Job Destroyers II

In a previous post, I wrote that CEO's and takeover specialists like Mitt Romney are the very opposite of job creators: they are job destroyers when they lay off workers, "downsize," pit American workers against foreign workers and "offshore" jobs.

The banks are job destroyers, too, as is the Pentagon.

The banks provide capital to enable CEO's to offshore, for example, and loot industries through the kinds of scams that brought about the derivatives collapse. That particular scam, precipitated by the sub-prime implosion, dried up the booming construction sector, killing many more jobs. Banks also finance the corporate takeovers that cause companies to shed thousands of jobs. They promote these job-killing programs, because they can make handsome profits from them.

The Pentagon is also a job destroyer. That may sound strange, because politicians, especially those with defense industries or military bases within their districts, instantly complain that area jobs will be lost when anyone proposes cuts to defense programs.

The economic principle here is 'opportunity cost.' Numerous studies have found that defense jobs require twice as much capital per worker as non-defense jobs; they are capital intensive. They also don't produce things that enrich the nation; they produce instruments for destruction, mostly for use elsewhere. Incidentally, the move to legalize indefinite detention or assassination of American citizens in the US might mean that the destruction we finance could be our own.

In any case, it costs twice as much to employ a defense worker, or a soldier, as it does to employ a non-defense factory worker and three times as much as employing a teacher or healthcare worker. In some cases, the opportunity cost is much higher: a soldier in Afghanistan costs $1 million a year; it's probable that same million could employ ten teachers. The non-monetary cost is even greater: teachers educate the next generation, soldiers kill people abroad, or terrorize them, or, at best, help foreigners maintain security in their own countries. Meanwhile, children at home are crammed into larger and larger classes, getting less and less of the attention and help they need.

What benefits do we get for sending our military all over the world? Oil is probably cheaper here because of it, but think of what it costs us to accomplish that: three quarters of a trillion dollars a year. Walmart gets its goods mostly from China, where we don't have military influence, but perhaps imported goods would be costlier if there were no global American military presence.

Considering the effect cheap imports have had on our economy and our jobs, I rest my case: the military destroys millions of jobs.

Who benefits? The military brass and the owners of defense industries: the latter are our contemporary Roman Senators, described by the OWS as "the 1%."

Republicans call them "job creators!"

Eviction Does NOT = Defeat

What's to become of the OWS movement? The evictions in New York, Oakland, Seattle and other places almost simultaneously bespeak national coordination that was confirmed, inadvertently, by Oakland's mayor, Quan.

But the movement isn't about encampments in various cities. It is about the problems we face as a society, in which a tiny proportion (the one percent) monopolize the growth of wealth in this potentially wealthy world; they demand that people whose incomes are stagnating, or worse, pay the price for any amenities society offers--or do without.

This has been coming for years. Private luxuries proliferated, like toll roads for those who can pay to avoid traffic jams when they commute. Libraries are underfunded, because the wealthy don't need them; they have their own. The same is true of health care: the CEO's etc. have costly insurance policies paid for; why would they be for universal health care that might cost them higher taxes?

An old New Dealer used to say FDR saved Capitalism, because he realized that only by giving people a chance, a stake in the system, could the US in the Great Depression avoid either a Communist revolution or a Fascist takeover. We face the same choices in this Great Recession. Republican conservatives don't recognize that people will revolt, if their only choice is rebellion or misery. Timorous Democrats hardly offer an alternative.

Occupiers, now ousted from some of their encampments, were not slackers, were not losers by choice, when the effective unemployment rate is twice the official rate of 9%, and youth unemployment is higher than that. In addition, young workers are deeply in debt because student aid was reduced and student loans follow you to the grave.

What are people supposed to do, when jobs have been outsourced, along with opportunities? Only the owner class has chances, but even they depend upon people somewhere buying what they're selling. So, occupiers have made a basic point: the system is not working--for them--nor for most who are one job away from disaster.

The Roman Empire had a similar problem, created by the massive import of slaves from its conquests: Roman citizens were driven from jobs and land and the only solution Senators provided was "bread and circuses."

People don't want bread and circuses; they want dignity, meaningful work and a fair share of society's riches. Empires don't provide that; they breed the kind of inequality we're facing, because the tiny international elite, like Halliburton and Xe, grabs all the wealth ripped off in imperial adventures, while honest jobs at home are destroyed.

Evicting the Occupiers won't make that go away; it'll wake people up: the elite don't think about anyone but themselves. The rest of us, the 99%, have to look after each other, have to prevent the modern day Roman Senators from continuing to rip us off and have to claim the wealth we can create together.

Dollar Collapse!

It hasn't happened yet, but financial gurus are predicting the dollar will collapse, and "your American lifestyle" with it--unless you follow their prescriptions.

These gurus are describing a real problem: US indebtedness to the rest of the world. But the Fed didn't cause this, and it's not because The Government spends too much money; it's because we all do--abroad.

"Free Trade" agreements have advantaged American corporations. They have been able to export their manufacturing and services to lower wage, lower tax countries with lax or no regulations. They've driven American wages down and unions out, because American workers can only compete by earning less: wages have stagnated since the 1970's, while corporations have earned higher and higher profits. Furthermore, everyone buys imported goods and services, even when a product claims "made in America." Most have a huge amount of imported components, even if assembled here.

So, what can workers do? Until the bust, they adapted by working two plus jobs, depending on other family members working, and when these strategies weren't enough, they borrowed from their homes. Wall Street was awash in cash, encouraging wilder and wilder speculation--before the collapse, and after. That's why so much of the economy migrated to the financial sector; workers were providing it money through debts, and corporations were providing it money through overseas profits going to the 1%, who "earn" too much money to spend; so, they "invest" it.

Free trade means freedom for corporations, not freedom for workers, and it means importing nearly everything. So, how do we pay for the goods and services we no longer produce? We borrow through fiat dollars, which have, greatly depreciated since Nixon closed the "gold window" in 1971. Gold sold for between $1,726 and $1,743 on 11/2/11; but its price was set by the US until 1971 at a guaranteed $35 per ounce. Money supply has increased 13-fold since 1971.

Fiat money is designed to inflate a little bit each year: the Fed's target is about 2%. Moderate inflation stimulates the economy; deflation would accelerate depression.

But the real problem is: we are paying dollars created by the Fed, for goods and services abroad, while not selling enough to earn the Euros/Yen/Yuan, etc. to pay for those dollars. The "Free Trade" agreements, and policies encouraging corporations to export jobs and import goods have created the huge trade debt.

The trade debt causes government budget deficits, especially when the only people enriched by "free trade" (our Roman Senators) don't pay enough taxes, while everyone else is impoverished by it and needs help: "bread and circuses."

The dollar and the economy would regain strength, if Americans stimulated domestic production, creating jobs, got off imported oil and penalized corporations exporting jobs/production. It appears, however, that the "one-percent," like the Senators of the late Roman Empire, don't want to allow such reforms.

Perhaps the OWS movement can force their hand.