OK

This is only a Preview!

You must Publish this diary to make this visible to the public,
or click 'Edit Diary' to make further changes first.

Posting a Diary Entry

Daily Kos welcomes blog articles from readers, known as diaries. The Intro section to a diary should be about three paragraphs long, and is required. The body section is optional, as is the poll, which can have 1 to 15 choices. Descriptive tags are also required to help others find your diary by subject; please don't use "cute" tags.

When you're ready, scroll down below the tags and click Save & Preview. You can edit your diary after it's published by clicking Edit Diary. Polls cannot be edited once they are published.

If this is your first time creating a Diary since the Ajax upgrade, before you enter any text below, please press Ctrl-F5 and then hold down the Shift Key and press your browser's Reload button to refresh its cache with the new script files.

ATTENTION: READ THE RULES.

  1. One diary daily maximum.
  2. Substantive diaries only. If you don't have at least three solid, original paragraphs, you should probably post a comment in an Open Thread.
  3. No repetitive diaries. Take a moment to ensure your topic hasn't been blogged (you can search for Stories and Diaries that already cover this topic), though fresh original analysis is always welcome.
  4. Use the "Body" textbox if your diary entry is longer than three paragraphs.
  5. Any images in your posts must be hosted by an approved image hosting service (one of: imageshack.us, photobucket.com, flickr.com, smugmug.com, allyoucanupload.com, picturetrail.com, mac.com, webshots.com, editgrid.com).
  6. Copying and pasting entire copyrighted works is prohibited. If you do quote something, keep it brief, always provide a link to the original source, and use the <blockquote> tags to clearly identify the quoted material. Violating this rule is grounds for immediate banning.
  7. Be civil. Do not "call out" other users by name in diary titles. Do not use profanity in diary titles. Don't write diaries whose main purpose is to deliberately inflame.
For the complete list of DailyKos diary guidelines, please click here.

Please begin with an informative title:

I am finding that some financial blogs have a far more informative and enlightening perspective of late than political blogs.  Here there is often a mem that Obama and the Democrats can do no wrong and although some financial blogs are more pro-Republican than pro-Democratic, many are neutral politically - with some being simply anti-the current political/financial system.  

I was reading one of these financial blogs today and was struck by a statement buried in commentary about other issues:

Wealth is not created by consumption - it is created by PRODUCTION.

This fits in with what I consider to be another truism:

A nation's wealth is built by ADDING VALUE.  At its most basic third world level this is done by mining ore from the ground, cutting down trees - the 'exploitation' of existing natural resources.  At the next level of development a nation processes the ore it mines into metal, turns tree trunks into lumber and grows crops.  A step up from that metals are turned into products- simple castings or complex machinery, lumber is turned into furniture and other goods and commodity crops are turned into products.

At each stage the VALUE of the end product is greater than the value of the raw ingredients - the labor of the 'processors' is added and the end result is worth more than the sum total of the inputs used to create it.

For some time, the US economy has been based on CONSUMPTION.  Bush summed it up after 9/11 when he urged Americans to go and shop. Even now, our policies are geared to financing CONSUMPTION not production.

Another quote after the fold sums things up well-

Intro

You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

Another writer - sorry, the provenance escapes me - compared FDR and the Great Depression to our current re(DE)pression.

FDR borrowed money from Americans to put other Americans to work so they could buy goods made by other Americans and put MOPRE Americans to work.  Today we borrow money from foreigners to pay Americans NOT to work allowing them to continue to buy goods made by FOREIGNERS allowing FOREIGNERS to continue working.
There is a basic truism to this.  We have financed American CONSUMPTION for a few decades by borrowing from foreigners - while shipping more and more American jobs overseas.  Our consumption has been financed by DEBT - both as individuals and as a nation.

We stopped measuring the US economy in terms of PRODUCTION and started talking about CONSUMPTION.

And even though we have attempted to put people to work with some of our spending, the truth is that extended unemployment does NOT pay people to actually DO anything.  We do not have a WPA or CCC where people are paid to do SOMETHING of value - be it build roads, create park trails, construct public buildings or even paint murals for those buildings.  A cousin - out of work for over a year, employed by a local college for 6 months and now out of work again - voiced a not uncommon opinion.  He was thankful for unemployment payments but thought it wasteful that he was being paid extended benefits for 'doing nothing' - he felt that he HAD skills and could be doing something constructive in return for the aid he received.  There was a certain amount of pride at work here but also a rational pragmatism.  

paraphrased he said:

It's ridiculous to keep paying me to do NOTHING when I could be doing SOMETHING.  Government is getting further and further into debt which I'm going to have to pay off later with MY tax money.  This doesn't make sense.
Of note - this person is Republican.  His son - with a college degree - is employed (and happy to be so) as a Fast Food Assistant Manager - the best he could find.   The son is a Democrat.

Despite his politics, my relative has a point.  

He is being paid to continue CONSUMING - albeit at a more subsistence level- instread of being paid to PRODUCE.

More than a few Americans feel this way.  

They WANT to work.  They WANT to PRODUCE.  But they arfe not given the chance.

Everyone in government talks about 'creating jobs' - yet at the same time we continue to EXPORT jobs.

WTF?  I'm not the only one seeing this absurdity.

A decade or two back we retrained laid off factory workers to be computer programmers - even as companies started offshoring their Data Processing Departments to India.   A neighbor was a senior systems analyst on Wall Street - his job - and a hell of a lot more - evaporated a decade ago.

Now the same banks and Wall Street firms that sent DP jobs overseas a decade back are sending whole Accounts Payable, Accounts Receivable and Purchasing Departments overseas.  These are companies that took MILLIONS in TARP funds and 0% loans form government.  JP Morgan administers the new Food Stamps program using support personnel overseas.  It doesn't take a brain surgeon to say - USE AMERICANS to administer TAXPAYER FUNDED PROGRAMS. At a time when a record number of Americans are receiving Food Stamps why aere foreigners being employed to help administer this program?

Our preoccupation with CONSUMPTION makes the specious argument that

Low prices made possible by overseas production benefit Americans and more than offset job losses.
Remember WalMart's 'American Made' meme?  That was long ago replaced by 'Low Prices'.  But 'Low Prices' don't matter if your customers are unemployed.  WalMart sees a spike in sales at 12:01 AM on the first of every month now as new monthly benefits for unemployment and food stamps are activated at the beginning of the month.  People who have literally run out of food, toilet paper and other staples are waiting for that first of the month midnight benefits activation because they are flat out broke at the ned of the month.

A focus on CONSUMPTION is absurd and ecologically absurd on a planet with a growing population and limited resources.    People will CONSUME as much as they can when given unlimited resources - something responsible for the housing crisis.  You had people buying houses larger than they needed or could rationally afford - because banks LET THEM.  Houses were the last thing being made here in the US, a major component of the economy and it was in the interest of many to keep THAT bubble going.  In the long run it burst.

I can't help but think that until we refocus our priorities it will not matter how much we continue to fund CONSUMPTION when the goods being consumed are produced elsewhere.  Such an approach does not create jobs HERE.

But BOTH parties are in favor of 'free trade' - which has not been 'free' and has cost the US many,many middle class jobs.

Some saw this coming - this interview with Charlie Rose in the 90's was prophetic:

http://video.google.com/...

A focus ONLY on CONSUMPTION and the lowest possible labor price to PRODUCE the goods being consumed is destructive.  JOBS are not simply a cost component of production - they are an integral part of a society and hel define it.  How workers are treated, how jobs are viewed, defines a society.

LOW prices matter little, CONSUMPTION drops to zero, if people lack the means to buy goods.  And he way people have the means to buy goods is to PRODUCE goods.

And as for the transition to a 'service economy' - You can not have a 'service' economy if nobody creates the wealth for others  to spend.   That applies equally to Fast Food restaurants and Investment Banks.

Extended (Optional)

Originally posted to xrepub on Wed Sep 28, 2011 at 09:14 PM PDT.

Also republished by In Support of Labor and Unions and Community Spotlight.

EMAIL TO A FRIEND X
Your Email has been sent.