The US a Slum for the World's Wealthy

"…we're where Europe comes to slum--in the low-wage factories of the South and the run-down houses of South Los Angeles." LA Times editorial, 5/15/2011

It wasn't always this way. The United States, after World War II, modeled high wage, highly skilled union workers, producing goods for the world, and living well while doing so.

When the US occupied Germany and Japan after World War II, our government exported the highly unionized American model. Part of our rationale was that unions would foster democracy, thereby combating Japanese fascism and German Nazism. Unions would also improve lives, giving them a stake in postwar governments. Today, Germany runs a trade surplus: Germans earn high wages, work shorter hours, have long vacations and are relatively highly unionized (27% vs 9.6% in the US private sector).

And the US? Wages have at best stayed where they were in the early 1970's, while productivity has doubled. Work hours are longer in the US, and vacations get shorter. Meanwhile, our buying power erodes, and we have the priciest, least effective health care system among developed nations. Further, there are US states where unions are so scarce and so scared (like North Carolina: 3.2%) that workers effectively compete with the Chinese for lowest cost manufacturing sites. High unemployment drives down costs further.

The US competes with China for low cost work, while running huge deficits and cutting benefits. China has the largest surplus, but Germany sells high wage goods, and has the second largest surplus in the world; it even keeps its social democratic benefits largely intact under a "conservative" government!

Whether Germany will continue to do so well as union membership declines, is an open question, but greater union clout still makes a political difference. German firms setting up shop in the US, however, (mostly in the South) keep unions out and enforce work conditions unthinkable in Germany. Also, in the US, Deutsche Bank perpetrated mortgage rip-offs it could never have gotten away with in Germany.

All the American talk of cutting deficits and debts is a diversion. We're a mine of money for predatory capitalists the world over; we're also the center of predatory capital on Wall Street.

In the past 30 years, the US has almost done away with its New Deal legacy; coincidentally, unions have been losing ground since Reagan and regulations were stripped from financial institutions--freeing them to fail so spectacularly in 2007-8.

And who pays? Not the banks, not large corporations: everyone else, but especially our children and anyone dependent on government services: ultimately, anyone who is not wealthy.

America is so like Rome before its fall, when Senators governed in their own interests. They drove the peasants and middle class into serfdom, and monopolized the empire's wealth, laying it open to collapse, and, ironically in retrospect, to piecemeal takeover by Germanic invaders.