• Archives

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 23 other followers

  • Categories

  • Top Rated

  • Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 23 other followers

  • Categories

From now on, whenever you hear the term “the global economy” you should immediately equate it with the destruction of the U.S. middle class. Over the past several decades, the American economy has been slowly but surely merged into the emerging one world economic system. Unfortunately for the middle class, much of the rest of the world does not have the same minimum wage laws and worker protections that we do. Therefore, the massive global corporations that now dominate our economy are able to pay workers in other countries slave labor wages and import the products that they make into the United States to compete with products made by “expensive” American workers. This has resulted in a mass exodus of manufacturing facilities and jobs from the United States. But without good, high paying jobs the U.S. middle class cannot continue to be the U.S middle class. The only thing that the vast majority of Americans have to offer in the economic marketplace is their labor. Sadly, that labor has now been dramatically devalued. American workers now must directly compete for jobs with millions upon millions of workers on the other side of the world that toil away for 15 hours a day at slave labor wages. This is causing jobs to leave the United States at an almost unbelievable rate, and it is putting tremendous downward pressure on the wages of millions of jobs that are still in the United States. So when you hear terms such as “globalization” and “the global economy”, it is important to keep in mind that those are code words for the emerging one world economic system that is systematically wiping out the U.S. middle class. A one world labor pool means that the standard of living for the U.S. middle class will continue falling toward the standard of living in the third world. We keep hearing about how the U.S. economy is being transformed from a “manufacturing economy” into a “service economy”. But “service jobs” are generally much lower paying than “manufacturing jobs”. The number of good paying “middle class jobs” in the United States is rapidly decreasing. So how can the U.S. middle class survive in such an environment? What makes things even worse for manufacturers in the United States is that other nations often impose a “value-added tax” of 20 percent or more on U.S. goods entering their shores and yet most of the time we do not reciprocate with similar taxes. But whenever someone mentions how incredibly unfair and unbalanced our trade agreements with other nations are, they are immediately labeled as a “protectionist”. Well, someone should be looking out for U.S. interests when it comes to trade, because the current state of the global economy is ripping the U.S. middle class to shreds. Right now, the United States consumes far more wealth than it produces. This nation buys much, much more from the rest of the world than they buy from us. This is called a “trade deficit”, and it is one of the most important economic statistics. The U.S. runs a massive trade deficit every single year, and it is wiping out our national wealth, it is destroying our surviving industries and it is absolutely shredding middle class America. We cannot allow tens of thousands of factories to continue to leave the United States. We cannot allow millions of jobs to continue to be “outsourced” and “offshored”. We cannot allow tens of billions of dollars of our national wealth to continue to be transferred into foreign hands every single month. The truth is that the global economy is bad for America. The following are 23 facts which prove that globalism is pushing the standard of living of the middle class down to third world levels…. #1 From December 2000 to December 2010, the U.S. ran a total trade deficit of 6.1 trillion dollars. #2 The U.S. trade deficit was about 33 percent larger in 2010 than it was in 2009. #3 The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990. #4 The U.S. economy is rapidly trading high wage jobs for low wage jobs. According to a new report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth. Lower wage industries accounted for just 23 percent of the job losses over the past 12 months and a whopping 49 percent of the job growth. #5 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost. #6 In Germany, exports account for approximately 40 percent of GDP. In China, exports account for approximately 30 percent of GDP. In the United States, exports account for approximately 13 percent of GDP. #7 Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe? Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts of $110 billion. #8 In 2010, South Korea exported 12 times as many automobiles, trucks and parts to us as we exported to them. #9 The U.S. economy now has 10 percent fewer “middle class jobs” than it did just ten years ago. #10 The United States currently has 7.7 million fewer payroll jobs than it did back in December 2007. #11 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs. #12 In 2002, the United States had a trade deficit in “advanced technology products” of $16 billion with the rest of the world. In 2010, that number skyrocketed to $82 billion. #13 The United States now spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States. #14 In China, working conditions are so bad that large numbers of “employees” regularly try to commit suicide. One major employer, Foxconn, has even gone so far as to install “anti-suicide nets” in an attempt to keep their employees from jumping off of their buildings. #15 Wages for workers in China are incredibly low. For example, one facility in the city of Longhua that makes iPods employs approximately 200,000 workers. These workers put in endless 15-hour days but they only make about $50 per month. #16 In Bangladesh, manufacturing workers toil in absolutely horrific conditions and make an average of about $38 per month. #17 In Vietnam, teenage workers often work seven days a week for as little as 6 cents an hour making promotional Disney toys for McDonald’s. #18 Since 2001, over 42,000 manufacturing facilities in the United States have been closed. #19 Half of all American workers now earn $505 or less per week. #20 In the United States today, 6.2 million Americans have been out of work for 6 months of longer. #21 8.4 million Americans are currently working part-time jobs for “economic reasons”. These jobs are mostly very low paying service jobs. #22 When you adjust wages for inflation, middle class workers in the United States make less money today than they did back in 1971. #23 According to Willem Buiter, the chief economist at Citigroup, China will be the largest economy in the world by the year 2020, and India will surpass China by the year 2050. Those that promote “free trade” can never explain how the U.S. middle class is going to continue to have plenty of jobs in the new global economy. By merging our labor pool with the rest of the world, we have also merged our standard of living with the rest of the world. High unemployment is rapidly becoming “the new normal” in America, and wages are going to continue to decline in many, many industries. Already, there are quite a few formerly great U.S. cities (such as Detroit) that are beginning to resemble third world hellholes. If something is not done about our massive trade imbalance, even more cities are going to follow Detroit into oblivion. Unfortunately, most of our politicians continue to insist that globalism is good for our society. They continue to insist that we should not be worried that jobs formerly done by middle class American workers are now being done by slave laborers on the other side of the globe. They continue to insist that having 43 million Americans on food stamps is a temporary thing and that soon our economy will be better than ever. Well, it is time to stop listening to the politicians that are promoting “the global economy”. They are lying to us. Globalism is great for nations such as China and it is helping multinational corporations make huge profits, but for the U.S. middle class it is an economic death sentence. If you want an America where there are less jobs, where more Americans are on food stamps and other anti-poverty programs and where our cities continue to be transformed into deindustrialized hellholes, then you should strongly support the emerging global economy. But if you care about the standard of living of the U.S. middle class and you want for there to be some kind of viable economic future for your children and your grandchildren then you had better start caring about these issues and doing something about them. Please wake up America.

No one saw the uprisings coming, but their deeper cause isn’t hard to fathom

By Peter Popham

Sunday, 27 February 2011

 

 

Revolution is breaking out all over. As Gaddafi marshals his thugs and mercenaries for a last-ditch fight in Tripoli, several died as protests grew more serious in Iraq. Saudi Arabia’s King Abdullah tried to bribe his people into docility by splashing out $35bn on housing, social services and education. Across the water in Bahrain the release of political prisoners failed to staunch the uprising. In Iran, President Ahmadinejad crowed about chaos in the Arab world, but said nothing about the seething anger in his own backyard; in Yemen, the opposition gathers strength daily.

And it’s not just the Middle East. This is an African crisis: Tunisia, where it started, is an African country, and last week in Senegal, a desperate army veteran died after setting fire to himself in front of the presidential palace, emulating Mohamed Bouazizi, the market trader whose self-immolation sparked the revolution in Tunisia. Meanwhile, the spirit of revolt has already leapt like a forest fire to half a dozen other ill-governed African nations, with serious disturbances reported in Mauritania, Gabon, Cameroon and Zimbabwe.

Nowhere is immune: dozens of activists in China are in detention or under other forms of surveillance, and the LinkedIn network was shut down as authorities seek to stamp out Middle East-style protests there. In what is arguably the most repressive state on the planet, North Korea, the army was called out and five died in the northern city of Sinuiju after violent protests erupted there and in two other cities. The generals who rule Burma under a trashy façade of constitutional government were keeping a close eye on the Middle East, ready to lock up Aung San Suu Kyi again at the first sign of copycat disturbances.

Nowhere is immune to this wave of rebellion because globalisation is a fact; all the world’s markets are intricately interlinked, and woe in one place quickly translates into fury in another. Twenty years ago, things were more manageable. When grain production collapsed in the Soviet Union during the 1980s and what had been one of the world’s greatest grain exporters became a net importer, the resulting surges of anger brought down the whole Communist system within a couple of years – but stopped there. Today there are no such firebreaks, and thanks to digital communications, events happen much faster.

Why are all these revolutions happening now? Plenty of answers have been offered: the emergence of huge urban populations with college degrees but no prospect of work; the accumulation of decades of resentment at rulers who are “authoritarian familial kleptocracies delivering little to their people”, as Peter Bergen of the New America Foundation put it; the subversive role of Facebook and Twitter, fatally undermining the state’s systems of thought control.

Absent from this list – to the combined bewilderment and relief of the US and Europe – are the factors that were universally supposed to be driving populist politics in the Middle East: Islamic fundamentalism coupled with anti-Zionism and anti-Americanism. As one Egyptian pointed out after the fall of Mubarak, at no point during weeks of passionate revolt did either the Israeli or the US embassies become a target of the crowd’s fury, even though both are within easy reach of Tahrir Square. “Not so much as a Coke can was thrown over the wall,” he said.

Of course, that does not mean that allies of al-Qa’ida will not seek to exploit the growing chaos in Libya in particular, striving to turn it into a new Somalia-sur-Med. Nor does it guarantee that any of the other revolts will produce stable democracies. Because the real cause of these revolutions, beyond all the chatter about social networks, is a problem that is liable to get worse in coming years rather than better, and that is largely beyond the power of anyone to contain or control.

The first warnings of what was to come appeared in the form of a briefing paper on the website of the UN’s Food and Agriculture Organisation in December. “Recent bouts of extreme price volatility in global agricultural markets,” it said, “portend rising and more frequent threats to world food security. There is emerging consensus that the global food system is becoming more vulnerable and susceptible to episodes of extreme price volatility. As markets are increasingly integrated in the world economy, shocks in the international arena can now transpire and propagate to domestic markets much quicker than before.”

The “shocks” all occurred a long way from Cairo and Tunis. They included fires in Russia last autumn which wiped out hundreds of thousands of acres of grain; heavy rains in Canada, destroying the wheat crop there; hot, dry weather in Argentina which destroyed the soybean crop; the Australian floods which ruined the wheat harvest. The Middle East accounts for one-third of worldwide wheat imports. The combined effect of these far-flung agricultural problems was to bump up the food price index by 32 per cent in the second half of 2010.

The FAO likens “extreme price volatility” to great natural disasters – major earthquakes, tsunamis, catastrophic cyclones. “Historically, bouts of such extreme volatility… have been rare,” they say. “To draw the analogy with natural disasters, they typically have a low possibility of occurrence but bring with them extremely high risks and potential costs to society.”

A similar chain of unconnected farming catastrophes in early 2008 led to a similar outbreak of “extreme price volatility” around the world which provoked food riots in more than 40 countries, from Haiti to Bangladesh, including Mexico, Uzbekistan and Eritrea but also involving several countries caught up in the present round of uprisings, including Egypt, Yemen, Morocco, Mauritania, Senegal and Zimbabwe. All were among the 80 countries around the world that combine low incomes with food deficits – the need to import food, bringing exposure to wildly fluctuating world market prices. In these poor countries, food purchases can consume 70 per cent of income. The result, when prices of flour and grains shoot up by 30 per cent, is extreme distress – the sort of distress that sends people out into the streets in fury.

Abdolreza Abbassian, FAO’s chief economist saw – in his dry, cautious, academic manner – the present turmoil coming. “It’s getting a little bit uncomfortable,” he said back in December. “A lot of countries, especially the poorer ones, have to rely so much on world markets. They have to import food at much higher prices. Whether or not this will lead to domestic problems, turmoil, demonstrations, riots, the kind of things we saw in 2008, it is not possible to predict.”

For the poor of the Middle East, the price shocks at the start of this year were like experiencing a second killer earthquake in three years – but unlike with an earthquake, there was someone you could blame. So angry were the food price protesters in Tunisia that, after Mohamed Bouazizi set fire to himself, President Zine el-Abidine Ben Ali declared a state of emergency and promised to reduce the price of food. But it was too little, too late: by mid-January he was gone.

Tunisia’s turmoil, warned The Washington Post as the toppled president flew off into exile, “has economists worried that we may be seeing the beginning of a second wave of global food riots”. As we know now, it turned out somewhat differently. Food riots in 2008, revolutions in 2011 – what, where, who is next?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: