ONE
THING LEADS TO ANOTHER.
THE
FALL OF THE SOVIET UNION OPENED UP COMMUNIST CHINA FOR CORPORATE
EXPANSION, WHICH ENDED UP ELIMINATING THE MIDDLE CLASS IN THE UNITED
STATES AND EVENTUALLY REDUCING IT TO A THIRD WORLD POWER (AFTER THE
UPCOMING CRASH). THE DEVELOPMENT OF THE INTERNET HELPED SPEED UP THE
TRANSFER OF PROFESSIONAL SERVICES AND GLOBALIZATION OF ALL TRADES AND
PROFESSIONS. INDUSTRIAL CAPITALISM HAS BEEN REPLACED BY FINANCIAL
CAPITALIZATION AND BANKS RULE GOVERNMENTS.
Thoughts expressed on the internet:
What
happened economically because of the collapse of the Soviet Union and
the rise of the high speed internet is that it made it possible for
Western corporations (corporations in the United States, Europe) to
arbitrage labor across national borders.
In
other words, when the Soviets collapsed, it had a big impact on
thinking in Communist China and Socialist India. Their response to
the failure of the Soviet Union was to open their vast, underutilized
labor to Western capital. So the corporations found out that they
could produce for their home market offshore in India or China,
dramatically drop the labor cost, and thereby dramatically increase
the profits flowing in capital gains to shareholders and in
performance bonuses to executives.
So
the collapse of the Soviet Union began the arbitrage of of labor, and
it ended up separating Americans from the production of the goods and
services that they consume. The economy has been dead in the water
ever since, and the Federal Reserve under Alan Greenspan tried to
substitute - for the missing growth in consumer income in employment
- consumer indebtedness. So we had the rise in consumer indebtedness,
the real estate bubble, the various financial frauds, and the ongoing
financial crisis as well as increasing unemployment.
The
manufacturing goods were produced offshore and sent in. What the
high speed internet allowed the corporations to do was to offshore
the production of professional services, such as software
engineering, information technology; and now, of course, research,
design. They could hire people in India to do this work, and they
could send it in on the high speed internet, and so we have seen the
employment for Americans in rapidly growing fields such as software
engineering and information technology simply dry up. The work is now
done offshore and sent in on the internet. So the consequence of
Soviet collapse was to destroy American manufacturing jobs, and to
destroy professional service jobs that had always been the ladder of
upward mobility for American university graduates.
"Don't
look for a job that can be outsourced by the internet." Even
radiologists are being outsourced.; so if you get an x-ray, they send
the results to India to have a radiologist in India do it instead of
an American doctor doing it.
It's
certainly the case that innovation follows manufacturing. If you're
not manufacturing things, you're out of touch, and you don't know
what to innovate, or how to innovate.
if
you're not making things, you don't know what to innovate. You get
out of touch with technologies. You become a Third World Country. We
now see from all the surveys that increasingly, American corporations
innovate outside the country where their offshore plants are.
So
if the American manufacturing worker costs $22 an hour (with all the
benefits, and so forth), and the Chinese at the time this started
cost 25c an hour, you have an amazing labor cost difference.
And so they look at this and they say: "Well, wow! We could
really drop our cost of production by producing with this Chinese
labor, because instead of twenty-five bucks an hour, it's twenty five
cents." That's what we mean by labor arbitrage. They just say,
"OK, we're not hiring these Americans, we're going to hire the
Chinese." That's labor arbitrage. The job offshoring was
undermining employment opportunities in the United States, and
certainly had stopped the rise in consumer income.
The
main function of globalism is to de-industrialize high-wage countries
that are developed.
The
other main result of globalism is to turn lesser developed countries
that had viable agriculture and were self-sustaining, to turn them
into monocultures; supplying like one crop for global markets, and
then that makes them -- first of all, that destroys the
economic-social systems there, and people now are dependent on food
imports. The big farms, of course, haven't room for much of the
population that used to be on sustainable farms. So globalism is a
wrecking force of amazing power to wreck. It doesn't do
anything good except for shareholders of big corporations and their
managers, or chief executives.
So
there's no longer - governments don't represent the people anymore.
In Europe, they represent the very powerful private banks, and
they're going to be sure they don't lose any money; so that
shareholders in the banks are being made whole by, in the case of
Cyprus, seizing some share of the bank deposits of depositors. And
what they did in Greece, they cut wages and salaries, they cut
pensions, they cut social services, they sold off public assets like
water companies to private companies, who then doubled the price, and
then that way the suppressed the living standards of the Greek people
in order to pay off bankers, so that the shareholders of the banks
didn't lose any money.
"The
Right is correct that government power is the problem, and the Left
is correct that private power is the problem. Therefore, whether
power is located within the government or private sectors cannot
reduce, constrain, or minimize power. " And you talked about how
the Founding Fathers had a solution, that it didn't work, and now
we've got accumulation of new dictatorial powers in the Executive
Branch in the name of protecting us from terrorists, and with
deregulation's creation of powerful corporations to big to fail.
the
two political parties. But they're not necessarily identified with
Right Wing and Left Wing. What happened to the Democrats was the
offshoring of the manufacturing jobs destroyed the power of the labor
unions and the ability to finance the Democratic party. See, the
Democrats were financed by labor, the Republicans were financed by
business, and so there was countervailing power. They could contain
one another. Neither side could go too far away from some sort of
balance. But when the unions lost all these manufacturing jobs, and
former cities which were powerhouses in manufacturing just dried up
and disappeared, the Democrats then had to go to the same sources of
financing as the Republicans. So now, both parties are dependent on
the same financing, and this then has made it easy for the
corporations to control both parties!
What's
happening though is that it's failing. It doesn't work for the
industrial countries, it works for China, who gets all the
offshored production, and so American GDP becomes Chinese GDP, and
American jobs become Chinese jobs, and American consumer income
becomes Chinese consumer income. What's happening is the balance of
power in the world is shifting completely away from the West. It's
washed up.
So,
the more trade agreements that Obama and any President signs, they're
basically accelerating the transition of power to China And India and
other former third World countries, but they're the rising countries
now - the BriC countries.
The
Chinese manufacturing force is 112 million. The American force is
Eleven million. Eleven!
Is
it possible if we could find and elect a leader who said "My
first step as the new President is to cancel these global trade
agreements." Would that be possible, if they were able to stand
up to all these different people?
It
can't happen for the reason that right now it serves the interest for
the power, so they're not going to overturn it. Now, when it becomes
apparent that we've destroyed ourselves, you can't get the power
back. You think the Chinese are going let you all of a sudden let you
overcome this? No. They'll hold the upper hand. They're not going to
say "OK, let's now destroy ourselves the way the Americans
destroyed themselves." I think it's all over with for the West.
I don't think they can come back, and so what we're going to be in is
a period of transition in which the West becomes no longer the ruler
of the universe. It will be slowly declining. In fact, the collapse
could be sudden.
The dollar is one of the biggest bubbles in history. The Federal
Reserve is creating over a trillion new dollars annually, but the
demand for dollars is not rising by a trillion annually. And so,
sooner or later, this has to affect the price of the dollar, that is,
the exchange value. And we already see the important nations moving
to decouple from the dollar.
We have the BriCs: this is China, Russia, Brazil, India, South
Africa. Altogether now, that's probably about half the world's
population. And it's probably half of the traded goods (laughs). And
so they're setting up a system in which they settle their trade with
one another in their own currencies. The dollar is no longer used as
a reserve currency. They're setting up their own version of an IMF.
They're just going to bypass all the Western institutions. We see in
China and Asia the rise of an Asian currency bloc, which is being
organized around the Chinese currency. We see deals with Japan and
China to settle their trade with one another in their own currencies.
So the demand and use for the dollar is about to rapidly
constrict. We'll have a situation where the Feds are not only
creating a trillion new dollars more than the demand is growing, but
the demand will be shrinking! And so the thing will blow up. And when
the dollar bubble pops, so does the bond market bubble, the stock
market bubble. We will have the biggest economic catastrophe in the
history of the world, and there is no solution. The United States
will go from being a so-called superpower to a nothing!
It could happen at any time. It's a perfect storm that the idiot
policy makers have created because they don't serve the public
interest, they serve a few rich bankers. The whole thing has been
keyed toward protecting the banks that our deregulation policy
allowed to get to big to fail. Not only that, but the public
officials, the Secretary of the Treasury, the FED, the financial
regulatory agency heads, they're all the former bankers themselves,
all their proteges. You have a situation where the class that caused
the crisis is running the solution, and the solution is to keep the
banks from having any pain; what it does to the rest of us is not
their concern.
Because the people running the policy
are not individual rich people: they are the very large financial
institutions. They may finance billionaires in some scheme a
billionaire has, but the power is Goldman Sachs, JP Morgan Chase,
Citibank, Bank of America. It's these financial institutions, they
have financialized the economy. Industrial Capitalism is over and
done with. We have Financial Capitalism, and what they do is, they
organize a whole economy so that all the surplus is drawn off in
interest paid to banks. You can see it happening in Greece, Spain,
Italy, Ireland, Cypress and spreading into other countries of the
world. One day, soon, it will happen in the United States.
Posts
