From
the blog formerly known as TexasKOS, soon to be called [watch this space].
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"Throw it away."
"Where?"
"What do you mean, 'where'? Away! Throw it away."
"Where's away? It's all full. Anyhow, our 'away' is someone else's 'here,' so do we know if they want it?"
This is how I saw the recycling debates of the late 1980s. Essentially, some people see the world as our toilet, not realizing that, since the world is small, if you treat the world like a toilet you'll wind up living in a sewer. We were running out of 'aways' to throw things to. It's the same thing today, except it's not trash, it's jobs.
Eventually, we started being more responsible about waste disposal. Of course the conservatives, the "adults," always have to be dragged kicking and screaming like some fantoid toddler anytime you want to actually deal with the world responsibly, but we got the job done. AND we found that there was money to be made in trash. Whaddaya know? Doing things right means new jobs! Recently, the Bushtards have started digging up old projections of waste and other environmental problems from
before we started doing anything about it and saying "see? All you enviro-weenies were wrong! The sky didn't fall!"
Trust a conservative to take credit for someone else's work, but I digress.
What I want to tell you today is that, yet again, we're running out of another kind of "away" right now. We're running out of cheap labor at a critical time for our economy. Throwing America's jobs away, thus lowering costs, was a way to produce prosperity for some as well as a way to induce others to emulate that prosperity by borrowing money to buy the badges of that prosperity. You already knew that our borrowing were eventually doomed, but now, it turns out, the practice of off-shoring American jobs has hit an unexpected limit.
Today's economics must-read is a lengthy piece from Stirling Newberry. In case you don't know, Stirling Newberry works as an economist for a firm that advises institutional buyers of emerging technology, small-cap stocks. So not only is he good for info on the kind of future money-makers I was talking about, he's also good for the macro view of the world economy, shorn of the BS that degrades the quality of the cable and print business news personalities who, after all, serve the interests of their parent corporations. They're not in the business of keeping you informed, they're just another form of advertising. In between their commercials, you get to watch commercials that look like news.
The reason Stirling's piece is so lengthy is because he's trying to educate on the basics as he goes along ... another good reason to read him regularly. Put him on your feed NOW!
STIRLING - "this is what is the long term worry - for the last 15 years the game has been to keep inflation down by sending more and more production to other countries. This has helped produce booms in China and India, as well as many other countries that are the "factory floor" for America. It has also produced a boom in commodity prices, as the people who live in these countries, gasp, start wanting electricity and plumbing and telephones and cars and roads and decent airline service.
That is, they are no longer willing to make first world goods, while living themselves in third world conditions.
If this is true - and the IMF seems to think it is - then the way of reducing inflationary pressures, neo-liberal globaliation - is at an end as a way of helping keep prices down. That is big, because remember, a huge fraction of the increase in "productivity" has been labor arbitrage - firing expensive workers here in the US, and hiring cheaper workers elsewhere. Inevitably, workers elsewhere stop being cheap. If that time has come, and indicators such as minimum wage rises in China seem to indicate that it has - there is no more win to globalization.
This is because we may be reaching the point where every dollar saved of labor costs, is now spent for higher material costs. Because production in China is resource prodigal for every dollar of output, what we are saving in wages, we are simply spending on high rises in Dubai and copper mines in South America."
The failure to anticipate the rise of the Asian living standard, I think, springs from the same problem as the failure to anticipate that people in Iraq would fight the occupation of their country: too many Americans think the little brown people will just take what we give them and be happy for it. Many Americans are, it seems, always being shocked that other people have their dignity, too. In fact, since they haven't been isolated in suburbs for half a century, getting all their information from people who tell them that standing up for their own best interests is wrong, we may find ourselves shamed, as Americans, as other people fight for a dignity that we ourselves gave up on long ago.
Progressives fight things like the exploitation of third-world labor not just out of some do-gooder sense of ... well, doing good. We do it because we understand that universal human dignity and respect it. We aren't the ones getting surprised. But we also know our history, worts and all, and we know what happens to working people when we allow the erosion of that dignity.
Our values are human values. We are opposed by people whose values are exclusively materialist. The right has been so dehumanized by their slavish materialism that they have come to expect markets to act like gods. Markets are said to be "rational" and "self-correcting," as if markets were anything other than an abstraction, merely the sum-total of all the actions of that market's participants. Leave everything to the "magic of the marketplace" and it will "magically" take care of itself. For this reason, the right thought that an exchange could effectively 'predict' the next terrorist attack. Tradesports "predicted" a Kerry victory in 2004, only to suffer a 1929-style meltdown as the moment of truth arrived.
When you forget that it's your hand in the sock-puppet, it's time for you to seek professional help.
Markets do nothing, are nothing but what people do. People are responsible. The whole vocabulary of the economist-as-corporate-spokesman on TV is to pretend that what people do to people economically isn't really anyone's fault, it's something blameless, like a hurricane. There's no sense in holding anyone reponsible for exploitation or the failure to plan ahead. We don't need to do anything about it, certainly not through our power as The People. That would be interfering in the market artificially ... whatever that means!
The fact is that smart and successful governments help develop fledgling technologies because it's a good idea and no one else is going to do it, a little thing I like to call "leadership." The people who make up the market won't invest in a technology until they have some firm sign that it's profitable. So, the public foots the bill for the technologies that will employ the public later on, making massive amounts of private wealth, some of which is recycled to repeat the process. When some technologies don't pan out, the shared costs cushion the blow.
Or, at least that's how it used to work. Especially during the Cold War, America relied on massive public investment in R & D, usually involving specialists with state-subsidized educations, to develop technologies that eventually had applications outside defense. Private enterprise and markets don't do that because they can't do that and they won't do that. Today, only established, massively-capitalized companies can afford to be represented by Congressmen, thanks to our system of legalized bribery. For this reason, and also because of pandering to superstition, America is losing its leadership in the thing that makes America rich.
We forgot to pay our prosperity bill.
America prospers when we collectively extend our protection and our funds to shelter and develop those things that we do well and that will be printing Americans' paychecks in the generation to come, rather than simply rewarding those parts of the country that vote Republican. Whether a corrupt Congress that sells rather than makes law, or a corrupt executive that buys votes instead of investing in the future, the opportunity-cost of corruption is poverty.
I saw enviro-tech jobs go to Europe when the Republicans decided to cave to old-technology polluters rather than develop a new sector. I've watched IT jobs go overseas because the labor was cheaper, but then stay there because other countries invested better in education. Now, I'm watching biotech go overseas because Republicans are trying to hide the Failure of Conservatism behind a phony faith. We are now in the second half of a Lost Decade, and goddam it, I'm sick of it.
We are told, by everyone from our parents to politicians to film clichés, that with hard work comes dignity. We're up against people who've made a mockery of this. For the Republicans, work is for suckers. But our best bet and strategy is to take them at their word, just as it is with matters of faith in politics. If we insist that we make good on the social contract of work, that hard work really is to be respected and that unearned wealth is a fluke, at best, and a threat to Democracy, at worst, if we make them make good on their word: they're through.
If, in fact, the old paradigm of neo-liberal globalization is really over, then we must grab a seat at the table when they design the new one. Right now, the GOP and the DLC are engaged in bunker politics. From bankruptcy to privacy to net neutrality to energy wars to college funding, they're building a bunker to protect their class. They have no hope for America's economic future, and are hunkering down to ensure they'll still be on top as America's standard of living starts to slide in the direction of Mexico. They gave up on our people and our principles a long time ago, but now they're giving up on America's future in a benighted attempt to protect their own.
I'm only a historian, and a pre-modern one at that, but everything I see tells me that America's prospects and Americans' notions of their own acceptable living standard intersect at mostly small scale, high quality production (from technology to agriculture) and the service and ancillary industries that support that production and its workers, and an education and health-care system that services all. As with waste-disposal, we must shout down those who say that it's just another cost, rather than a job-building opportunity. Those who have the courage and creativity will make on opportunity out of this crisis while the old, established powers will spend everything they've got (and everything you've got) to maintain a status quo that not only can't last, but that benefits only them.
It's either that or let those bastards in DC just give it to themselves. Getting the most out of our people means sharing the costs of developing our human capital. It's either that or let America slump back into a time when how far you went in life was determined by where you started, rather than your ability. Social mobility is the true measure of meritocracy, and right now we're headed in the wrong direction.
So the world economic system may be collapsing. So what? We'll eventually lick this problem. We always do. And when we do, I know there's going to be some rightwing dead-ender saying "see? Offshoring worked!"
Whatever.
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