Decimation of the Middle Class

[KA8NCR]

Okay, it's a bit harsh on the Bush Administration because this whole globalization and free trade nonsense is strictly a bi-partisan creation. But the article is right on; the promises of free trade and globalization have had come at the price of the middle class.

The wealthy would do well to remember history. When the lower classes in France had little left to loose, it was the wealthy that paid the ultimate price. While it's unlikely that you'll see guillotines popping up on Martha's Vineyard, this country is on the fast-track to becoming a third-world nation.

Roberts Article (http://www.counterpunch.com/roberts09302006.html)

[W1GUH]

There were times in the mid-80's, during ronnie's watch, when many levels of middle-management were being eliminated. #Many of those managers wound up under-employed and sometimes holding down two jobs just to keep their heads above water. #This was covered in the media for a while, then the stories disappeared. #That may have been the start of the wholesale elimination of good middle-class jobs in America.

But there's something else. #6-7 months after 911, in April, 20002, Carly F. finally got her way and merged Compaq with HP. #She immediately laid off tens of thousands of workers (I beleive the actual number was 40,000). #A good number of those workers will probably never get a job that good again.

Since then I've been reminded of 3000 people on 911, but nary a word about the economic violence Carly committed against employess of the company she ran. #This is especially poignant given that her reign at HP was declared a dismal failure. #Yet, she walked away with, what was it? #20 million?

What's wrong with this picture?

Paul

[k0ro]

There is an interesting conundrum in all this. Outsourcing does result in lower prices for the consumer. Consumers like that. It allows corporations like Walmart to keep growing (with roughly a 5% pre-tax profit margin, far better than Sears but far worse than banks and credit card companies). If this sounds bad, think of how many people, working and retired, count on the performance of Walmart for part of their retirement portfolio. It’s not as though Walmart exists apart from its myriad shareholders.

At the same time it leads to a loss of better paying jobs, the jobs needed to purchase these goods. More ominously it creates trade imbalances, which are essentially carried in float by Asian investors (particularly Chinese) buying our debt. As their share of debt acquisition grows, so does their ability to disrupt our economy, severely, if they suddenly stop buying U.S. debt.

One more item to throw into it: the creation of the Mexico-Canada superhighway/rail system. One of its key purposes is to bring goods in from Asia through Mexico, rather than through union-controlled Los Angeles/Long Beach. This will lower the cost of consumer goods, but at what price? Some reports claim this is being developed by private corporations which will get their money back by collecting tolls; other reports claim that the state and federal pockets (US!) will be paying the $200 billion tab by the imposition of new tolls on roads that currently don’t have them.

I have also HEARD but have not been able to substantiate that the U.S. will be ceding control/jurisdiction of the land corridor occupied by this system; it may be the sovereign land of some non-governmental agency. If true, then the U.S., state or local governments would be precluded from policing this road, allowing unchecked ingress of illegal aliens, weapons, drugs or anything else. Anybody else heard this last claim/have any information on it?

The project is being touted locally as a way to create construction jobs. Sounds like having a carpenter build his own gallows. By the way, this is not a partisan issue; republicans and democrats alike are putting in earmarks to fund sections of this in their districts!

Art

[W1GUH]

The fact that this (the Mexico-Canada superhighway/rail system) is being done so quietly, at least here where I've yet to see/hear it in the media, gives me a bad feeling. #If for no other reason that it might becom a fait accompli before the electorate can challenge their elected officials about what the plan really is.

Could someone post a link or two that points me (and us) at a place we can learn more?

Tnx

Paul

[K0RGR]

Yes, I'm afraid this has been going on for many years - it really started a few administrations ago, and has gathered steam since.

I also thought that the article was a little bleak, but it depends on your viewpoint. If you live in the midwest, where whole cities tend to exist around one manufacturing plant, and that plant closes, you have a different view of the problem.

Long before the shift of jobs to India and China started in earnest, we had a wave of domestic outsourcing, where a very high percentage of jobs that corporations would provide for themselves were outsourced to the lowest bidder. This has been going on for decades, with a corresponding decline in the pay for workers in those occupations that can be easily outsourced.

Now, the lowest bidders are in the Far East.

We were sold a bill of goods many years ago that all of this outsourcing would move the more unpleasant aspects of industry someplace else, while freeing Americans to become "information workers", selling American "know how" to these overseas companies.

What's really happened is that once the manufacturing moved overseas, the foreign companies discovered that they didn't need our "know how". In fact, they quickly discovered that with no local manufacturing, Americans no longer had any "know how". In many cases, they've built competing factories across the street from those built by the American companies.

The only possible way that we can reverse this trend is to revitalize our manufacuring industries. That won't be easy, since our factories will be competing with factories in countries that graduate many times the number of engineers we do every year. And a high percentage of those we train go back home to China when they're done with school.

We can argue about the merits of governmental interference with the free market, but free marketers and the progressives have to seriously and honestly consider where America has competitive advantages. We can't all be farmers, and the little farmers don't make any money.
Platitudes about being earnest and the magic of the marketplace will not feed the next generation.

We seem to enjoy some advantages in heavy machinery, and that needs to be retained.

[K0RGR]

A big part of the downhill slide has been the wave after wave of mergers in the country, with the result that many industries now consist of just a few competitors in each area. Close examination will show that a lot of those "American" companies are actually foreign owned now. Take BP-Amoco for an example.

Can somebody from the oil industry tell us how many oil companies now actually compete with each other here?

The merger mania really hit its stride under Ronald Reagan. When Congress threatened to intervene, it slowed down considerably. Then, under the current administration, it has skyrocketed again.

We are seeing a great concentration of capital and wealth in the hands of a very few extremely large and powerful companies. That has always been one big concern about capitalism - it may ultimately lead to the concentration of wealth in the hands of the few. The repeal of the 'death tax' will only aggravate this situation, as money and power are passed from generation to generation.

[wa8rti]

Yes I know they had their share of corruption and greed, but it was unions that pulled the blue collar worker into the middle class. With a decent #living wage came a change of attitude from lower class to middle class and the belief that their children #could and would do better. #In my first career as a teacher I was in a school where the grandparents had been immigrant #(Poles, Italians, Sovaks, etc.) mill workers living in slum row houses. Their children had moved to the middle and upper middle class neighborhoods and many of the grandchildren were heading for professional careers.

Ronny R signaled open season on unions when he fired all the air traffic controllers. Industry got the message. That, along with the government support for sending jobs overseas, will leave the U.S. like many South American nations. #A small rich elite, a vast majority of poor and a small segment clinging to their middle class life style.

I've been in management and have also been a union president. #And I'm aware that unions abused their power but so has management. #We need both and in their proper balance.