I'm not usually one to rant, but after listening to the news for the past several weeks, I have decided that we're all focused on the wrong things in trying to get this economy back up and running.
Everyone in Washington wants to blame everyone else. Nobody wants to take a hard stance and put their money where their mouth is. They are all too busy trying to get elected or re-elected to tell the truth and we've been lulled into silence for so long that I think most of us don't really even care anymore. We just want to see the problems fixed and no one - not the (so called) "best and brightest" of the political or economic minds in this country -- has come up with a real solution.
The Republicans want to say the Democrats are at fault; the Democrats say the Republicans are at fault; the Tea Party folks and other independent groups say everyone else is at fault. But, in reality, it doesn't make any difference who is in power in Washington because they are all talking to the same economists and they are all basically coming to the same conclusions and saying the same things in different ways.
So just for a minute - let's suspend belief and declare that the problems with the economy are not being driven by either political party. The economy is not a political problem - it's an economic problem and it's a pretty basic problem.
We have become a nation of consumers and we are no longer a nation of producers. China is a nation of producers. Korea is a nation of producers. India is a nation of producers. Thailand is a nation of producers. But, we are a nation of consumers.
That doesn't sound bad until you begin to think about it. For those of you who are sales folks, you'll get my drift immediately.
If we're not producing products made in the US, then we're not selling, which means we're not making money. If we're not making money, then it means we can't create jobs, and if we can't create jobs, we don't have money to spend, and if we don't have money to spend, we can't fuel the economy.
Yes, we sell lots of 'stuff' in this country - but most of it is made elsewhere and what's made here is so expensive that only a few can really afford to buy "all American." We were perfectly happy to let our industries and manufacturing move offshore because we were smart.
Our kids were going to college, we're going to sell our "smarts" and the service economy we now live in was born. But let's face it, while we sell a lot of 'services' in the US, it does not compare to what we spend on products produced elsewhere that could be made here, and which would create jobs so desperately needed.
One of the flaws in all this is what happens to those kids who aren't college material? What happens to all those MBAs who can't find jobs using all those brains they paid hundreds of thousands of dollars to expand?
This is exactly what we're experiencing right now - in addition to all the unskilled or semi-skilled laborers who are out of jobs and have been, there are now plenty of 'smart, highly-skilled' college graduates who are now part of the unemployed rank and file.
Fuel for the Economy
For those of you who attended the Your Financial Destiny day-long seminar in March, you'll remember Dr. Robert Murphy talking about how manufacturing and labor-intense industries fuel our economy. They put people to work and allow for an economy to expand. Just look at China, India, Thailand and Korea - they took on all our manufacturing 20+ years ago and their economies expanded. As the US and Western Europe have become more and more 'service economies' the tougher things have gotten.
We can continue to be consumers, but frankly, being a country where consumerism is billed as our saving grace has just about bankrupted us.
Right now, that's what's going on in Washington - they are playing the consumerism way and trying to spend their way out of debt and encouraging us to continue spending as a way to get the country out of its economic slump. How many of you have tried that and been successful at getting out of debt?
The Problem Is ...
The problem in Washington is not political. The problem in Washington is flawed economic thinking. You cannot spend your way out debt, and you can not stimulate the economy by creating more debt, unless the debt you are creating is creating jobs and as far as I can see it is not.
If we can get to the point where we are increasing our production of hard products and selling those products in the world market place and buying more US-made products here, our economy will be a lot better off and so will all of us.
However, the issue remains: how to create this type of market again, now that we have worked for decades to eliminate it and take it off shore to other countries?
At what point are the folks in Washington, as well as the American people going to get it? You can only be a consumer if you have something to produce and sell, and right now, that's not the US. When was the last time you bought something made in America, by a company that was owned by Americans and it didn't cost you an arm and a leg?
Please note, I am not saying we should stop buying goods and services from other countries, but we must create a better balance to what we are producing and selling to ourselves and the rest of the world. We need to stop giving our resources away, i.e. selling them cheaply, and then paying a great deal more to buy back the finished goods.
They say history repeats itself, and those who fail to learn from history are doomed to repeat the same mistakes. For some reason, our current economic picture reminds me of the Romans, and you know what happened to Rome while Nero was fiddling.
-- The Editor
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