Here’s Really the Biggest Problem in the American Economy – What nobody wants to say Part #2

A continuation of our earlier discussion in response to yet another attack on a free market economy.  In the first discussion, Here’s Really The Biggest Problem in the American Economy – What Nobody Wants to Say Part #1 we tackled the notion of redistribution.  In today’s post we will continue by discussing the impacts of globalization.

“One reason corporations are so profitable is that they don’t employ as many Americans as they used to”
-Henry Blodget, Business Insider

global map test

global map test (Photo credit: aleutia)

Demographics are changing.

I would estimate close to 25% of the people on my floor at work are “immigrants” representing almost every continent in the world.  Some might be first generation; many are work visa or green card holders.  A decade ago, there was a growing concern that all the science and engineering jobs were going to recent graduates from other countries who were getting degrees in sciences and math.  Well, here is a wakeup call – it is not just the science and engineering jobs anymore.  Or medical jobs.  My colleagues are all in “business administration” – marketing, accounting, finance, procurement, supply chain, and sales. Most of these positions are entry level; new hires.

I applaud these colleagues; it is inspiring actually and makes for a more robust, interesting workplace.  However, let me point out that all these are jobs that did not go overseas.  And they aren’t getting “underpaid” either.  These are all jobs that could be had here by any of us.  The inconvenient truth behind this is that the demographics of employment are changing.  High wages or job growth for unskilled labor is a thing of the past.  The global workplace is also a knowledge based workplace.  We need to stop blaming the laborer snapping a widget together in some overseas sweatshop for unemployment here.  Let’s stop spending time railing against the terrible white collar employees and managers, or college kids that earn technical, science, math or other challenging degrees and encourage children to choose a path of knowledge.  Stop the demonization of professional positions.  Slamming on “college kids” and education comes across as sour grapes – and the impact is more than just you.  The children are listening.

“Globalization” has opened up a vast pool of billions of workers who work for much less than Americans.  This, in turn, has resulted in companies shifting formerly middle-wage-paying jobs overseas.

-Henry Blodget, Business Insider

While more products are being made overseas and certainly there are jobs that have gone overseas as well, let be fair – globalization has brought much production and jobs here to the US as well.  Companies like Toyota, BASF, Nestle, BAE, Bayer and many others all have operations here in the US employing our citizens.  Let’s not try to blame globalization for the loss of “good” paying jobs.   And if we continue to vote for the candidate who simply tells us what we want to hear, we will still be sitting on our collective sofas lamenting the “loss” of employment and opportunities while the good jobs both here and overseas are populated by…well, everyone else.  Some of our politicians are trying to create an economy of a select few political overlords who know what is best for 300+ million dependent serfs with a victim mentality.

In the coming days I will continue to discuss:

  • Globalization
  • Technology
  • Stagnant wages
  • Business Profits

Let me know your thoughts.

The original post from Henry Blodgett of the Business Insider can be found by clicking here

Here’s Really the Biggest Problem in the American Economy – What nobody wants to say Part #1

Redistribution of Wealth

Redistribution of Wealth (Photo credit: nodigio)

Here’s The Biggest Problem In The American Economy

•Globalization
• Technology
• Stagnant wages
• Business Profits
• Tax laws

“These and other factors have contributed to the most radical redistribution of wealth that the United States has ever seen. Since the late 1970s, the country’s assets and income have moved steadily from “average” Americans to the richest Americans”

-Henry Blodget, Business Insider

Wow. That is a heck of a claim. Redistribution. Let’s take a look at what redistribution actually is. The term literally means distributing again – so in effect, taking something that has already been distributed, and distributing it differently a second time. Or more clearly stated, taking something from one group or individual and giving it to another group of individuals. I can’t fathom that anyone really wants to claim the wealthy have raided the accrued earnings and personal assets of the “average” Americans and given it to owners and senior management. It is one thing to say that the income gap between the wealthiest Americans and the average, median, or mean income of working Americans has increased since the 1970’s. That would be a claim that could possibly be substantiated or refuted through data. But that is not at all what he alleges. His claim is much more sinister – one group of individuals is intentional taking from another, without justification, and arbitrarily giving to another. A claim that is purely argumentative.

He then comes right out with it. In the next paragraph, carefully avoiding using terms like “redistribution”, he proposes spending our way to a more vibrant economy. If only the businesses of America would give up some of the wealth, everything would be fine. Unfortunately, these businesses are shortsighted by not just distributing this money to other people, like Henry Blodget no doubt, who would better know how to spend it. Spend, don’t cut costs, he opines. Ironically, much later in his post, he makes a recommendation (which I agree with, by the way) that American consumers need to save more and spend less! He never reconciles these two conflicting view points.

“The benefits of our free-market capitalist system … are accruing disproportionately to owners, managers and customers, at the expense of everyone else.”

Disproportionate according to what? Are we back to the “I just think you should share more” argument? And who will decide how much to share and who should get it? I suppose the government, unless Mr. Blodgett will be so bold as to offer up his services to fairly split that pie up. Notice also customers are also lumped into that mix of individuals that are taking advantage.

“It’s everyone else who is getting hosed”

So, the “average” American is not also a customer? Who then, are these “customers”, and how will we make sure they aren’t getting unfair benefits from the free market capitalist system? Will we perhaps charge them more, maybe in the form of a tax, because remember, we don’t want the owners to make too much profit. Then we could take the tax and give it to the consumers so they can buy more stuff, which is critical to the robust economy as Mr. Blodgett envisions. But then, if prices were higher, wouldn’t the “average” American need even more money to be able to afford to make purchases? And again, who will make this decision?
Do you agree with the notion that somehow companies and owners are unfairly taking income and assets away from the “average” American? Or is it an unfortunate, pandering, political claim that demonizes those that are successful and reinforces a victim mentality on the “average” American?
In the coming days I hope to cover:
• Globalization
• Technology
• Stagnant wages
• Business Profits
Let me know your thoughts.