Going Broke: Veterans of a Post-American Economy

Last week: A late-model Qantas A380 jet engine disintegrates mid-air, with passengers lucky to have survived the ensuing in-flight trauma. This week: A two-year-old Carnival cruise ship is towed into a San Diego, California port after an engine crankcase spontaneously splits open, erupting in fire. Passengers in this case, too, were lucky that the worst they suffered was cold food, limited electrical power and non-operable toilets. And in what would have been shocking 10 years ago, news of contaminated meat, recalled produce and unsafe drugs are now so routine that most of us shrug it off.

In such situations, the finger-pointing tends to be brand, manufacturer or supplier-specific. Indeed, it is tempting to chalk up such news to a series of unfortunate flukes. But is that the best and brightest lesson we can draw — or does our mainstream news media tend to downplay or disregard the Big Picture?


This much is increasingly difficult to dispute: Globalization makes supply-chain accountability — and hence safe and quality products and workmanship — very, very difficult. In the 1980s and ’90s we were worried about knockoff Louis Vuitton handbags and high-end basketball shoes; now we hear about everything from fake pesticides to imitation aircraft parts!

These stories may seem unrelated at first glance, but upon closer examination the dots connect in an alarming manner. No, it’s not you. Quality assurance isn’t what it once was. It’s not just our appliances and electronics that seem to feel flimsier — virtually everything has fallen prey to the same process. And what, exactly, is that process? Increasing demand for increasingly scarce supplies.

Simply put, mineral resources and raw materials are stretched too thin by the all-inclusive goal of globalization. As we add more consumers to the world market, there is simply not enough to go around. Legitimate manufacturers, too, are under mounting pressure to cut costs, if not corners. It’s one thing, say, for a coffeemaker to break down in short order. True, high consumer product turnover rates, whether to breakage or obsolescence, place an added burden on landfills and a pinch to consumer pocketbooks — yet rarely do they pose a substantial safety hazard. It’s another thing entirely, however, when military-issued gear, cars, planes, ships, trains, food and medications come up short.

To pinpoint when the madness started, one need only take a backwards glance. In the name of spreading around the wealth of post-WWII America, all pretense of early to mid-20th Century protectionism were abandoned in favor of trade liberalization — what we’ve come to refer to as globalization. On the one hand, so commonplace is it for our possessions to bear far-away “made in” labels that many of us no longer question the facts of life as we know them. On the other hand, the sustainability movement has spawned the realization that it is less than energy-efficient or eco-friendly to transport food and products thousands of miles to market. Nevertheless underrated is the reality that our far-flung expansion and consumption practices increasingly exceed our ability to exercise good judgment. Protectionism — to look out for national interest at the potential expense of international cooperation — may not be the answer, yet globalization in its present form seemingly occupies the opposite end of the pendulum: another failing experiment.

Predictably so, luck is running out for cruise and airline passengers, our troops — even infants and pets! Risk is increasingly the norm. When will the onslaught of disturbing news stop?

If and only if we say “Enough is enough.”

Drawing the line as Americans and consumers requires the willingness, above all, to name the problem. This, in turn, requires us to identify what it is not. Firstly, globalization is not a partisan phenomena. Liberals and conservatives in the United States and Europe alike have, over the past 40-some years, climbed aboard the so-called prosperity wagon with alarmingly little discussion or dissent. Nor is globalization a respecter of values — human rights or otherwise. By 2012 it will be official: The capitalist U.S. economy is projected to play second fiddle to the socialist Chinese economy. No longer is intellectually or morally honest to accuse anyone and everyone who takes issue with globalization as anarchists or ethnocentrists, bent on abandoning Third World citizens to poverty. Similarly, to dismiss critics of international trading practices as alarmists at best or paranoid conspirators at worst, perpetuates the problem — not any semblance of a solution. Rather, what we Americans prefer to dismiss as the “lunatic fringe” are, in reality, in good company. Western European citizens, for instance, have rallied worldwide to protest the globalize-at-all-costs thrust of the G8/G20 meetings for over two decades now. This stands in stark contrast to your average American, who — confined by the fear of being labeled “anti-capitalist” and/or simply indifferent in the face of their own personal, if not short-lived gains — has largely ignored these larger-than-life economic trends.

We’re too smart to remain largely in the dark.

Ignoring an unsettling phenomena is one thing — foolhardy, perhaps, yet a personal prerogative just the same. Disputing the mounting evidence of globalization gone awry? Another thing entirely. Even now, it is tempting, understandably so, to believe this is just another passing recession. Proverbial wisdom holds that nothing will top the hardship of the Great Depression, whereas more education, innovation and effort on our parts will reinvigorate a healthy job market and a strong dollar.

Except it isn’t necessarily so.

In what was a strangely quiet but seminal mainstream media moment, economist Dong Tao of the financial firm Credit Suisse, in a CNN broadcast the morning of November 11, 2010, stated that the U.S. and China have entered an undeclared currency war:

The days for the U.S. to get the jobs of making shoes and socks (back) is long over. The U.S. salary needs to decrease by at least 80 percent before they become competitive. China should give its workers more salary increase(s) and that’s going to create domestic demand in China and that’s where the global rebalancing should be coming from.”

Forget the so-called Great Recession. Forget the off-the-beaten-path blogosphere. Forget the alternative media. You’ve heard it now from the mainstream media*. This isn’t a temporary economic downturn. It’s a restructuring of American life as we know and knew it. The days of American Empire, dollar dominance and a growing middle class are behind us.

Try surviving on “at least” 80 percent less salary. If Tao is correct, this isn’t about losing over-priced McMansions to foreclosure. It’s about multiple “middle class” families living in a single-family dwelling. Nor is it about settling for a brand new econo car instead of a luxury make. It’s about paying a premium just to ride a bus. And it isn’t merely a question of sending one’s kids to public schools instead of a private academy. It’s about more of America’s kids seeking work not to help pay their college tuition but to help pay their parent’s living expenses.

Tao’s statement does not imply an innocuous leveling the economic playing field. It depicts a case of trading places.

Unless we compel our policymakers of all political persuasions to think differently, they’ll continue to serve their well-connected economic allies — increasingly abroad and increasingly at our expense. What we have here is not trade liberalization per se. To advance a set of economic dogmas at the expense of American security and prosperity does not describe a 40+-year run of incompetence: It is, essentially, high treason. Is it more peaceful and profitable to cooperate as opposed to the nationalistic practice of cutthroat trade wars? Of course! But we’ve missed the mark if we think an eviscerated consumer class can serve as an engine — let alone the engine — of worldwide consumption and/or production. Should American and European standards of living slip to the point of irrelevancy, the much-espoused globalized ideal — cooperation — will have been proven a one-sided farce.

As we remember our veterans this Veteran’s Day, ask yourself: Is this what our soldiers had in mind — many of whom made the ultimate sacrifice on behalf of our freedom and prosperity? Perhaps it is time we re-imagine what it means to honor those who have served in our armed forces — if not rethink the diminishing opportunities our children and grandchildren are grappling with as a result of our preoccupation with all things partisan and/or trivial.

These hard times call for the willingness to confront all things great, global and game changing.

Connect the dots. Get involved. Vote. Think very hard about incurring debt for a house, an education or anything else. If you have a job with benefits, don’t walk away with the expectation that better prospects await. Consider taking in boarders or roommates to lower your expenses and save more — even if you think you are relatively secure. Don’t over-expose your life savings in the stock market, particularly if you are nearing retirement. Recent grads, in particular, should not bank on Social Security or pension plans. And most of all, speak up and speak out. It need not be inevitable, even now, that American wages shrink by 80+ percent in order to rebalance the world economy.

Make no mistake: Before we can help anyone else, we must help ourselves.

The only thing we have to fear is the steep price of our own indifference.



Amidst Criticism of Fed Action, President Obama Urges G20 Leaders to Get Behind Plan for US Economic Growth | ABC News

G20 Struggles to Cool Currency Tensions |Reuters

Dollar News | NYT

* Tao’s alarming quote is omitted from this CNN transcript. Fortunately, the interview has been archived by LexisNexis News here.

One thought on “Going Broke: Veterans of a Post-American Economy

  1. Earth is finite, it doesn’t mean necessarily that we’re running out of resources. If you have energy, you can produce pretty much whatever you need. We currently rely on primitive sources of energy, oil and coal, we’ve got more than enough of these to keep the world funtioning for hundreds of years more. New sources of energy are almost completely untapped. The solar energy of the Sahara desert alone could easily provide the world’s energy needs many times over. I agree that being efficient is something we should all strive for, bringing in boarders and such, but its not necessary.

    The best way for Americans to help themselves is through helping our brothers and sisters across the world who are being exploited by corporations- most of them spawned from the US.

    Want to keep your extra 80%? Make sure workers in other countries get theirs as well. Naturally we can’t compete with slave labourers in China, so lets free them from slavery. There is more than enough energy to go around.

    No, what we’re seeing is an elite doing whatever it can to solidify its status. The rich are ever working on getting richer. The biggest threat to power is a middle class with the leisure time to become educated and politically involved, so that middle class is being abolished. But its all by design, there is no shortage of energy.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.