America! Is it too late?

“Should it really matter if some other country is richer and more militarily powerful? Who cares if some other country has economic supremacy as long as your country is prosperous and can manage its own internal affairs. For example the countries of Denmark, Sweden and Norway, each economically advanced, seem to have no qualms about who rules the world as long as they are left alone to be prosperous and peaceful, though their attitude might well change were whoever held the purse strings to start to curb their freedoms and encroach upon their way of life. But until that happens, whether the global financier is China, Russia or America seems, for them, largely irrelevant.” How the West Was Lost Dambisa Moyo

America is losing it and it will take drastic action for us to get back on course. Why has this happened?

  • We forgot, never learned, how to compete. 
  • Consumption 
  • We allowed our government to fail 
  • We put ourselves in too much debt and became over leveraged. 
  • We mortgaged the future. 
  • Education has taken a back seat and thus, so has our future.
Failing to Compete:  We were spoiled by the greatest generation. They won World War II and there was no competition standing after that horrific event. As a result we indeed did prosper;  however, we did not learn to compete globally because there was no one to compete against.

Consumption: We learned how to consume and became addicted to it. We consumed for the sake of consuming without paying attention to the economic progress that was being made by the rest of the world. Eventually we began to distribute our wealth to the rest of the world by our addiction to consumption.

Government Failure: Our Politicians, who in fact are us, also got intoxicated with consumption. They failed to look out for the general welfare of the Union. They have allowed the free markets’ power to create wealth and goods to be destroyed by oligopolies. Our representatives failed to create and enforce rules that would guarantee the freedom of “free markets”. Instead, these oligopolies have bought off our representatives as a result of their addiction to consumption.

Further the politicians bought off many voters by allowing the creation of expensive pension plans, both private and public, that are not totally funded. This shoe has yet to drop.

Over Leveraged:  We borrowed money from future generations and have no plans in place to pay them back. We have not used the money to invest; but rather, we used it it to feed our addition to consumption. The sub prime crisis brought it to a head, but the problem has existed for some time. The problem is further exasperated by the enormous amount of unfunded and hidden costs of future pension benefits that we are obligated to fund.

We are Squandering our Education System: When you have an addiction,  education is neglected. Our education system use to be the best in the world. We are slipping and parts of society do not look at dollars spent on education as an investment. Instead, it is looked at as something that limits our ability to consume even more.

To solve these problems, we must take drastic action; sooner rather than later. I don’t think we have the will to do it. Do You?

    Labor and Oligarchs

    In the 1960’s the auto industry was part of an oligopoly that included the UAW. Before imports, they could raise prices and pass on some of the profits to union workers in the form of higher wages. Now they longer can do that.

    Today more industries are controlled by oligarchs that do not include unions. These oligarchs are not buying off the unions because world competition does not allow it. If Apple raised its prices on their smart phones to pay their workers more they would lose business to Samsung in South Korea.

    By “crushing” oligopolies the consumer would have more choices because of competition and labor would have higher wages because there would be more companies seeking to hire good workers.

    The problem of competing against foreign labor would still exist, however it would be somewhat offset by technology, shipping costs, etc. It would also force shareholders at the domestic companies to put the squeeze on wages paid to their board members and senior executives in order to remain competitive.

    Today the “Captains of Industry” are paid egregious salaries to maintain the companies monopolistic position in their respective industry. After enforcing anti-trust laws they will once again be paid to deliver the products and services the consumer wants and to run an efficient operation.

    Oligarchs and Labor

    In the 1960’s the auto industry was part of an oligopoly that included the UAW. Before imports, they could raise prices and pass on some of the profits to union workers in the form of higher wages. Now they longer can do that.

    Today more industries are controlled by oligarchs that do not include unions. These oligarchs are not buying off the unions because world competition does not allow it. If Apple raised its prices on smart phones to pay their workers more they would lose business to Samsung in South Korea.

    By “crushing” oligopolies now, the consumer would have more choices because of competition and labor would have higher wages because there would be more companies seeking to hire good workers.

    The problem of competing against foreign labor would still exist, however it would be somewhat offset by technology, shipping costs, etc. It would also force shareholders at the domestic companies to put the squeeze on wages paid to their board members and senior executives in order to remain competitive.

    Today the “Captains of Industry” are paid egregious compensation to maintain the companies monopolistic position in their respective industry.  After enforcing anti-trust laws they will once again be paid to deliver the products and services the consumer wants and to run an efficient operation. The consumer will end up with better prices and service.

    Crony Capitalism Or Socialism

    If we want to stop our drift towards socialism, protect free markets from crony capitalism.

    There is a struggle going on between crony capitalism and socialism. Crony capitalism is a colloquial word for oligopoly. Control over industries in our economy is becoming more centralized everyday. As this happens power, both monetary and political, is becoming more centralized. Our markets are becoming less free and the economic playing field is skewed in favor of the oligarch.

    As this centralization of power and wealth is occurring, government can step in and try to “equalize” the playing field by either creating more social programs for the needy or better regulate industries so they are not dominated by crony capitalist. Since the depression of the 1930’s the government’s tendency has been to create more social programs.

    This country was founded on the principle that everyone is born with the right to life, liberty and the pursuit of happiness. Our forefathers decided the best economic model to reach these pursuits was capitalism. Free markets were chosen to best attain the nations economic objectives. Capitalism is here to serve society. Society is not here to serve capitalism.


    Early settlers were less concerned about government over-regulating markets then about devious suppliers trying to control markets. When a conservative today complains about the destruction of free markets he is condemning the government saying it is over-regulating the markets and not allowing them to operate effectively. The damage caused by regulations pales to the damage caused by markets taken over by oligopolies and oligarchs. This trend of blaming governments over regulating is increasing as the oligarchs gain political power through the Supreme Court’s decisions on Citizens United.

    If we want to slow down our drift towards socialism, we must protect free markets and capitalism by enforcing anti-trust laws. Oligopolies are prevalent in our economy today including, banking, financing, cell phones and others. This decision is not contrary to the ideal of cutting regulations where it makes sense. Below are the results of a study done in 2011 by Pew Research showing a trend indicating a slow shift in positive feelings towards socialism versus capitalism in our society.

    12-28-11 #2

    Foreign Corporations Buying Politicians

    “More than one in five of Britain’s largest corporations are channeling political donations to favored candidates ahead of next month’s elections in the US – though these sums may be only the tip of a new campaign-financing iceberg, according to leading politicians, judges and pro-transparency watchdogs….

    …As election year reaches its climax, America is forecast to experience the most extensively corporate-influenced race for the White House, and for control of Capitol Hill, in living memory.” How British Companies Pour Cash Into American Elections, The Guardian, October 6, 2012

    The above makes me feel alot better. I was beginning to think that American companies were starting to own our politicians. We can relax. Our Oligarchs have their hands full with competition from overseas.
    Per the same article sited above,

    The Guinness brewer made US donations of £400,000 last year, which it says “were all made, consistent with applicable laws, to federal and state candidates and committees in North America, where it is common practice to make political contributions”.

    I like the taste of Guinness. I like it even better now knowing they add to the corruption of the politicians running my country.