If the headline-grabbing Occupy Wall Street movement proves anything, it is that Americans are gravely concerned about the state of our union.
Just as the Tea Party was regarded with suspicion in their initial rallies to reduce government bloat, throngs of leaderless Occupy Wall Street protesters have been derided for their all-over-the-map set of gripes: Wall Street traders who have funneled investors’ money not into the real economy but speculative gambles that have led to questionable lending practices, volatile commodities pricing and taxpayer bailouts; a higher education system that has become a financial albatross to indebted students; legislative favors aimed at Big Business, and widespread unemployment even among the young and the educated.
Arguably, Occupy Wall Street is to Big Business and Banks what the Tea Party is to Big Government and Waste — two sides of the same coin. Both groups — which for the purpose of this discussion are defined as principled participants not to be confused with their salacious or lawless detractors — grasp a large chunk of the problem.
To cure what ails us, Americans must reach for broader and more inclusive views and bigger and bolder solutions.
SUSTAINABLE SOLUTIONS
To put our Humpty Dumpty economy back together again we need to address these key areas:
1) REFORM THE LAW. Several decades ago the Supreme Court designated corporations as “people”. Corporate entities have since emerged as larger-than-life collectives with deep pockets and larger megaphones than the rest of us. Effectively speaking, the Court’s decision codified into rights conflicts of interest (the cancer of corruption). The all-too-foreseeable outcome is that transnational corporations wield government-size influence.
The public debate would achieve a paradigm shift were those who advocate for limited government to perceive a similar overreach of transnational corporations: too much control concentrated in the hands of too few (and vice versa).
The reality is this: There is a proportional relationship between the growth of government and the growth of corporate dominance. Big Government is funded by Big Lobby. It’s no secret that elected officials who achieve lobbyists’ objectives often receive lucrative private-sector job offers upon completion of their term. Take Sen. Phil Gramm and his wife, Wendy, chief architects of the deregulation of the energy industry (think Enron), the commodities market (the food crisis) and the financial services sector (precipitating the taxpayer-funded bank bailouts). Sen. Gramm and his wife are but two examples of public servants profiteering from the corporate hands that feed them. This suggests that term limits could just as easily speed up the revolving door between public service and the private sector. Nothing will change until Americans believe it is personally up to them to pay attention — specifically, to the voting record of our representatives and to what type of industry these individuals hail from or transition into after their term ends.
In three words: Follow the money.
To remedy the power imbalance we must A) rally for campaign finance reform, B) change the incentives surrounding the Supreme Court decision to grant individual rights to multinational entities. [Example: If your corporate headquarters relocates outside of the US you forfeit the “right” to donate to US political campaigns and/or fund US lobbying firms associated with your industry.], and C) enforce antitrust laws: break down banking and business monopolies into less concentrated — and henceforth more competitive — chunks. The bonus? With more players in a given industry we are likely to see a resurgence of job growth. Antitrust law enforcement is not for the purpose of punishing market players for their success, rather to extend the American Dream — middle-class self reliance — to a greater percentage of the population so that fewer disenfranchised Americans look to taxpayers for sustenance, and less incentive exists for voters to endorse “socialist” solutions.
To advocate for small business is inherently Capitalist, whereas to advocate for multinational banks and corporations, to the extent they have become “too big to fail”, is to enable government excess: the privatization of profits and the socialization of risk.
2) EDUCATE AMERICA. The correlation is undeniable: we know that a more competitive workforce is a more educated workforce. But what does “improving education” really look like? For answers, perhaps it is time we learned from our academic competitors abroad. In some parts of the world, students enter academic and trade tracts early on to realize their school-to-work goals. Today, while it is true that high-tech innovators will lead the future, it isn’t the future for everyone. To ignore those who are not equipped to enter a highly academic career will only guarantee a future tax burden and social blight. Why not get realistic about the problem now?
It takes an “all of the above” economy comprised of low, middle and high-skill workers to achieve and sustain growth.
Solution: A) Place a renewed emphasis on making college affordable, and reduce predatory student lending schemes and for-profit college scams that leave students indebted for cookie-cutter career programs that are no longer in demand; B) solicit industry leaders. Model corporate citizens could receive a publicity bump or tax incentive to partner with schools and/or to sponsor apprenticeship and scholarship programs to train local populations for tomorrow’s jobs; C) recognize and reward model corporate citizenry — those that buck the trend of US companies complaining that they cannot find qualified talent, by which the H-1B visa program to entice foreigners to occupy high-tech US jobs are rationalized. Rather than to recruit for entry-level talent in India and elsewhere — an ironic practice given that many foreign students come here to obtain the world’s best higher education — let’s give Big Business an incentive to invest in our future here at home.
To encourage big businesses to advance from within their own ranks and/or borders is to reestablish corporate stakeholders.
3) RE-LOCALIZE ECONOMIES. Pundits need to stop engaging in protectionist scare tactics and consumers need to put their money where their mouths (and jobs) are. Technology does not lend itself to the undoing of globalized trade, nor is that the objective. Rather, competition for our money should be just that: an informed decision on the part of consumers that reflect individual values and our respective long-term interests. We have the power to vote with our pocketbooks and to create market demands: to circulate our dollars into the hands of hostile foreigners (Mideast oil), to empower socialist nations (the People’s Republic of China) and to remember communities and opportunities closer to home. Consider: the average American meal travels a distance of 1,500 miles to plate. Your television, computer and cell phone ship from entire continents away, and they are destined to make a similar journey when you discard them. With the rising cost of oil, ridiculously long supply chains and the numerous “accountability gaps” that have resulted in everything from toxic pet food to toxic baby formula — not to mention the foreign policy entanglements that energy reliance perpetuates — it makes sense at a variety of levels to reinvest in local banks, local food production and local goods and services. Demand — jobs — ought to bear some relationship to where the customers are. Aside from that, the globalized challenge of clean water and energy may not offer future generations a choice. In time, it may become too expensive to import goods that are produced on the other side of the globe.
The much ballyhooed concept of “responsibility” is, in fact, twofold: personal — to help yourself — and public — to help someone else. Much of today’s social and political problems can be traced to a desire to pit one form of responsibility against the other. When we look to successful historical examples for inspiration, however, we learn that great leaders and “good people” exemplify both attributes.
To prepare for inevitable and potentially devastating economic shifts we can: A) remove off-shoring tax incentives, and B) restructure massive trade deficits that are sucking money and jobs out of the middle class.
ELEPHANT IN THE ROOM
Rather than to resign ourselves to a painful economic realignment (parity) with the Third World — as media personalities and pundits allude to when they speak of becoming more “business friendly” — it is time we argue, instead, for equitable renegotiation of the free trade agreements (FTAs). The Chinese, among other Third World labor pools, provide cheap labor, but consumption levels — the ability of the populace to afford their own products — is low. Consequently, China relies upon a robust export market to wealthier western consumers. Now that the middle class western consumers are buying less, we have slightly improved our export position — that is our ability to market American-made products to people elsewhere in the world. But let’s face it: We are unlikely to see the days of mass manufacturing reemerge in the US without a dramatically lower standard of living by which to level the international trading field.
The problem with lowest-denominator pay, labor and environmental standards is that we stand to import Third World poverty more so than we export First World opportunity. This may increase our competitive edge on the labor front but it will also make us more like the Chinese consumer: less demanding of the things we work so hard to create. With less demand comes fewer jobs, and with fewer jobs comes the very real potential for a downward economic spiral of indefinite duration. With no one else better off than we with whom to buy or sell, it will matter very little if productivity is higher and/or those goods and services come at a lower cost of production. Market growth will lag, if not disappear. This is bad news for the US worker. It is bad news for the European. And it is bad news for the Chinese, too.
Free trade isn’t the problem. Self-destructive trade practices are.
Therein lies both the problem and the solution Occupy Wall Street protesters and Tea Party activists have an opportunity to coalesce around: the export of the American Dream in the form of equitable trade, labor, environmental standards and entrepreneurial opportunity. Make no mistake: Reduction of Big Government waste and the curtailing of powerful Big Finance are laudable goals that contribute valid solutions. Yet as long as we ignore the elephant in the globalized living room — unsustainable trade deficits — families here and abroad will continue to lose ground.
Ours is not a time for tired, trite and functionally-useless hyperbole. We need a win-win solution. It can’t come too soon.
If we look back 10-20 years from now and call the early part of this Century “the good old days” before the American Dream died, it won’t be for lack of opportunity and it won’t be because a bunch of do-nothing, handout-seeking Americans, as some cynics allege, took their punishment lying down. There are, in fact, solutions to the fear and uncertainty that ails us. To achieve something we can really be proud of, however, we must set aside pride, part with the partisanship and give pragmatism its day in the sun.
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RESOURCES
The Middle Class Is Radically Shrinking: Here are the Stats to Prove It | Yahoo!
What Ever Happened To Upward Mobility? | TIME
Can Localization Help the Economy? | TIME
Economists Rethink Free Trade | Bloomberg Businessweek
Government policies and the subprime mortgage crisis | Wikipedia
Many Large Corporations Avoid Paying US Income Tax, Study finds | BusinessNewsDaily
Here’s What Will Happen When China’s Bubble Bursts | Business Insider
The Press and Phil Gramm | Columbia Journalism Review
The New Parent Trap: More boomers help adult kids financially | US News & World Report
The Price of Civilization: Reawakening American Virtue and Prosperity | Amazon
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