What We Have to Do to Halt Our Economic Collapse

by ursavoice

(Continued from “Occupying America” in Volume II, Issue 2)

Jeff Klein

J.D. Candidate 2013, UCI Law

For Moderate Independent Law Society


    The economic philosophy that still governs says do what is good for businesses (i.e., expand free trade) and the jobs will come. We know better. Take Warner Bros. as an example. Warner recently had record profits. According to the Reaganism that both parties subscribe to, this was the goal—these corporate profits will lead to jobs.

    Wrong. Not only did Warner not add jobs, it laid off 500 high-tech workers in California. And these were not low-end customer service tech jobs. These were, as one Warner employee told me, the jobs people like him aspired to.

     Well why did that happen? Why the layoffs at a time of record profits? The answer to this question is the answer to why America is in economic collapse, why there is no chance of recovery, and what needs to be changed to address the economic issues America faces.

     Why did Warner layoff 500 Americans in a year in which it had record profit? Because they could send those jobs to Bangalore, India. Don’t know Bangalore? It is one of a number of new tech cities built by Western companies. Yes, Microsoft, Google, Warner Bros., and others have created tech cities in India. Why? Because they can hire six people for the price of one American. So, even though Warner had record profits, eliminating 500 high-paying American jobs was a no-brainer. Warner can hire people for 1/6th the salary in Bangalore, and so the CEO will be able to beat last year by some millions, and thus get his/her bonus.

      Which, of course, is the goal of corporate executives; CEOs do not exist to create jobs. This is the central, obvious flaw in all of Conservative Economics. Our economic philosophy is all premised on the fiction that CEOs/companies exist to create jobs. The reality of course is the opposite. Their goal is to hire as few people as possible, pay them as little as possible, while charging as much as possible. Yes, shocker, CEOs exist to make profit for their companies and bonuses for themselves, not to kindly hand extra profits out as jobs to Americans.

     Thanks to free trade and outsourcing, it is guaranteed that nothing can help the American economy. No matter how well companies do, most of the jobs created will be created overseas. 

     You cannot find a job because it has gone overseas; you cannot start a business because the Big Boxes (Wal-Mart, Home Depot, Amazon, see Part 1 of this article in Voice’s previous issue) make it so you cannot compete. 

     It is important to note that all of the changes I discuss in Part 1 of this article are new to the American experience. The idea that we are in a “recession,” and that the economy will go back to “normal” sometime soon has no basis in reality. America has never functioned economically under free trade, Wal-Marting, and outsourcing. In reality, this is normal if you allow these policies to exist. There is no “recovery” on the horizon. These changes have created a new reality. If we want to change it (i.e., something other than 1% having all of the money), we need to go back to the policy regime we existed under when money was better distributed and jobs did not fly overseas like birds during a season change.

     There are many angry people Occupying Wall Street, Los Angeles, and other places (though they are now being carted away by police as I write this). Good people, who are taking the stand their nation has needed for a generation. Of course, the powers that be will fight back and, if possible, shove such movements back into passive silence, as the handful up top continue to stuff their pockets.

    If we want to actually fix the problem, these are the issues that need to be addressed:  Free trade must be reversed. The oligopolistic Big Boxes must be dealt with the way we’ve dealt with monopolies/oligopolies in the past. In short, someone has to look out for Main Street and for the American workforce. 

     No more nonsense about no one knowing what the problems are or what the solution is. The mobs are starting to grow—and grow restless. We must undo the Reaganism-led disaster before all-out collapse is upon the nation, and bring back Ford-rule, demand-side economics.