support of our economic interests (aka greedy corporations); by relegating war to the avenue of absolute last resort; and by committing to never again send our sons and daughters to fight in an unnecessary war halfway around the world until all other options have been expended.

I can think of no better way to honor our fallen warriors than to dramatically reduce the number who join their ranks in the future.

Cutting Defense Spending Does Not Have To Compromise Military Readiness.

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Although Teapublicans insist on cutting government spending despite our fragile economic recovery, they categorically refuse to consider cuts to our defense budget.  They claim such cuts will leave the US vulnerable to attack.  So, when they passed the Ryan budget plan in the House, they included significant budget increases for the Pentagon.

In doing so, they disregarded a Pentagon report requested by Senator Bernie Sanders that shows, over the past decade, the government has awarded contracts totaling $1.1 trillion to defense contractors and their parent companies found guilty of defrauding the government.  In other words, when a military contractor is found guilty of defrauding the government, we demand a settlement.  Then we give them an opportunity to do it again!

If Teapublicans are serious about cutting deficits, the military/industrial complex is the very first place they should look.  Not the last.  The military budget is so bloated the Pentagon can’t even determine what happened to the $60 billion or so that has gone missing in Iraq and Afghanistan!

The money that can be saved by cutting Medicare, Medicaid and Social Security pales by comparison to the money that could be saved just by increasing oversight of military spending.  Moreover, the money spent on safety nets tends to go right back into our economy, while much of the money wasted on military fraud tends to line the pockets of CEOs and foreign dictators.

Of course, Teapublicans don’t want to stop with cuts to safety nets.  They want to hack away money from education, too; money that is truly an investment in our future.  Money that will pay us back in innovation and future increased tax revenues, as opposed to excess military spending that will result in more fraud and waste.

Both parties say this election will determine the future of our nation for generations.  The question is what future do you want?  More military and more wars?  Or a better standard of living for our youth and our seniors?

It seems like an easy choice for me.

This Is A Reason To Vote For Romney?

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Teapublican presidential candidate, Mitt Romney, has said that anything more than 4 percent unemployment is a failure for the Obama administration.  (It should be noted that the US has rarely achieved such a low unemployment figure.)  Now Mitt says that by the end of the first term of a Romney presidency, unemployment should be somewhere around 6 percent!

Hmmm…so Romney is already predicting that his first term will be a failure?

Even more puzzling is the fact that the Congressional Budget Office (CBO) estimates that continuing the policies of President Obama will result in an unemployment rate of 6 percent by 2015 – a year before the end of President Obama’s second term!  So, if this election is all about jobs as Mitt Romney has said, tell us again Mitt:  Why is it we should vote for you?

Requiem For The American Dream.

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This isn’t so much a blog post as an obituary.  The American Dream was defined as the ability for Americans to rise above their parents’ experience.  The ability to, as the result of education and hard work, become a success.  It is measured by the distribution of wealth and upward mobility.

In both of those measurements, the US now trails most of the world’s advanced nations.  A report by the Organization for Economic Co-Operation and Development (OECD) found that social mobility between generations is dramatically lower in the US than Denmark, Australia, Norway, Finland, Canada, Sweden, Germany and Spain.

The American Dream didn’t pass into history as the result of natural causes.  It was starved to death by Teapublicans who signed Grover Norquist’s “no new taxes” pledge.  It was bludgeoned by the likes of George W. Bush, Richard “The Dick” Cheney and their cartel of oil companies and military defense contractors.  It was driven off a cliff by greedy Wall Street bankers and their enablers such as former Senator Phil Gramm.

Republicans may have led the attack on the Dream. But many Democrats participated. President Clinton signed the Republican bill that revoked the Glass-Steagall Act allowing Wall Street bankers to gamble with your money and our futures.  He also signed a Republican bill opening commodity markets to gambling.

Many Congressional Democrats cast their votes alongside Republicans to starve government through the Bush tax cuts.  And they added their names to legislation approving the invasion of Iraq.

As the result of these actions, corporations were allowed to rake in large profits while sending our jobs offshore.  They were allowed to stash profits in offshore accounts to avoid paying taxes.  Banks were allowed to privatize their profits and socialize their failures.  The wealthy got even wealthier while paying lower taxes.  Banks got homeowners to sign mortgages at inflated interest rates, then took their homes to support the banks’ gambling habit.

The only question left is what now?  Will we allow economic disparity to grow dividing our nation into the haves and have nots?  Or will we resurrect the Dream?  The coming elections will provide the answers.