October 2010


Economics and Government26 Oct 2010 02:16 pm

I read the following two articles this morning and felt they help highlight two of my recent themes on this site, one that US journalism is dead and two that the emergent global economy will be dominated by a handful of people while everyone else is heading towards serfdom.
The articles will be in parenthesis, and my comments will not.

( Auto giant Ford Motor Company today said it has reported a 69 per cent jump in third quarter net income to USD 1.68 billion driven growth in North American operations.)

Many Americans will be angered by the fact that a bailed out company would be making such obscene profits. Yet, my focus would be in an investigation of how the profits were made.

(Ford attributed its robust quarter numbers to better products, momentum in North America and continued success at Ford Credit amid still-challenging business conditions.)

This explanation of profits is skillfully worded and misleading and, of course, is allowed to stand without any questions by the media reporting (or just printing) the story. First of all better products don’t make profits. So, the question is who is buying all these vehicles. There is no mention of the USA in particular which probably means sales were not strong here, but maybe had some improvement in Mexico and Canada (North America).

The real key here is the mention of the “continued success at Ford Credit amid still challenging business conditions”. What this most likely means is that the bulk of Ford’s profits are on financing of previous sold vehicles and not on current sales.

(”This was another strong quarter and we continue to gain momentum with our One Ford plan. Delivering world class products and aggressively restructuring our business has enabled us to profitably grow even at low industry volumes in key regions,” said Ford President and CEO Alan Mulally.)

(In terms of geographical locations, Ford has posted a impressive numbers in all the regions-North America, Europe and Asia Pacific Africa accept South America.)
Alan’s indirect message is that Ford is making more money selling abroad than in the US. And like most industries is making more profit through an increase of volume through an increase of customer base (global market). This means that while sales numbers are reducing in the US they are expanding in countries such as China, and coupled with the low cost of labor abroad is allowing Ford to make substantial profits even though vehicles prices are not increasing.

(Ford said it has,” posted a 28 per cent sales increase in Asia Pacific Africa, including a 14 per cent increase in China led by Fiesta demand and a 190 per cent increase in India led by sales of the new Ford Figo.” During the quarter, the company had announced plan to launch eight new vehicles in India by mid-decade and export Ford Figo from India to 50 markets.)

Yep, sales in emerging countries are what’s powering their profits along with the financing of vehicles.

(Ford said it will continue to post good numbers with increases in both cash flow and profitability in 2011.)

Sounds like a winning formula to me, get bailout money locally to help finance expansion abroad. Sit on hordes of cash, borrow money at almost 0% and then invest it in stocks and higher interest bonds and claim money made in this fashion as business profits. So, even though sales numbers are hurting you can still claim money made through investments as profits and make even more money as investors buy your stock because of your profit claims in quarterly reports. Add on to this the financing of vehicles already sold and:
Keep this up and you can become even wealthier without selling or even making cars and trucks. In the meantime until emerging markets go into a major economic downturn you can make even more additional profits through cheap labor selling cars to previously carless consumers.
Okay, now time for article number two.

(One out of every 34 Americans who earned wages in 2008 earned absolutely nothing — not one cent — in 2009.

The stunning figure was released earlier this month by the Social Security Administration, but apparently went unreported until it appeared today on Tax.com in a column by Pulitzer Prize-winning tax reporter David Cay Johnston.)

Jesus, three percent of the working populace didn’t make a penny and no major publication bothered to even print the information. My claim of US journalism being dead seems less like an exaggeration now huh.

(It’s not just every 34th earner whose financial situation has been upended by the financial crisis. Average wages, median wages, and total wages have all declined — except at the very top, where they leaped dramatically, increasing five-fold.)

As I have mentioned many times on this site it appears as if we are heading towards a global deflationary spiral which will assist in getting the American and European middle class more in line with the wages of the rest of the planet. More and more wealth and ownership into fewer and fewer hands.
(Johnston writes that while the number of Americans earning more than $50 million fell from 131 in 2008 to 74 in 2009, those that remained at the top increased their income from an average of $91.2 million in 2008 to almost $519 million.)

The number of the wealthiest people whose wealth and standard of living increased was cut in half in a years time. These people aren’t poor by anyone’s standard, but the elite club of winners in the global economy is shrinking fast. While almost everyone’s wages and net wealth is in severe decline, the top seventy four people did rather well. There total wealth didn’t just increase 5% or 6%, or even 20% which would represent an incredibly lucky year in the stock market, but their wealth went up some 500% to 600%.

(The wealth is astounding, says Johnston. “That’s nearly $10 million in weekly pay!… These 74 people made as much as the 19 million lowest-paid people in America, who constitute one in every eight workers.”)

Let’s hear that again, seventy four people are making as much as 19,000,000 people. In other words 74 people are making more than 1/8 of the entire work force.
(In September, Senate Republicans along with a handful of Democrats, partnered to defeat the Creating American Jobs and Ending Offshoring Act, a bill that would have raised taxes on companies that send jobs abroad and benefited companies that bring jobs back to American soil.)

This is not about just getting rich. It’s about getting rid of the middle class and reducing all but a few to a life of servitude and subsistence living. Few will own and the rest will be owned. This sounds harsh, and I hope I’m wrong, but the data is the data.

When I try to make sense of many of the actions and trends of the last two or three decades no other explanation seems to fit the data. Trust me I keep looking for a more humane explanation, but none fits the data.

I am by nature an upbeat, energetic and positive person. I think we still have many opportunities to stop this madness, but you can’t change a problem until you identify it. The more accurately you identify and define the problem the better your solution can be.

So, here’s to having the courage and stomach to thoroughly explore and understand the problem.

Jim Guido

PS The first article I read on Google News, and the second article is from the Huffington Post.

Economics and Social Issues24 Oct 2010 12:07 am

I am uncomfortable enough being an American, but even more uncomfortable being a tourist. For many years we traveled little. Mostly we visited family. A number of years ago we did travel to Italy and Greece to visit our homelands and get a sense of our heritage (I’m Italian my wife is Greek). Other than that we’ve done the occasional week at the beach where we rent a beach house with friends.

Currently we are in Puerta Vallarta Mexico at a time share which my wife received as a gift from a friend of ours. We are staying at a resort hotel and I feel totally out of my element. The experience of Mexico has been pleasant and we have done some activities and ventures to acquaint ourselves with the local culture and its history.

My discomfort with being at a resort has only subsided when we venture from the hotel and surrounding resort community. I find being treated as a tourist almost nauseating. For any of you who are frequent visitors to this site you are aware that I am no friend of our consumer culture and capitalism in general.

I do not like people serving me and treating me like an invalid. I do not like tipping people for invading my personal space and doing things I’d rather do myself. I do not like vendors and local merchants badgering me and getting angry when I do not spend money at every instant.

I can’t bear watching people slave in the heat to provide me services and then smile and ingratiate themselves anytime I approach or share an elevator with them. Why shouldn’t these people have some time to relax and enjoy the sun? I guess I’d feel better if we took turns pampering each other than me always being the recipient of their care.

As part of the package we were expected to take part in a time share presentation by the company which owns the resort. The two first people who talked to us were friendly and humble. We liked them and almost wanted to buy a time share to help them out. Yet, the wheel and dealer who they called in to go in for the kill and do the true hard sell was a very self absorbed salesman. He tried every sales strategy and forced bonding technique I’ve ever been acquainted with.

He reminded me of a character out of Roger Rabbit as he verbally bounded and gesticulated in caffeine induced energy. His efforts to engage and persuade us went everywhere from cajoling, to siding with us and finally, to challenging us and finally to insulting us for not taking advantage of this great opportunity and deal he was offering. During this time he was living in the salesman moment and had no idea how many times he had contradicted himself as he discarded strategy after strategy trying to find our personal Holy Grail of inducement.

At the end of his high pressurized presentation I felt a combination of anger and sadness at the man. He appeared to be a very successful salesman, yet he also appeared to be a very unhappy individual.

Walking the streets near the resort one perpetually has to fend off the aggressive questions from vendors, merchants and taxi drivers, who all seem angry when you attempt to ignore their verbal assaults and questions as they follow you down the street. Any attempts to be human and courteous on our part by making eye contact and saying no thank you only increases the intensity and length of their inquisitions and inquiries.

I bear no grudge against most of these people for they are just trying to make a living and survive. Yet, I do dislike the way they make me feel as I hate being a person who ignores others. I am by no means a wealthy person, yet I realize how fortunate I am to not have to behave in such a manner to insure that my basic needs are taken care of.

Yet, any local I talk to in Puerta Vallarta who has not been trying to get me to buy something has been very kind and pleasant. My experience here this week has only further secreted my negative attitude towards money and furthered my belief that money brings out the worst in people.

The odd thing is that none of the people staying at the resort strike me as being wealthy. For the most part everyone seems to be from middle and working class situations who use these vacations as a way to taste the “good life”. Most people seem almost as lost as I in terms of knowing when and how much to tip and all the other rules and expectations of pampered resort life. Alcohol and immature behavior seem to be the only ways people get beyond this performance anxiety of being a good hotel guest and tourist.

Historically the exhibition and exercise of wealth has always been accompanied by the amount of services one receives. From ancient Greece and Rome to modern England royalty and the wealthy have always been surrounded by servants who took care of their every need and desire.

I cannot relate to anyone who views having others to help clothe, feed and bathe them as a positive. In my world having wealth means being in control of all my time and what I decide to do with it. The wealthy who rely on servants and slaves have no true privacy. They are incessantly hovered over and watched by servants. The only way they have privacy is to ignore the presence of the servants and treat them as animals or invisible or inconsequential human beings.

In my world no one is inconsequential. When around others it is with a desire to share and interact with them. I want to understand their world and perspective and gain an appreciation for what gives their life joy and meaning. I want to feel their concerns and hopefully reach some point of agreement or commonality. I yearn for their validation and appreciation of my uniqueness as I want to validate them and appreciate their individuality.

The things I’ve enjoyed most of this vacation are the conversations I’ve had with others when they have disclosed to me something they hold dear, or when I’ve been able to catch a glimpse of how they experience their world. Likewise, my moments of joy in pure activity have come when I’ve been able to have a moment to taste and savor the local environment both in terms of nature and human community.

Lately the limits and harms of economics and capitalism in particular have dominated my thoughts. I used to be able to cite many benefits of modern economics along with its drawbacks and limitations, yet each passing day the harms and restrictions become more pronounced and the benefits become more relegated to the past tense. The benefits currently being produced and procured by capitalism I see as despite of rather than caused by our free market capitalistic society.

I feel like we’ve outgrown modern economics, that economics itself is a pseudo science like alchemy and that we are in dire need of the birth of chemistry. Yet, even more accurately I view economics in general as a stepping stone that has served its purpose and insufficient in successfully being able to meet the physical, emotional and intellectual needs of those living on the planet.

Modern economics is like a old pair of shoes that we have long outgrown. They use to provide us with protection, safety and were our means of comfortably moving forward and about, yet now they constrict, chafe and cause us more harm than good.

Jim Guido

Economics and Politics09 Oct 2010 03:35 pm

I find it a little odd when I hear someone express doubt of the authenticity of the facts of a report because it was written on the web and not by a major media outlet. While I agree that one should always be on the lookout for biased, agendized or even false journalism, I find it odd when people consider main stream journalism legitimate and discount alternative journalists out of hand.

The fact of the matter is that the majority of mainstream corporate media is inherently biased, spun, and written for a specific purpose. I’ve seen some statistics which state that over 70% of news stories are written by corporations and businesses themselves and placed in the news media.

The vast majority of the media itself is owned by a handful of families and to think that these families are not protecting or promoting their own interests and those of their friends is foolish at best. Yet, even if one does not have the time to fact check or research a topic, the very style and format of most of modern main stream journalism demonstrates its lack of integrity and authenticity.

The media, like most enterprises, has become increasingly dominated by economic processes. It is all about economic success and increasing market share. Smaller outlets are bought out or merge with other outlets in order to compete and survive the economic realities of a capitalistic society. Merger after merger ends up with a shrinking field of huge media entities.

These huge entities depend on access to newsmakers, advertiser revenues and increased market share for their survival. Such huge conglomerates have many divisions in varied fields of interest. It is important to note that every major news outlet has strong ties to military, financial, and industrial corporations which they almost daily have to report on. Conflicts of interest are inherent in this megastructure.

A reporter who is relatively harsh or critical of a political figure will not get exclusives or easy access to that political figure. Such a reporter will seldom be called on during press conferences and therefore endangers his position with his employer whose focus on the bottom line needs the story even if its soft.

The reality of reporters needing access to the people they report on isn’t the only factor making it difficult for reporters to be unflinching in their reporting the facts. Advertisers have a big say in how a story is written and reported. Even when they don’t censor or directly influence a potentially damaging story to their financial interests, they can always remove their financial support of the offending media outlet by dropping their ads from the radio, TV or print medium involved.
Just as politicians have become more products than leaders whose primary goal seems to be getting elected rather than an agent for designing a healthy society, likewise, the media’s need for market share makes their entire business a popularity contest and not so much about information, education and the unbiased reporting of hard facts.

On a national level it is almost impossible to write an expose or an honest portrayal of events without insulting or harming one of a news medias own subsidiaries. The huge media conglomerates are integral parts of mega multinational corporations which depend on consumer confidence and goodwill in order to continue to flourish.

This is not to imply that our news is always positive and business friendly. Everyone loves a good story and controversy sells more newspapers and magazines than anything else. The important thing is that in the long run business booms and short term dramas seldom lead to long term fiscal damage.

The advertisers themselves try to make their product look good, by making their competitors look bad. Yet, in the world of politics we thrive on the two party system. Our media loves to foster controversy between supposedly opposite poles such as conservative/liberal, democratic/republican, industrial/environmental, individual versus social rights and so on. In many of these battles the sides are really just two sides of the same coin and this easy controversy is used to distract people from real issues and choices.

The difference between Democrats and Republicans has been shrinking for decades now. Since both parties are dependent on the financial support of the wealthiest Americans neither can afford to truly represent the interests of the common man (unless you can convince the common man to support the interests of the wealthiest Americans). Both parties now support big business, war, Wall Street, etc., the only debate is in how they support these entities.

The days of classic journalism have been gone for decades. News reports no longer strive to be objective and neutral, they no longer just report the facts answering the basic questions of who, what, where and when. Yes, even in the old days specific perspectives were given, but when one perspective was given so were many others. Now, there are only two black and white perspectives given, these two viewpoints are usually labeled as democratic and republican or conservative and liberal.

I can hardly think of a single issue in which my viewpoint falls inside either of the two camps. I can’t recall the last time I read a report by the mainstream media or heard a speech by a politician which I felt articulated or even came close to a perspective I have.

I know many people who still consider outlets such as PBS and NPR as objective and even humanistic. Though I’m not a regular consumer of these outlets I have noticed a dramatic shift away from objective investigative reporting, or even a humanistic perspective to one which is noticeably status quo and supportive of current power structures and their policies.

Often times the opposing perspectives I hear regarding domestic and international policy on NPR radio are very narrowly defined. It’s like hearing if the choice is whether to watch an NFC or AFC football game and totally ignoring the possibility of the hundreds of viewing choices one has while those games are on TV. No one questions wars or the ethics of political policies, but only the two narrow and almost identical strategies of republicans and democrats.

Television and radio programs are well rehearsed in which the execution of the newscast must be planned out to almost the exact second. Even the bulk of interviews conducted on radio and TV though attempting to sound impromptu and natural are for the most part totally rehearsed. Questions and responses of supposed candid interviews are preplanned and prepared for, thus allowing interviewers a smooth interview with no dead and uncomfortable air space and no surprises for the person being interviewed. Despite the fact that most interviews progress in this seamless manner and fit perfectly into an exact time frame for the newscast, most people seem to buy into the authenticity and spontaneity of the interview.

Reporting the facts and being objective has been replaced by news anchors who explain the news to us and engage in highly emotional and judgmental language. In a story or report it is often obvious which “side” we are supposed to believe or support. The bad people’s quotes, organizations or nations are littered with words such as “so called”, “alleged” and their actions framed as “terrorists” or “insurgents”. While the good guys are often the victims of a given situation and their quotes are certain and contain no doubt. When the need for description is called for they will be referred to do as defenders of justice or freedom fighters.

One of my favorite phrases used so often in modern news reporting is “some people feel”, or “some people believe”. In reality this is a total non-statement, but used artfully it can steer public opinion in the direction you want it to go. The authority and voice tone of the speaker is the only thing giving the phrase “some people think” any validity or influence. Yet, these phrases are uttered by news reporters more often than almost any other.

Obviously in any debate some people think one way and others think the opposite, the newscaster is taking sides by only stating one side. Comments such as “some economists think concerns regarding the economy are over blown”, “some experts feel that entitlement programs reduce productivity”, or “some scientists feel that global warming is more myth than fact”, all are misleading and prejudicial. Any statement of fact should have ample data supporting it, resorting to “some people” opinion statements is not good journalism nor a good sign of the objectivity of the report.

Early on in this post I pointed out some of the factors which have greatly contributed to the death of ethical and responsible journalism. These factors included the increased role of advertisers, the world of wealth the owners of mass media belong to, and the financial realities of media including market share and keeping friendly relations with news makers to insure constant access. Let’s expand on these ideas a moment to further articulate the growing sham that is portrayed as objective journalism.

So often our journalists are asked to stay mute or avoid reporting important news for the sake of “national security’ or if their reports could put “honest Americans in danger”. When reporting on the Iraq war journalists were banned from reports which could provide “aid and comfort to the enemy”, or divulge “sensitive information”. Instead they were required to just cover the press conferences held by the military to update the public on the war, or become “embedded” with the troops in chosen activities. The danger of not following these conditions was obvious in the fact that the Red Cross and foreign and alternative press incurred bomb and artillery attacks on a number of occasions even when they were clearly marked or had recently communicated their position and purpose.

No photos were allowed of military action or of injured or killed servicemen. Any report at all critical of the war or the actions of our military was attacked as anti-American and a danger to our troops. Without balanced and objective coverage of the war American’s weren’t able to monitor and question the policies and actions of its military. A case could be made that freedom of the press could alert the public when a military campaign is unnecessary of ill advised and thereby save the lives of our troops and our national security by removing us from battles unfitting to the goals and ideals of a world power.

One has to wonder about our government’s concern about national security and its relation to what is reported on the news. If filming our troops and military actions in a war zone is a threat to national security then why is not a danger to frequently encourage our press to insult and antagonize our enemies and their leaders?

The list of foreign leaders and nations which our leaders through the media label as evil and crazy is quite extensive. If it were true that these leaders and these nations were truly a threat to our national security why would we publicly call them crazy and ruthless? If we really were vulnerable to their actions and military attacks why would we acknowledge and admit this? If our media retained a shred of journalistic integrity don’t you think that be asking our leaders these questions?

The asking of questions in America which does not serve the interests of the military/industrial complex, or fit into the conservative/liberal debate is all but disallowed. Asking a question when facts don’t match the official story is considered paranoid or conspiracy thinking.

It is easy to view the national media as a lap dog for both the government and the wealthiest of Americans. A short list of what appears to me to be obvious examples of either utter stupidity or complicity should suffice to make my point.

When the towers came down they sure looked like a planned demolition and they came down at near speed of free fall totally inconsistent with the plane impact and resulting fire official story. This doesn’t even speak to the tower that came down which did not suffer any plane impact or direct fire caused by jet fuel. Of course, right away people defending the official story will accuse me of being a conspiracist or assume that I believe it was an inside job. Yet, strip the name calling and labeling away and the questions still remain. I have no idea what happened but why weren’t the logical questions asked?

Soon after the towers came down there were concerns regarding the air quality in the area. The EPA and other “experts” claimed that the air was fine despite the fact that workers and residents were complaining about symptoms which would typically signal a severe reaction to toxic air quality. Yet, despite this obvious contradiction of the official story I did not see any news report where they researched, investigated or questioned the official story in any substantial manner, or interview someone who felt the air was not safe.

The recent Gulf oil spill quickly went from ecological disaster to past history in an amazingly short period of time. The media once again was forbidden to film the spill or the clean up efforts. Then whole procedure was handled like a war situation where the media was forced to limit their reporting to information conveyed at the daily press conferences held by BP and the government.

Once the well was in the process of being capped the story went away. I saw some follow up stories in outlets such as the Christian Science Monitor in which the headlines proclaimed that the Gulf though injured was safe and quickly recovering. Most of the articles I read were artfully written to give the impression that the major harm was done and the long term prospects for the Gulf were promising.

All the articles talked of how effective the clean up efforts were progressing and that though the clean-up may take years, the general health of the waters and the sea life was better than anticipated. The articles that went into some detail do so in the following manner.

First they would state a range of gallons of oil that had been sucked up. These estimates were vague and never expressed in terms of the percentage of total oil spilled. Second they would state that some oil was sinking to the bottom of the gulf and described this oil as being relatively inert and only a harm to the sea life it was covering at the bottom. Each article hinted that the sinking oil was being caused by the chemical dispersants being amply used in the cleanup. No word of explanation was offered as to how something used to disperse the oil was somehow responsible for its coagulating and sinking.

In fact not one single article I read (of over two dozen) mentioned the fact that the oil that was successfully dispersed wasn’t gone, but only dispersed into the water. They would say the noun dispersant but avoided all verb forms which could imply that oil was being dispersed and not removed. Not only did the reports and journalist not ask any questions regarding this conflict, or report the actual mechanics of chemical dispersants, but they also underplayed the toxicity of the chemical dispersants. In sentence after sentence they would say that the dispersants have not been “proved” to be more harmful than the oil, and that in fact they are “considered” to be less toxic than oil.

The following parts of the articles truly show the death of journalism. They went on to say that since the chemical dispersants were less toxic than oil, a combination of the two was actually less toxic than oil alone. They stated that a gallon of oil was far more toxic than a half gallon of oil and a half gallon of dispersant. What they led a reader to believe was that the dispersant was replacing the oil it was dispersing and therefore making the gulf less toxic the more it was used. What was missing was any information regarding the amount of dispersant used compared to the amount of oil in the gulf.

Yet, since by its name a dispersant doesn’t remove but only disperses the most logical conclusion would be that we now have the toxicity of the oil spill plus the toxicity of the dispersant. I was horrified when these logical assumptions weren’t even posed as questions for the professionals to answer. So while the headlines of most of the articles proclaimed the Gulf as being safe, these claims were neither supported or questioned by the content of the articles.

A logical person is only able to conclude that the dispersants were not used to clean up the Gulf or reduce the toxicity of the water, but only to disperse the oil diluting its toxicity by spreading it over a greater area while at the same time making any further attempt at collecting or removing the toxic oil less possible if not impossible. Instead of collecting and cleaning up the massive oil spill, we decided to disperse it into the water system by adding additional toxicity to the water through massive use of chemical dispersants. Though our government showed a moment of backbone and humanity by ordering BP to stop using the dispersant they were and find a less toxic alternative, they did nothing when BP refused to comply and continued the use unabated.

There are literally hundreds of examples I could give in which it appears our national media has at worst lied to or deceived the public and at best did not ask the basic questions inherent in being a journalist.

Many of the world’s tragedies could be reduced and in some cases prevented by media outlets with integrity and ethics. Events and situations such as famine, torture, genocide, epidemics, slavery, abuse, crime and mass exploitation could be reduced or rectified by a free and ethical media. Yet, currently one has to wonder if the media is exacerbating these events and situations by being propagandists and apologists for those who stand to suffer financially by an open and thorough reporting of events and its related discussion.

Jim Guido

Economics and Psychology and Social Issues02 Oct 2010 01:26 pm

Yes, it does appear that the USA is going retro and that we are heading towards an economic reprisal of medieval serfdom. It doesn’t appear that any economic recession, deflationary depression, hyperinflation or economic rebound can steer us off this course. The wealthiest are becoming wealthier and are set to increase their percentage of ownership of assets and resources.

The gulf between the have’s and have nots is getting wider by the day, and the policies and structures promoting this expansion of disparity is pretty firm. The wealthiest no longer need a prosperous and expanding middle class to support their profit margins as vital consumers. This need has been decreasing over the last few decades due to the globalization of industry and economy.

The most successful companies such as Walmart ushered in the new global business model. What they found is they could lower prices and profit margins and still not only survive, but become the leader in their field.

The logic is pretty easy to grasp. You can reduce the need for high profit margins per business transaction by sharply increasing the volume of your sales. If I make a dime per sale of product and my market has 1000 customers I stand to make a hundred bucks. Yet, if make just a nickel per transaction yet my customer base is 10,000 than my my profits balloon to $500.

So, each time a business substantially increases their customer base their profit margins and therefore the prices of their products can come down while total profits escalate. So, a city wide business needs higher profit margins than a state. Each level of operation up from city, state, region, nation, international and global makes lower prices possible while still protecting total profits.

As your customer base rises your prices can fall. This also means that the individual purchasing power (or wealth) of your customers can continue to decline as the volume (numbers) of your customers increases. This is why as companies go global they can afford the standard of living of their potential customers to decline. They don’t need wealthy consumers to pay high prices for their goods and services, they just need a lot of people buying products and using their services.

A corporation’s large customer base and global audience allows it to offer significantly lower prices to the customers than smaller and more local operations. The poorer the customer base the less able they are to purchase the goods from the smaller businesses and therefore the smaller businesses go out of business. The larger businesses therefore lessen the players in the field essentially becoming the only game in town, which increases their client base and allows them to lower their prices even further while not injuring their total profits.

Yet, even though this process has a logical endpoint whereby the gulf between the have’s and have nots makes the customers too poor to sustain a global corporations total profits, a change in direction is unlikely. First, our most successful businesses have never shown a real concern for sustainability but instead are driven by immediate and short term market conditions and opportunities. Second, ownership is the real source of wealth and if you owned 90% of the land, structures and resources of a nation who cares how much its worth in terms of dollars.

When all is said and done, it is yours and you can do as you please with it. When one is lord of the manner and everyone is your serf, money is kind of unnecessary isn’t it?

For the wealthiest of corporate owners the benefits of the demise of the American and European middle class seems to far outweigh its resurgence. The practical obtaining of a capitalistic global economy would be endangered by any market conditions allowing for a narrowing of the economic gulf or a more balanced distribution of wealth. The Walmart model outlined above seems to be a logical necessity of the global marketplace and not a temporal strategy.

This, as they say, is the new normal.

Every since the birth of the machine age and automation we have been on this path. The machine transformed the agricultural industry by replacing human and beast labor by advanced farm equipment. Increases in production and yield allowed food prices to fall as larger and larger farms arose. Large farms put small farmers out of business which ultimately led to huge food conglomerates which control the vast majority of farming for the entire globe. Not even the most fervent farm fan imagines that we will ever return to a society in which a significant portion of the populace is involved in commercial farming.

The obvious fact that progress in technology lessens work forces and job opportunities has been clouded by the fact that many new jobs are created by new technologies. Yet, as that field and its technologies progress the need for human labor decreases due t the entire progression we talked about above as businesses get larger and larger and their customer base increases.

The increasing complexity of modern society and global communication allowed the US and Europe to create and provide jobs to support the emergence of the postwar middle class. Yet, we may be at the point where the amount of complexity will not be able to produce a great number of jobs and as we pointed once companies global they don’t need their consumer base to increase their earning power.

Just as the agricultural industry need for human labor has become a fraction of what it once was, so the same is happening in a number of fields from manufacturing, to IT, to communications, etc. As I pointed out in some of my recent posts, even our most high skilled and trained professionals are bering replaced by computers, robots and machines. Much of the work previously done by surgeons, accountants and engineers are now done better and more efficiently by technological wonders.

It is common today for us to be deluged by a number of half truths deflecting us from the inevitable reality outlined in this post. We are told that we are losing jobs to third world nations and their cheap labor. This is partially true, but they would need us much anymore anyway and they could completely automate if they desired.

A second falsehood is that our workforce is undereducated and under skilled. We are assured that if we go back to school and become better trained we will find employment and financial success. First, of all it is ridiculous to think that we have all these professional and highly skilled jobs waiting to be filled out there.

We never have had, and certainly do not currently have an economy or social structure able to support a nation of graduate and post graduate professionals. What it comes to technologically based jobs dealing with computers, IT and the like the idea of getting training which will insure you of a long term career in these fields is absurd. Advances in these fields are happening daily and skill and knowledge training are an on-going issue and can’t be alleviated by going back to school.

Robots and computers can be programmed, reprogrammed and up dated in the flash of an eye, human technology workers cannot learn new software, procedures and systems in a profit oriented time frame. When it comes to technology fields humans will never make the best or most cost efficient workers.

The simple fact is we don’t have the billions of jobs required to keep everyone on the planet gainfully employed. Keep them busy, maybe, but provide work worthy of a living wage at today’s living expenses is not feasible.

To some this post may seem pessimistic and depressing. Yet, I don’t feel this the case at all. There are plenty of solutions available, but only if we first identify and acknowledge the problem.

For those feeling depressed by this post, I recommend you read more of my posts, lyrics, books and listen to the songs contained on this site.

In closing I thought I’d include a parody of Surf City the old Beach Boy classic as a bit of comic relief. This was written in all of ten minutes so please excuse its rough spots and please feel free to pen your own versions (not for profit of course unless you want to get permission from all the necessary sources).

Serf City USA

No jobs for anyone

I work all day but make no money
Serf City here we come

I’ve got a mortgage to pay, and my credit is lousy
Serf City here we come

Well, my roof has a leak, and my windows are broken
But, my house is still better my neighbors is a joke man
l
And we’re goin’ to Serf City, ‘bout to be a bum
You know we’re goin’ to Serf City, probably need a gun
You know we’re goin’ to Serf City, bankrupt and glum
You know we’re goin’ to Serf City, be a homeless one, now
Low pay for everyone

You know the banks give no loans because of all the owing
Serf City, here we come
My wife’s got cancer my son’s off the program (fell off the wagon)
Serf City, here we come
Yeah, I lost my health insurance and money’s tight
If I had life insurance maybe I could die

And we’re goin’ to Serf City, ‘bout to be a bum
You know we’re goin’ to Serf City, probably need a gun
You know we’re goin’ to Serf City, bankrupt and glum
You know we’re goin’ to Serf City, be a homeless one, now
Low pay for everyone

And if my body breaks down on my way to serfdom
Serf City, here we come
I’ll push the shopping cart full of my belongings
Serf City, here we come
And when I get to Serf City I’ll be ready to hurl
And hope my wife lives to be my serfdom girl

Jim Guido