What Happens When Your Paycheck Comes from China

[Joanne98]

by Len Hart, The Existentialist Cowboy

In the 1930s, millions of Americans lost hope of getting a paycheck. Utterly disillusioned, Americans might have embraced full blown socialism. Now Americans may have no choice but to accede to the ownership of their country by China. Has there been another instance in history in which one nation has foreclosed upon another? Americans have two options: utter collapse or become slaves to your new Chinese landlords!

As the US emerged from the Great Depression, the 'right wing' was spooked as it often is and should be. The FBI considered 'It's a Wonderful Life' to be a subversive film because it "deliberately maligned the upper class" and demonstrated that "people who had money were mean and despicable characters". Aren't they?

Indeed, 'It's a Wonderful Life' was a subversive film. It threatened to subvert the lies and claptrap that is sold us by the Axis of Wall Street, K-Street and the GOP. 'It's a Wonderful Life' threatened to reveal the consequences of lies and perhaps worse the implications of truth about an entrenched establishment that is premised upon a pack of lies and propaganda. In the words of Albert Speer who should have known, the Third Reich was literally built upon 'meaningless platitudes'. The same is true of the US government, especially the fraudulent reigns of Ronald Reagan about which the right wing still lies. The truth about Reagan threatens the self-esteem of every stupid GOPPER and/or right wing knee-jerk who supported him and the Bush crime family.

A rational discussion of the Great Depression is still feared by the right wing because it will expose to the world the economic sand upon which is built their house of cards. The right wing and its willing culprits fear the implications of truth but cannot escape the consequences of their many lies.
The bad news in today’s jobs report is pervasive.
Private and government payrolls combined have shrunk for 14 straight months, and net job losses since the start of the recession total 4.4 million. (Private sector payrolls have shrunk by 4.6 million jobs over the same period.)

Job losses have averaged almost 650,000 a month over the last four months.
The official unemployment rate, which was 4.9 percent at the start of the recession in December 2007, reached 8.1 percent last month.
Other indicators show the breadth of labor market weakness. For example, the percentage of the population with a job (60.3 percent) has fallen to its lowest level since early 1986.
The Labor Department’s most comprehensive alternative unemployment rate measure — which includes people who want to work but are discouraged from looking and people working part time because they can’t find full-time jobs — stood at 14.8 percent in February, up 6.1 percentage points since the recession began and the highest level on record in data that go back to 1994.Well over one-fifth (23.1 percent) of the 12.5 million unemployed have not been able to find a job despite looking for 27 weeks or more. (Regular unemployment insurance benefits typically run out after 26 weeks.)
For the recovery law to stem the tide of job losses and lay the groundwork for a strong recovery as quickly and effectively as possible, federal, state, and local governments have to get programs up and running quickly. In particular, states must use the money that Congress provided to them as intended so that it will have maximum effectiveness as stimulus.

--CBPP Economic Recovery Watch: Statement on February Employment Report

Right wing cheerleaders for 'laissez-faire' economics must be chagrined by recent 'Marxist' bailouts of so-called 'free enterprise'. As economists conduct post-mortems on the ongoing crash and dive, economists read the 'bones' left in the wake of the earlier 'crisis', the stock market crash of 1929.
However, in 1963, Milton Friedman and Anna J. Schwartz transformed the debate about the Great Depression. That year saw the publication of their now-classic book, A Monetary History of the United States, 1867-1960. The Monetary History, the name by which the book is instantly recognized by any macro economist, examined in great detail the relationship between changes in the national money stock--whether determined by conscious policy or by more impersonal forces such as changes in the banking system--and changes in national income and prices.

--Ben S. Bernanke, The Federal Reserve Board, Money, Gold, and the Great Depression
What Bernanke fails to mention is that Friedman --despite his great reputation as a 'conservative' economist --leaned heavily upon the work of John Maynard Keynes in his analysis of the Great Depression. But, on the whole, he most certainly got it wrong.
Keynes seemed to be the right man for the time as he was reflecting the increasingly common view that blamed the capitalists themselves for the situation. In the General Theory Keynes rejected the view that the boom-bust cycle was due to over-expansive government monetary policy and that the stubbornness of the Depression was due to government interference with market mechanisms. He labeled all economists who believed such views as “classical”—in other words, hopelessly out of touch with reality. Instead, Keynes proposed a “general theory” that he thought capable of explaining not only the good times but also the bad.

According to Keynes, what drives the economy is aggregate demand or aggregate expenditures. Aggregate demand can be broken down into three main components: personal consumption (C), private investment (I), and government expenditures (G). The relationship can be summed up with this formula: AD = C + I + G. If Aggregate Demand is strong, the economy will be strong. However, if Aggregate Demand falters, businesses will end up with large unsold inventories and will cut back on production to avoid surpluses in the future. As they cut back they will of course need fewer inputs—including labor—and high unemployment will result.

The culprit in this story, the element that throws the entire system out of whack, is private investment. Private investment consists of business expenditures on machines, buildings, factories, and so on. In other words, investment is capital formation. Keynes claimed that private investment is inherently unstable due to what he called the “animal spirits” of businessmen/capitalists. He believed that businessmen are ultimately irrational and prone to herd-like behavior. Like sheep that blindly follow other sheep in the herd, it is easy for businessmen to become “irrationally exuberant”—as well as irrationally lethargic. Investment lethargy would trigger a large decrease in private investment, thus decreasing aggregate expenditures and triggering an economic downturn.

--Ivan Pongracic, Jr, The Great Depression According to Milton Friedman
In the motion picture 'It's a Wonderful Life', George Baily represents the 'private investment' part of the Keynes' equation. Had he jumped off the bridge, the picture of Bedford Falls as "Pottersville" might have come true. This is a picture of wealth benefiting the community. Potter, by contrast, represents the Axis of Wall Street/K-Street/GOP. This is wealth 'trickling up' by way of Reaganesque tax cuts that benefit only the ruling elite. Contrary to the lies with which this scheme is sold, this is wealth that finds its way to 'offshore' tax havens where it does not and cannot benefit the people of the United States by way of jobs or opportunities.


Here's how the model works. Unfair tax cuts are a windfall to rich elites. Despite the sales pitch, this 'windfall' is not re-invested in ways that will create new jobs or higher wages. The 'windfall' is instead invested offshore, in tax havens where it is forever lost to US consumers who might have used it to invest in better housing or in goods that are still manufactured in the US. Even if the consumer should decide to 'save' his windfall, the chances are good that his domestic 'bank' will sell his 'paper' to a larger institution and eventually offshore. Briefly, tax cuts benefiting only the nation's increasingly tiny elite are forever lost to domestic investment or domestic spending. These are dollars that are effectively removed from the economy. This is, in fact, a mechanism by which the supply of money contracts. Another word for it is 'depression'. All the official records, charts and data analyses prove that following every GOP tax cut is a recession/depression. Now you know why!

continued>>>
http://existentialistcowboy.blogspot.com/2009/03/what-happens-when-your-paycheck-comes.html

[Mika]

1. The dental prosthetics business is one such industry.

There is currently a tectonic shift in yet another health care/ manufacturing business in the USA. Its being shipped off to Chinese sweatshop dental labs.

Fifteen years ago there used to be 60 technical schools in the USA that taught dental technology courses for technical certification. Now there are 3.

The major trade and representational organizations, such as the National Assoc. of Dental Laboratories (NADL) and the National Board for Certification (NBC) are promoting this new offshore outsourcing business model. Even going so far as to be promoting the creation of some informal "inspection" system of the sweatshop labs in China. These organizations represent ownership - NOT labor.

Right now, tens of thousands of hard working, long term certified and dedicated US dental techs are out of work because of this trend.

The force behind this is the insurance industry - that is actively engaged in the push downward to lower wages.

A good US manufactured single unit dental crown was priced (the lab fee to the DDS) at about $100-$200, depending on quality of workmanship/materials, etc. A Chinese manufactured crown (of dubious quality and materials) costs between $20-$30 plus UPS shipping (What Can Brown™ Do For You?- ship yer job to China.).

Many lab owners are laying off their highly trained and tenured technicians and shipping their dentist account's work off to a Chinese lab, and then reselling it at a marked-up fee - making more money than employing technicians here at home to make the restorations. Some labs even have the chutzpah to stick a Made in the USA sticker on their shipping boxes to the DDS.

:mad: