Column for 12 April, 2008
“Would your wealth or even all your mighty efforts sustain you so you would not be in distress?”
In the midst of all the extensive and vitally important media coverage of Barack Obama’s bowling score, Hillary Clinton’s courage under (imaginary) sniper fire and John McCain’s inability to remember even the most basic facts about the Middle East, there’s one thing you don’t hear about: the economy. True, you hear about the bursting of the housing bubble and arguments about whether or not we are in a recession (a “recession” is when my next-door neighbor loses his job; a “depression” is when I lose mine). And we have heard about the Bush Administration’s generous decision to drive the nation even further into a crippling debt of their own creation with a pittance of a tax rebate; in fact, the best line I heard on that issue was that if you spend your rebate in Wal-Mart, it will go to China; if you spend it buying a computer, it will go to Japan; and if you spend it on gas it will go to Saudi Arabia. Therefore, the only way to spend it on America would be to use it for beer, prostitutes or gambling at an Indian casino, the only businesses left in this country. No, the thing you don’t hear is that, slowly but steadily, the American economy is being dismantled from the inside out. Do a little experiment with me. Look around where you’re sitting at this exact moment and see if you can lay your hands on anything, anything at all, that was made in America. Go on. Give it a try. Give up? Closest thing I could find was a metal yardstick made in Ohio and out in the driveway, my truck made by union autoworkers in St. Louis. The fact is we are very rapidly approaching the point where nothing is “made in America.” Consider this: in 1950, 34% of American jobs were in the manufacturing sector and 59% were in the service sector. By 2002, only 13% remained in manufacturing while a whopping 82% were in services. The number of Americans working in business services (advertising, data processing, credit reporting, etc.) has risen from 656,000 in 1960 to 9,301,000 by 2002. American steel exports in 1969 were valued at $70.9 billion, representing 2.1% of total GDP. By 1998, it was down to $37.6 billion and a mere 0.4% of GDP. Just since January of 2005, when the US abolished quotas on textiles, the textile industry has lost 83,700 jobs, some 20.9% of its total. But that’s okay, right? Free trade and globalization advocates, including Bill Clinton and most of the Republicans, have assured us that these “old economy” jobs would be replaced by new, better and shinier “new economy” jobs in the “information sector.” Actually, you don’t hear nearly as much about the “information economy” since the dotcom bubble imploded. And while it is true that the overall unemployment rate remains relatively low, those high-paying “old economy” jobs where people actually made things, are being replaced by crappier, lower wage jobs. In terms of real wages (that is, adjusted for inflation), the average American has gone from making $302.52 per week in 1964 to $277.57 per week in 2004, and that’s after a brief period of rising wages in the mid to late 1990’s. Now consider this: the US trade deficit (the difference between what we export and what we import) hit a record high of $763.6 billion in 2006. And that national debt I mentioned? All $8.5 TRILLION of it? Every single dime accumulated under George W. Bush’s watch? Fully 25% of that is owned by foreign governments. So, can you still be an economic superpower if you don’t make anything and an increasing share of your of GDP consists of debt owned by other countries? What happens if those countries decide they don’t like us anymore? Remember the oil embargo of the 1970’s? Arab countries who sit on top of much of the world’s oil reserves got angry with America for refusing to allow them to eradicate the State of Israel, so they stopped selling to us. The US economy was hit hard as the price of gasoline skyrocketed and the government was forced to impose price controls and rationing. And we are much more dependent on the goodwill of other countries now than we were then. Worse yet, there are some signs we are approaching Peak Oil, the point at which the world hits maximum oil production (aided by the increasing demands of emerging economies like China and India). If that happens, gas prices won’t come down. Ever. Now, I don’t mean to suggest that American corporations are always worthy of protectionist trade policies; they aren’t. In particular, it’s hard to feel sorry for the automotive industry which grew fat, happy and lazy until it was eclipsed by better built, cheaper and more fuel efficient foreign models. However, the cries of the free trade warriors that free trade and globalization are inevitable and always good for America are starting to sound more and more like old communist propaganda about the triumph of Marxism and about as grounded in reality. Why is it that none of the major presidential candidates, now that John Edwards is out, will talk about this? Other than a few very mild tut-tuts about NAFTA from Clinton and Obama, and only then in states like Ohio and Pennsylvania that have suffered the most, the silence is deafening. If free trade and globalization are so great, why won’t any of the politicians even discuss them? How is the United States helped by lowering trade barriers that give us the choice between dismantling our environmental and worker protections or losing out to countries that don’t have them? Can we really retain our sovereignty if the only jobs available to our people are delivering pizzas and repairing computers made in China? Historically speaking, there is a name for countries that don’t make anything and whose economic fate is almost completely in the hands of others: a colony.