Web Letters | The Nation

China gets it!

"China OK With Strikes" was the title of an article from AP in the business section of the local paper. (Its available on the web under that title.) The government had previously come down hard on strikers, because foreign investors might not like it. However, now they do not oppose the strikes. "That's because it views the strikes less as a political threat these days than an economic tool—a way to help restructure China's current export-driven economy to a more self-sustaining one, driven by ordinary people with more cash to spend."

Seventy percent of the American market was supported by the wages of ordinary people, and not the money markets. Over 60 percent of the formerly developed Western economies were also support by the wages of ordinary people and not the money markets. These are facts and no economic theories are involved. The Chinese are beginning to get it, but the G8 or G20 in Canada are arguing against deficit spending that supports job growth, and cutting the deficit by attacking jobs, along with the wages that really support the economy. Let's see, the financial markets crashed the world's economy, but let's compound their work by trashing the sector of the economy that supports it. We also need to get out of the way of BP and the other oil companies so that they can trash the ocean, destroying the environment, and a major source of food for most countries in the world.

What China is doing in constructing an independent national economy is what Alexander Hamilton's tariff policy did to invent a national, independent economy. However, the jobs issue supporting tariffs would be brought up in William McKinley's arguments for tariffs in the late nineteenth century.

If China continues to concentrate on internal development, it's economy is going through the roof. As for the West, Europe will collapse first, followed by the United States, satisfying the financial markets by cutting deficits and jobs.

Recession

By killing the economy with his disastrous stimulus of government jobs, Obama has followed your advice already. The real economy needs lower government spending and less government intrusion (fewer government services) in order to create real jobs.

"Alternate reality," or smoke and mirrors?

I really liked the term "alternate reality." Alternate Reality is a propaganda device designed to shape public opinion for the benefit of special interests. Wall Street, and its economists, like to cherry-pick statistics, and present them as facts.

I watch Quest Means Business on CNNI. While it is largely an hour or less of cherry-picked economic statistics and personalities supporting neoliberal economics, a lone real statistic appears, blowing away a whole week of smoke and mirrors posing as reality. Most of the past week was devoted to the rise in consumer confidence and defending BP by turning it into an international disagreement between the US and British governments. BP is being picked on because it is perceived as a British company. Since my first girlfriends were British, I have positive feelings about that country. However, as a former resident of Mobile, (and my first beach experiences were at Gulf Shores), I agree that BP has to held accountable for the mess they created. Forget the false flags and pay up!

As to consumer confidence rising, retail sales tanked in May! The bad news always comes on Friday! You just have to buy stocks during the week, and you will feel good until Friday!

Does anyone remember Ross Perot's refrain, about the sucking sounds of industries and jobs going South without tariffs? Well, he was partially right! Industries and jobs did go South, but agribusinesses also went South for cheap labor. Of course, they didn't all go South! Some of them went to China, India, and in all directions in search of cheap labor. Trains from the Port of Los Angeles run east through Riverside carrying Chinese and other goods, that used to be made in America.

I don't blame the Chinese for being protectionists. They should concentrate on internal development, and with increased wages their consumer based market will continue to grow. I blame our own stupid leadership in both parties, who went for "free trade" and outsourced jobs, industries, agriculture. Without tariffs, along with a jobs program that recreates and supports our traditional consumer-driven economy, there is no long-term recovery

Individual enterprises

Just as no one in the pantheon of expert economists and policy-makers is proffering asset-based interventions, in place of the plethora of liabilities-based ones, to address the private and sovereign debt crisis in America, no one can see the millions of "individual enterprises" currently proscribed by foolish municipal statutes and regulations throughout the land.

"Individual enterprise" is a humane appellation for direct seller, street vendor or peddler. Which are, despite towering misapprehensions, fundamentally wholesome, lucrative professions, and essential now, to catalyze the American labor market and Main Street economy; capitalism in its purest form.

Individual enterprises can generate income equal to or exceeding professional and skilled worker wages, in fewer hours, and without any education or training requirements. In short, a peddler unecumbered by the police, the harassment of store associations and snarky snobbism, can earn $2,000+ in ten to twenty hours per week.

Dr. Howard Karlitz provides a perfect example in his autobiographical case study, "Confessions of a New York City Street Peddler," a telling, account of Individual Enterprises in a hostile environment.

Historical precedents are equally abundant.

“Several significant American Jewish families—the Gratzes of Kentucky, the Strauses of Georgia and New York, the Bambergers and Blooms of Louisville, the Fels’s of Philadelphia—got their start as peddlers. These former peddlers revolutionized the way Americans purchased consumer goods. From such modest beginnings has the great American consumer culture been built.”

“Meyer Guggenheim, who later made a great fortune in copper and silver mining, proudly recalled that he started his career with a pack on his back, going from farm to farm trying to convince the mistress of the house to purchase shoe laces, needles, spices or ribbons.” —Humble Roots of American Retailing, American Jewish Historical Society

We should universalize vendor/peddler registration and licensing, allow any US citizen and legal alien to establish “individual enterprises.’ Expedite registration time; eliminate license lotteries, and veteran preference restrictions. In addition, reduce percentage of income taxes; offset this reduction with a Value Added Tax (VAT), thereby capturing tax revenues from the surge in consumption.

The creation of 12.5 million "individual enterprises," averaging 250,000 per state, will catalyze the US labor market and Main Street economy. "Individual enterprises" whose income rivals or exceeds professional and skilled worker wages can promote a new frontier of quality employment. A consequent swell in the consumption of goods and services will induce a second major employment increase (millions) in traditional job markets. Even as a newly expanded labor market fosters sharp, upward-mobility shifts, to “full” employment. The transformation is complete with a surge in VAT and Income Tax revenue. The cost to catalyze the US labor market and Main Street economy is nil to nominal, and should satisfy deficit hawks and Keynesians alike.