America's Globalized Economy

I will preface this post with a quote by Ross Perot back in 1993 during a debate with Al Gore, when he stated that America was "in a race to the bottom". Looking back, it is remarkable just how true his statement has become.

The pundits today talk about the economy in mostly glowing terms. The economy is strong, inflation is low, housing will bounce back in some future date which is always revised, unemployment is low, etc. Never reality, just the rosy projections that have no base in the economic world we actually live in.

The economy of the United States is, in fact, becoming more and more globalized each year. This, in turn, leads to the globalization of assets and wealth. As the value of labor decreases due to competition with cheap foreign labor, the assets held by American workers falls in direct relation to their declining wage. Let's study this for a moment.

Greg, a manufacturing employee had a job paying $55.000 but his company decided to outsource and he was laid off. He was then forced to take a similar job but now makes only about $25,000 a year. What is he to do? How can he afford to pay for the assets that he has, such as his home or debt that he has incurred? The truth is, he can't do it. No amount of cheap foreign goods, low paying jobs or the much vaunted tax cuts for the rich will restore his former standard of living.

So what is really happening? The American worker is seeing a decline in their standard of living and this will not be ending in the near future. In time, their descending worth, both of wages and assets, will meet with the rising worth of the global labor force. What a glorious day when the American worker can proudly stand by his Chinese counterpart and discuss how globalization had somehow managed to make them both equally poor while their respective companies have doubled in size and wealth.

Adding to these woes deregulation and privatization have resulted in the rising costs of good and services even while the value of wages and assets decline. It has not helped that the Treasury Department has become addicted to printing money primarily to finance the Iraq adventure (occupation). This little adventure will soon reach the unbelievable 1 trillion dollar mark! And this from the President that just today talked about being fiscally responsible with the "people's money". Go figure...

The standard of living of many Americans has experienced the steepest decline in over a half century. Foreclosures, bankruptcies and personal debt are at all time highs. Meanwhile, wages and assets (i.e. property values) continue their downward spiral.

Ask yourself, was globalization good for you? How have you benefited? What about 'free trade' and all of those benefits? Does the American trade deficit even matter to you? Do you care? It can be seen that after years of this so-called 'globalization', which is nothing more than a redistribution (on a global scale) of wealth, the few at the top are cashing in while the rest of us are left picking up the ever-decreasing crumbs.