An Economic Quagmire

I was reading an article in last week's local paper concerning a local office furniture manufacturer. They were in a celebratory mood because the price of their stock went up, meaning bonuses for the guys at the top, and a general party atmosphere at the stock holders meeting. And how did they fund this party? Buy cutting manufacturing jobs.
The article then went on to point out one disgruntled stockholder, the victim of what I like to call the employee owner scam. Many corporations offer stock to employees, and encourage them to purchase it to work towards becoming "employee/owners". And so, when the stock prices were high, as in the case cited in the article, $35 a share, the employees bought company stock thinking it was the fast track to job security. I mean, if you're part owner of the company, you can't be fired, can you? Also, as employee/owner, you are more liable to be aware of waste within the company and become vigilant towards preventing waste, right?
Well, then came the stock market "correction", when the stock market bubble of the nineties burst, stock prices fell, and corporations began to look for ways to raise their stock prices, and began cutting manufacturing jobs and outsourcing them. So not only was this gentleman unemployed, the stock he paid $35 a share for was now at $18 a share. The upper echelon of the company, however, didn't feel a thing. Not only did they not lose their job, they got more stock options, and more stock because it was cheaper. Not only that, because of the operational cuts, they got nice bonuses to top it off. All at the expense of the guy who paid too much for his stock because he thought he was doing the right thing.
The US used to have a manufacturing based economy. A company paid a worker a living wage so that they would turn around and put that money back into the economy buying new products for the home, with enough left over to put into a bank account. Banks then could loan out the money to businesses, those looking to start a new business, or those looking to expand an established one. The more capital a bank had to work with, the lower the interest rates were. A recent study revealed most people don't have much in the way of savings (which is probably good in lieu of the government spying on private banking records)or in the way of a retirement plan.
It used to be what drove the value of a company's stock up was the introduction of a new product. Innovation was the key, develop a product that Americans had to have and your stock price would go up. Now all innovation is in the financing department, find away to cut costs and your stock value will rise. Why? Because most Americans aren't buying new products, as the manufacturing base erodes, so does the market for new products. Right now, we're seeing the automakers dealing with slumping sales, laying off large numbers of their work force because no one's buying new cars. Do the math. A person working in the manufacturing sector making $40,000 a year who loses their job and takes a lower paying job in the service industry making half as much doesn't have the money to run out and buy a new car.
It used to be that the technology field was safe from this as well, but even now those jobs are being outsourced.So in fact what the US has now is two econmies, the upper economy, which is booming, and the lower economy, which is not. Guess which figures the government cites to the people? Recently, a new Wal-Mart opened up in Chicago and 25000 people waited in line to apply for 350 jobs, with low pay and no health benefits. That is not the sign of a booming economy, it is a sign of a desperate one.
We are now engaged in a class war, an unseen war, kept off the front pages of the newspaper, but going on nonetheless. The first volley was fired during the Reagan administration when the government broke PATCO, the air traffic controllers union.Since then, the propagandists in the corporate media, such as Rush Limpballs, have been pushing for tax cuts for the wealthy and an end to all the unions. A freeze on the minimum wage while eliminating the estate tax. And now, after the job market has been flooded with displaced workers, the high priests of expense accounts want to add more workers by allowing illegal immigrants worker status in this country.
But they fail to see the short-sightedness of this. Opening markets in third world countries won't help because the little they are paid doesn't cover the cost of privatized water, food and shelter, let alone a used car. And once a country's workers get, as put so eloquently by former Republican National Party Chair Betsy DeVos,"paid too much money", the company simply closes up shop and moves on to the next country. Meanwhile, our trade deficits keep growing as we have nothing made here to trade to alleviate any of that debt. That is, until we seize the world's oil supply, then we'll have a way out of this economic quagmire.