Cheapening labor is the very basis of the far right's political strategy. This is at the core of all of their war mongering, theocratic demigoguery, destruction of basic freedoms formerly taken for granted, and rending of the social safety net. The reduction of wages and salaries of those below the median annual income is at the core of the expansion of incomes at the very top, unprecedented corporate profit rates, the bloating of the financial markets, and the unprecedented rallying of the stock market and its high volume of trades. All this is supported by slave labor not only abroad but here at home.

It is true that an increasing amount of big corporate profit is gleaned abroad as was shown by the recent tax scandles involving big pharma and the failure of any of the big drug companies to pay even close to the 35% rate on global profits as agreed to back in 2001 as part of a profits repatriation deal(the worst offender was Pfizer paying only 2% on over $13 billion in global profits while Merke paid the highest at 19%). But the ability of big corporations to offshore production has depressed wages and destroyed union bargaining power. The strongest unions such as UAW are taking 50% pay cuts in order to keep jobs in the US as evidenced by the recent Delphi workers contract settlement with GM for a wage reduction from over $27/hr. to about $14/hr. Meanwhile Walmart, with its offshoring of suppliers for the last twenty years to China have put downward pressure on the wages of UFCW workers in various grocery chains nationwide whereever Walmart opens their SuperCenters. The general effect of all of this activity has lowered overall demand in the US economy. It has driven a business model based on cheap domestic labor affording only cheap imports and a globalization of the basis of corporate profit rather than predicating it on the strength of middle class incomes and effective domestic demand.

One of the misconceptions about all of this is that durable goods manufacturing has permanently left the US and that the total value of US based manufacturing production is a small fraction of what is once was never to return. This is actually false. In 2006, over $4.5 trillion in manufactured goods were produced in the US almost half of it by US subsidiaries of foreign firms like Japanese auto makers. The point is that durable goods manufacturing in the US is cheaper and "leaner" using fewer workers, more advanced technology and averaging much higher output per worker than previously. Today, wages are about 11% of the total overhead costs of domestic US manufacturing. A much greater share of the profits of this industry are accruing to capital despite the fact that average manufacturing wages are well above the national median.

Globalization isn't just about restructuring the economic division of labor to concentrate production where labor is cheapest. It is all about cheapening labor everywhere in the process. Offshoring is only a part of that process and not the whole process itself. Only a globally linked workers' and social justice movement can defeat the crushing of labor that has occured over the past three decades. This is basically a political task.

[« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]

BUSH ECONOVOMITS

JOBS
NET NEW JOBS PER MONTH

Clinton—237,000
Carter----218,000
Reagan---175,000
Bush II----70,000 (He brags on this-wow)

TOTAL STOCK MARKET GROWTH
PERCENT INCREASE PER YEAR

Clinton---41%
Bush I----21
Reagan---17
Carter------5
Bush II-----4 ( he calls this Zoom?)

How? Yes, much money has been made as the stocks climbed out of deep hole.
Example—Cisco zoomed from $75 to $15. Deep hole. Then, over six years it zoomed to $35.
S& P just recently reached it’s 2000 Level.
One-Half the Dow thousands just go back to 2000 level. Not Dow 30.
HOME COSTS

Average annual income to buy an average priced home
2000-3.2 years----2006—5.4 years
An increase of 68% over six years.
The next noise you hear will be Foreclosure Boom
INFLATION

Ignore gasoline—home prices—education prices—heath care prices
Everything is beautiful if you can control the numbers.

MONEY SUPPLY

M-3
Increase in each decade
1970—1207 Billion
1980---2266
1990---2612
2000---3693 (6 years)

Increase per year for each decade
1970—120
1980---226
1990---261
2000---615 (6 years) will hit 800?
Life is grand when Chairman and all Federal Reserve Officials are “Conservative” Republicans

Ok! So the Europeans can buy our goods now—
In 2000 it took $.83 to buy a Euro. Now it takes $1.37
3 course-set meal-lunch-London-$61.50--Nyc-$45
Four Seasons room--London-$1,000--Nyc-$465.

DEBT—

1980—Less than 1000 Billion (after 200 years)
1990---4,000 (12 years of Conservative Republicanism)
2000---5700
2007--- 8881 (7-10-07) wow! More Spend and Borrow let Kids Pay Tomorrow Conservatism

SPENDING

Clinton last budget 1.84 Trillion. Bush up to 2.9 with one budget to go.
Reagan increased Total Sending by 80%. Bush may tie LBJ at 60%.
Note how Heritage-AEI and all Conservatives count only one-half of the budget as their presidents responsibility. Watch them on Revenues. They will cheat. They will use correlations where there is no connection.
SAVINGS

Total National Savings has gone negative for first time since Conservative Big Crash

PROFITS

Corporate profits at all time high
Buy overseas at $.50 cent per hour labor and sell to suckers as tho $10 per hour labor
Keep minimum wage as low as possible.
Use two part time instead one full time
Do not pay Insurance.
Maximize Profits like good Christians.
Ever hear of optimizing profits?
Buy Washington. It is cheap.

INTEREST RATES

Republican Federal Reserve let Clinton end with a 6.5 % rate then few months later gave Bush a 1% rate. If this Federal Reserve is non-partisan I will shoot a 61 tomorrow.
Greenspan gave Clinton 13 significant rate hikes during campaign years.
Everything is beautiful if you are Mega-Rich.

Clarence Swinney
Political Research Historian since 1991 on Reagan-Clinton-Bush II administrations
Burlington nc
cwswinney@netzero.net

[« Reply to this comment] [Post a new comment »] [Rate this comment: 1 - 2 - 3 - 4 - 5]