American Competitiveness: The New Untouchables or The New Half Truth?

If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away.

Henry David Thoreau

In “The New Untouchables “, New York Times columnist Thomas Friedman argues that in this downwardly mobile economy there is no room for average. Extraordinary is what it takes to survive and thrive in the modern workplace.

I get that.

Yet for all my appreciation for education — I hold two degrees so I do, in fact, lean in favor of Friedman’s premise that education is key to American competitiveness — his education-as-a-panacea argument oversteps its reach.

Most strikingly, Friedman’s description of a successful “untouchable” American worker isn’t a portrait of educational endowment at all. Friedman’s favorite descriptors, instead, refer to personality attributes: entrepreneur (risk taker), creative (visionary), analytical (critical thinker), and persuasive (charismatic). The obvious problem with Friedman’s pin-the-tail-on-the-wrong-donkey premise is that temperament is inborn — teachers, let alone parents, cannot instill personality characteristics that are not there to begin with.

Friedman’s eagerness to finger the usual suspects — schools — also ignores six reasons why Americans are at a competitive disadvantage in the global era. Here we examine those realities, and the future these changing times have in store.

First, there are more of us occupying this country — and this planet at large — than ever before. At some point, the mathematics of population growth have to matter. The sheer number of people in today’s workforce suggests more and more people are competing for the same jobs even as we adopt more and more technology to displace human hands. That’s not a sign of a lack of education; it’s a sign that business owners comprehend that productivity gadgets and gizmos don’t require breaks, a salary or workers’ compensation.

It comes down to the numbers.

Second, I would argue the inverse in response to Friedman’s suggestion that there just isn’t enough talent to be had here in the States. Over the past 50-some years there are more colleges turning out more graduates on an annual basis than employers of the past had access to. Many foreign nationals, in fact, come to the US for higher education opportunities. On the flip side, there are only so many engineers, M.B.A.s, lawyers, scientists and the like universities can churn out before higher-end fields become saturated in much the same way low-end jobs are chalk full of contenders.

It’s no longer merely a question of whether there are clear winners and losers on the academic front.

Job scarcity is a threat, in part, because of the decades-long trend of mergers, acquisitions and a globalized labor pool. Consider: There are generally fewer than a dozen heavyweights in a given industry — everything from mainstream media to appliance manufacturing. This trend does not bode well for domestic job expansion. And if jobs aren’t available to begin with, it is tough to gain a competitive advantage even with above-average potential. So what we are seeing, in this author’s opinion, is an over-supply of talent.

But that doesn’t mean the proponents of Friedman’s dire self-fulfilling prophecy won’t get their wish.

With less competition in a given industry there is less demand for the eager young grads institutions of higher learning infuse into the job market each year. With shrinking demand and a greater supply of contenders, salaries may also take a nosedive. America at large may become competitively disadvantaged in the years ahead precisely because the “good jobs” of today are no longer perceived as a source of steady employment or adequate pay thereby diminishing American college students’ willingness to pursue them.

Already, the very cure that causes the “employment insecurity” disease is well underway: Calls for immigration reform permitting more foreign grads to take up permanent residence in the U.S. as a form of “insourced talent” are originating from Google, Microsoft and Susan Hockfield, MIT president and author of an October 19, 2009 Wall Street Journal opinion piece ironically titled “Immigrants Create Jobs and Win Nobels“.

Sure there are a lot of average people who aren’t cut out for the highest levels of business, government and academia. Just the same, there is also an ample supply of bright, talented American citizens who, for all their desirable qualifications and qualities, will nevertheless find themselves competing toe-to-toe against peers who are just as capable and “deserving” of a career break as they are.

Somebody has to lose.

Third, failure to thrive in this Brave New Economy isn’t always linked to failing schools, as Friedman argues. Good health is arguably the number one prerequisite to productivity. Healthcare is such a hot topic precisely because we cannot remain competitive if, as a country, businesses and individuals are increasingly diverting money out of the real economy just to keep up with the skyrocketing cost of healthcare.

Beyond that, few esoteric explanations matter when perfectly down-to-earth explanations suffice. When an individual charged with hiring decisions has too many promising applicants to choose from among, what assets wins out on the last round of interviews? That extra year or two of experience? Those additional GPA points? Or would it be more honest to conclude that it comes down to how well an applicant clicks with his or her interviewers? Hands-on experience, even a social or physical attribute — whatever it may be that fits a manager’s self-styled view of the proper candidate — is just as likely to make the deciding difference.

On the flip side of the coin, there is a perverse disincentive to hire the best qualified candidates. For one, they tend to be more experienced and/or highly educated, thereby commanding greater salaries. For another, few people in the position to do so hire individuals with the obvious capacity to perform so impressively that it will ultimately threaten their own job security. Friedman is right in the sense that education and talent ought to insulate Americans from the pitfalls of a failing global experiment.

Unfortunately, it does not.

Fourth, where one lives also figures largely into one’s ability to compete. Like the tough-luck stories that abound on the streets of Hollywood, those who flock to saturated markets — Los Angeles, New York, etc. — may, ironically, find fewer opportunities to leave a lasting, positive impression due to the sheer number of people in the area who are equally worthy of consideration. An over-supply of applicants for a given position, in turn, may make it more challenging for employers to select optimal talent vs. expedient talent. Translation? Being a big fish in a vast ocean still makes you a little fish. To argue, therefore, that education can somehow imbue success and that lack of it underlies a failure is a misnomer.

It’s impossible to underestimate the economics of supply and demand.

Fifth, it’s a mistake to assume that a Third World factory worker is more “competitive” as Todd Martin, former PepsiCo and Kraft Europe executive, suggests to Friedman. Third World workers come inexpensively, and that’s one competitive disadvantage that will only heighten the more educated the American workforce becomes. Why? Because talent doesn’t come cheaply — nor do the salaries of increasingly educated job seekers struggling to repay oppressive student loan debts as a direct result of their herculean efforts to rise head-and-shoulders above the crowd.

Getting noticed in an increasingly competitive job market only ups the ante — and the price tag of success.

Sixth, the assumption that Third World products are better made by virtue of their “efficiency” is also flawed. When frequent replacements and upgrades are factored into the cost of ownership, inexpensively manufactured Third World goods are, ironically, quite pricey. Case-in-point: In 2005 I replaced a 30-some-year-old GE refrigerator made in the US as well as an old but functioning washer and dryer. If I had to do it all over again, I wouldn’t trade anything old and working for something new, sleek and modern. Why? Because the major appliances I purchased new in 2005 — all have had repeated major breakdowns requiring multiple service calls, dozens of hours on the phone, weeks waiting for parts.

Even when consumers spend top dollar, the manufacturing source and quality of today’s big-ticket items are often quite similar — with merely a change of window dressing to imply otherwise. That’s what happens when there are so many market consolidations that an appearance of choice is just that: little more than a dozen or so name badges owned, in truth, by the same handful of Big Players. It is almost laughable the degree to which consumers on complaint websites proclaim that they will never buy brand “X” again, only to unwittingly state that they intend to replace such-and-such item with brand “Y” — yet another brand or subsidiary of the very same company who manufactures brand X!

Market concentration doesn’t grow jobs any more reliably than it promotes healthy competition.

Sparing one another the hassle and headaches of poor quality goods isn’t the only reason to care, however. The build-it-to-last ethic of decades past was, perhaps, the ultimate expression of “Green“. Why? Because durable goods were seemingly less likely to break down, destined for a landfill in an absurdly short time frame. By contrast, “planned obsolescence” is the new norm, with a trend of shrinking manufacturer warranties to attest to the low vote of confidence manufacturers assign to their own products. Longevity isn’t a valued trait in a disposable society, but if we really want to go Green perhaps we should rethink the “dept-trap consumerism” cheaply designed and manufactured products facilitate. Sadly, modern rhetoric would have us believe that pride in one’s workmanship — a refusal to sell junk to unsuspecting consumers — is “noncompetitive”.

All talk of going Green aside, standardized manufacturing processes have made it difficult to make the case that company “A” is making a better product than “B” or “C”. Consequently, the maxim “You get what you pay for” has never been more suspect. True, you may get more for your money, but that does not necessarily translate into significantly better quality. What differs most dramatically is the amount of money corporations throw into slick ad campaigns, and the perception consumers have of branding and value.

It would be one thing if high-end boutiques were selling products made by First World craftspeople with higher price tags thanks to First World production costs. But when both low-end retailers and high-end retailers are selling inexpensively made foreign goods, who, exactly, are they fooling? Fairly or not, Third World origination suggests that income and human rights disparities favor corporate bottom lines. In the Third World, after all, it is not uncommon for workers to be denied bathroom breaks, sick days, maternity leave and most of the other benefits and protections Americans consider “civilized”. It is not surprising, then, that workers are more productive when they spend most of their lives in the confines of a factory, fearful that their only other option is a life of abject poverty and/or prostitution.

In short, the Third World is the modern-day economic equivalent of the pre-Civil War Old South: a place for slave-like child and adult labor, often conducted under sweatshop conditions. As if that weren’t questionable enough, outsourcing trends pose an unacceptable risk to national security as well.

So how does all of this tie in?

Unless Americans are willing to stoop to similar lows to compete with workers abroad, it’s not possible to rationally conclude that education, talent or entrepreneurship on the part of American workers will level the economic playing field anytime soon. America’s competitive disadvantage, rather, speaks to corporate opportunism — and to the politicians in recent decades who have crafted immigration, economic, trade and taxation policies that have enabled such heavily skewed commerce to become the norm.

Moreover, if being properly educated, creative or analytical adequately described, as Friedman suggests, the entirety of American competitiveness, I suspect we would see fewer reckless gambles on Wall Street and more evidence of long-range thinkers putting the brakes on short-term gain (scams) in the lead up to the Great Recession. In the real world, however, the “right reasons” are not always the cause for getting ahead — or, conversely, for falling behind.

THE WAKE UP CALL

So why care whether or not a newspaper columnists gets it so wrong? Because generalizations and simplifications aren’t a starting point for progress. Economists are projecting a ~10 percent national unemployment rate that’s here to stay for the foreseeable future. That can only mean more bankruptcies, more foreclosures and a greater amount of “dead weight” on America’s ability to compete. Only by taking a long, hard look at the unvarnished truth do we have any hope of fingering the right culprits, crafting the right solutions and ultimately reviving Main Street before the American Dream becomes a distant memory of a bygone era.

Doing nothing is not an option.

If Middle Class wages continue to decline as we move further into the 21st Century, who will consume the products and services entrepreneurs on both sides of the oceanic divide offer? Will young Americans, contemplating the grimness of their economic future and/or the need for ever-more costly and impressive academic résumés opt for traditional marriage and family life — the nation’s greatest driver of new purchases, everything from strollers and diapers to single family homes and minivans? Should Main Street’s economic House of Cards continue to crumble, will Third World workers have their own Friedmans urging them to blame themselves when factory orders dwindle and the newly affluent in Asia and India begin to see their own hopes and dreams falter? Or will they see it — we see it — for what it is: globalized economic forces beyond any single individual’s immediate control?

As kind-hearted as sweatshop proponents paint it — that throwing out more life preservers will rescue Third World residents from a life of “primitive agriculture” — building more life preservers than boats is a plausible scenario. Economic growth, after all, relies on expansion. For much of the world’s history markets were local, national, then regional. Globalization isn’t a sure-fire path to success: It’s an experiment that presupposes that natural resources will support endless growth. And it begs a simple but profound question: What happens when all markets are tapped out?

Working and Middle Class people — the majority of us — may not be the most educated, creative or adequately prepared lot, to hear Friedman and his corporate pal, Todd Martin, hash it out. But that doesn’t change the reality that the American Middle Class must earn a living wage in order for the economy — ours and theirs — to thrive. Yet it is telling that in Louisiana, a state with fewer college grads to begin with, Curt Eysink, director of the Louisiana Workforce Commission, indicates that there is an oversupply of degreed residents “we cannot employ” because job growth projections favor vocational trades and the service sector — primarily low-wage occupations such as ticket-takers, cashiers and customer service representatives that are not so prone to the insourcing/outsourcing phenomena.

Is this a sign of things to come?

Without the discretionary income Middle Class Joes and Janes inject into the marketplace, globalized economies may become relegated to a small percentage of elite income earners pitching their products and services to other elite individuals. This may be a recipe for modern-day feudalism, but it’s no way to protect and preserve the merits of free-market capitalism, let alone a profitable market share.

As dire as it all sounds, this isn’t about being pessimistic. Opening our collective eyes is the first step in defending what matters most: family, community, culture — the United States itself. If that means rethinking our definition of progress in the 21st Century sans the usual set of partisan blinders, so be it.

This is no time for subterfuge.

If Friedman wishes to talk about education, he ought to contemplate the wisdom no book learning apparently can impart in America’s best and brightest CEOs and newspaper columnists: The foresight to realize one’s employees/coworkers are also one’s customers/consumers. That means that success at the top of the economic pyramid is only as long-lived as the Middle Class foundation upon which it rests. Excuse it, deny it, defend it, ignore it: the race to the bottom is a very real risk when good intentions go too far.

It’s foolhardy — and a threat to democracy itself — for a transnational conglomerate, an economy, a nation, to conduct business using the lowest common denominator as a competitive yardstick. And yet, globalization promises to outsource gain even as it insources pain. At best, this implies that if and when international economic and trade equilibrium is achieved Third World laborers will nevertheless be unable to sustain the lifestyle Americans have taken for granted — if only by virtue of how thin finite natural resources are stretched — whereas Americans should anticipate “economic insecurity” as a way of life. That’s why Friedman and friends argue so passionately that being wildly successful — untouchable thanks to one’s creativity, innovativeness and education — is the only position of safety (familiarity). The rest of us, apparently, are destined for a mediocre economic melting pot in a neocapitalist New World Order.

Cliché though it may sound, the proactive response to an uncertain future is civic engagement: voting wisely with one’s ballot and one’s pocketbook in support the kind of economy one wishes to see. For if there’s any silver lining to this Great Recession, it’s in bringing an abstract global issue close enough to home that we can reach out, touch it — and change it.

It’s not too late.

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Resources:

America Out of Work: Is Double-Digit Unemployment Here to Stay? |TIME

Obama Adviser Summers Rejects ‘New Normal’ of Slow U.S. Growth | Bloomberg

U.S. Job Seekers Exceed Openings by Record Ratio | NYT

Are You Prepared for a Jobs Depression? | ere.net

How Long will America Lead the World? | Newsweek

Cap and Trade Dementia | The American Spectator

Schools As Scapegoats | The American Prospect

Is it Time to Retrain Business Schools? | NYT

Go Global, Young Manager | Financial Post

Is a College Degree Worthless?/MSN Money

Don’t Get That College Degree! | NY Post

Cat Gets GED: Why GPAs, Degrees and Job Titles May Be Worthless | ITBusinessEdge

Too Many Doctorates Chase Too Few Jobs | San Francisco Chronical

The Three-Year Solution | Newsweek

Asking for Student Loan Forgiveness | Businessweek

Middle Class Facing Decline in Expectations, Economic Power | Retail Traffic

21st Century Skills, Education & Competitiveness (PDF)

Jay Mathews: Why I don’t Like 21st Century Reports | Washington Post

Friedman: U.S. Education System Endangering Global Competitiveness | Education Futures

A New Look at American Competitiveness | Entrepreneurship

The World’s New Superpower | Salon

The Almighty Renminbi? | NYT

The End of the Dollar Spells the Rise of a New Order |The Independent (UK)

China will Overtake America, the Only Question is When |The Independent (UK)

China’s Economy | Brookings Institution

Lax Oversight, Globalization Erode Product Safety | CNN

Technology Made to be Broken | CSMonitor

Appliance Anxiety — Replace It or Fix It? | NYT

Rethinking Globalism: Why We Need a Cell-Based Economy

When you listen to the pundits and economic experts, you come away with a mixed bag of blame for the economic woes the United States, and by turn the global economy, presently faces.

At first blush, it’s middle class “Annie” with her subprime mortgage, too ignorant or materialistic to admit that she can’t afford the McMansion she lives in.

At second glance, it is the greedy, not-my-problem mortgage broker who knows banks routinely sell off homeowners’ loans to Wall Street investors who will be left holding the bag when homeowners default.

Looking at it from another perspective, deregulation of the telecommunications, energy and financial markets — under the premise that free markets are self-policing and never irrational —  has been blamed for everything from the collapse of WorldCom and Enron, to the subprime mortgage crisis that has spiraled into the credit crunch we see today. And the chief instigator, critics point out, is none other than Sen. Phil Gramm, Sen. John McCain’s economic adviser. Is it possible that an adviser who perceives no harm in unchecked deregulation may be at a loss for words, leaving McCain’s presidential campaign with little choice but to run distraction — personal attacks — at a time when the rest of the nation is galvanized around the economic harm striking ever closer to home?

Flashing back to September 11, 2001, a few may trace the problem to President Bush’s not so subtle suggestion to grow the economy in support of the War on Terror. The President admonished consumers to go on spending, and thanks to what amounted to an eight-year Wall Street “stimulus” consisting of interest rate cuts and easy credit presided over by presidential appointee and former Federal Reserve Chairman Alan Greenspan, Wall Street enjoyed what some economists have described as a once-in-a-generation bull market. The bear had to make his appearance eventually.

Tracing the issue back a step further, another camp of blame-gamers pinpoints the Clinton Administration, which in 1999 “openly urged the Federal National Mortgage Association (aka “Fannie Mae”) to reduce down payment and credit requirements for ‘at risk’ borrowers in an attempt to increase home ownership rates among minorities and low-income consumers,” the Visalia-Times Delta reports.

To watch “IOUSA“, a recent documentary film following former Comptroller General David Walker, who in 2005 launched a “Fiscal Wake-Up Tour“, our present problems are tied not so much to who occupies office — for both parties suffer from what Walker calls a “leadership deficit” — but to a financial system that is leveraged as much as 30 to 1. Simply put, that means that for every dollar a bank has in reserve, it can borrow 30 more. Artificial money props up an artificial bubble. And to these Perfect Economic Storm clouds, we add Walker’s dire warning that the U.S. is headed toward bankruptcy. Unfunded liabilities for Medicare and Social Security, not to mention a deficit approaching $11 trillion, threaten to sink our Ship of State as it is.

Will the recently passed $700 billion bailout help?

The Dow Jones Industrial Average was already on its way to an 80-year low on September 29 when the original bailout package failed. All the while, the media elite insisted that without a bailout the hurt would hit Main Street. Yet when Friday, October 3rd’s second bailout passed the House, NASDAQ and the Standard & Poor’s 500 Index fell yet again even as bank-to-bank lending rates hit new highs. Why would Wall Street react as if the bail out were bad news when virtually everything we’ve heard in the mainstream media holds otherwise?

For one, $700+ billion — which if dollar bills were laid end-to-end would reach the moon and back 138 times over — simply isn’t enough. Speculative figures run as a high as $1 trillion. For another, it came too late. The subprime crisis started over a year ago, yet only in recent weeks has President Bush acknowledged that Wall Street is grappling with a “house of cards“. Unemployment rates, meanwhile, have surged to 6.1 percent nationally. Make no mistake, however: The hurt at home doesn’t mean taxpayers won’t be called upon to write Treasury Secretary Henry Paulson yet another blank check. Worse, the bailout plan might just make the problem worse, critics allege, by heaping inflation on an already shaky financial services sector.

In the midst of all the madness, perhaps there is a greater lesson here that we risk missing. That picture begins to emerge when we contemplate the notion “too big to fail”.

What does that have to do with the human body, you ask?

Everything.

Call it nature or God, but every living creature is a multiple-cell organism. In fact, we have billions of tiny cells, each working in tandem to make our bodies function.

In bygone days, economies were less like machines and more akin to living organisms. Geographically rooted, they grew their own food, lent money to their own community members, put out their own fires and built their own homes with supplies they sourced within the region.

Planes, trains and automobiles have changed all that.

Today we have multinational corporations, increasingly, whose failures threaten to resonate throughout the global economy not like a handful of harmless 3.0 earthquakes on the Richter scale, but more akin to a life-altering 10.0 “Big One”.

When globetrotting Gulliver begins to teeter as the ground beneath him sways, the little people won’t pillage him, they’ll be called upon to prop him up.

That’s the New World Economy for you. This bailout isn’t the first and it will hardly be the last.

What’s wrong with this picture?

Globalism produces unprecedented potential for gain, but it also puts us at proportional risk. Socialist or Capitalist, the role governments undeniably play is this: underwriters of corporate risk. We need to stop right there and think long and hard about whether this is the road we want to go down.

One of the core problems, which is so taken for granted that it hasn’t even received a second look in the mainstream media, is that an efficient market rests upon a surprisingly delicate underpinning. Sure there are trillions of dollars trading hands, and when all goes well it is a sight to behold. But what happens when the economic body gets sick? Can 10,000 or so massive cells do the work of millions that preceded them?

Probably not.

If our bodies were designed or evolved in the manner modern economies are structured, a simple cold, let alone heart disease or cancer, could take us out. A couple of sick cells would be sufficient to bring the entire body to its knees, a far cry from a massive, systemic infection attacking billions of cellular citizens.

The problem with conventional global economic thinking is that it operates on the assumption that the Titanic is impossible to sink. But what if we reverse that assumption and ask ourselves what we can do to protect ourselves should the unthinkable take place?

To borrow a phrase from so-called tree huggers, what we need is sustainability. Only this time, we’re not talking ecosystems. We’re talking financial systems.

There’s a lot of buzz about “going Green”. But greening our economy isn’t just about clean energy. It’s about local control. Self sufficiency. The type of accountability no regulatory system can substitute for: neighbors, coworkers, bankers and business owners who know each other by name, who rely on each other and help keep one another honest. When you see the consequences of your actions played out not on some abstract global financial stage but in your own backyard, that’s what economists call an incentive: an incentive not to play poker with your neighbor’s hard-earned money.

You might call this concept a CELL-BASED ECONOMY. It’s modeled after the only sustainable concept evolution has taught us: A cosmos filled not with a few thousand Jupiter-sized bodies with a disproportionate gravitational pull, but blanketed as far into the depths of space as an astrophysicist can see. The human and animal organism, likewise, populated not by the few and irreplaceable but the many and regenerative, whose power lies in numbers, not reach. Until economies restore a sense of “place” within the larger economic body, markets will again and again prove in need of oversight (regulation) to reign in the masterminds of greed who exploit nameless victims, which the current globalized modus operandi all but encourages.

We’ll know we’ve become active stake holders in this Cell-Based Economy the day we refer to economic participants as people, not too-big-to-fail multinational “entities” that can make or break economies in a few short months or years. Under this scenario, loan originators would not abdicate responsibility. For only when risk is no longer another investor’s problem, will much of the temptation to approve hasty, house-of-cards loans fall by the wayside.

Going back to a Main Street economy might just save us from ourselves. Why? Because the more impenetrable the global economy grows, the more difficult it becomes for would-be entrepreneurs to elbow their way in to the feeding trough otherwise known as the American Dream. President Woodrow Wilson, as far back as 1913 in a book titled “The New Freedom”, bemoaned the fact that we have a “system of credit” that all but precludes the little guy. We pay more taxes yet become, essentially, debtors, producing very little. Indeed, that is what the United States has become: Not the proud productivity-based economy of yesteryear, but a middle class-squeezing, downwardly mobile “consumer economy” whose very survival is dependent on the goodwill of global benefactors (investors). So when former Comptroller General David Walker talks about an $800 billion annual trade deficit with China in the chilling financial exposé “IOUSA”, this is the kind of leverage we’re giving away. Equally disturbing, it all but hog ties us where foreign policy is concerned. We can ill afford to anger nations who prop us up financially by opposing the actions of their Axis of Evil allies — i.e. it saber-rattling nationalists in Iran or Russia.

The fact that so many Americans have poor credit, little or no rainy day savings, and are defaulting in such vast numbers paints an unsustainable economic picture. But it isn’t just the little guy who is struggling. If nothing more, this debacle has proven that Big Business is more vulnerable than we thought. Looking back a year or so ago when the first rumblings on Wall Street were shaping up, sovereign Mid East wealth funds came to the rescue. Yet NASDAQ Chief Executive Bob Greifeld praised the 20 percent stake Arabs stood to gain in the exchange as “a good transaction for the U.S. capital markets system … it will make sure that NASDAQ is a key player in the global consolidation.” If “global consolidation”, arguably a euphemism for economic contraction, is what market bellwethers foresee, what does that say about the long-term solvency of the U.S. economy?

“Last week, just by coincidence, our national debt exceeded the $10 trillion mark, and a lot of that money is owed to foreigners. The tide of money that washed away any sense of proportion or ethics on Wall Street also comes, in part, from overseas. When critics of the $700 billion bailout complain that it was passed just to keep foreign banks happy, there’s some truth to that. It’s a chilling sign of just how much national sovereignty we’ve signed away in return for overseas capital,” writes Atlanta Journal-Constitution columnist Jay Bookman.

From a foreign investment standpoint, American assets may resemble a smorgasbord — fodder for a fire sale in the event the meltdown continues despite the bailout. In one possible scenario, financial assets may go the way the U.S. steel and auto industries did in the 1980s and ’90s — outsourcing investments the way manufacturers outsourced production. Do those of us who call Main Street USA home wish to owe Asia and the Mid East our mortgages and 401Ks? When the dust settles, will the U.S. financial services sector have an American face?

If you bring the issue out of the abstract and closer to home, the global business model has brought us to a point where critical vaccines and medications may be manufactured by a single source. A pandemic, economic, political or natural disaster threaten to precipitate mass shortages or an over-reliance upon risky, untested foreign sources. One day, what if those shortages included food? What if a severe economic crisis combined with even higher fuel prices means that truckers are temporarily, even, unable to receive a paycheck? Will every grocery chain and retail store from one end of the country to the other face the prospect of bare shelves because the handful of transportation companies to survive globalization’s push toward consolidation are idling down due to strike or disaster, manmade or otherwise?

In an efficient, mechanistic economic system there are fewer and fewer redundancies. This leaves fewer players in place to go on conducting “business as usual” in the event of a crisis. The result is that problems that formerly hit one community — not unlike the recent gasoline shortages in the Southeast following Hurricane Ike — may transform from regional problems, to national shortages, to global crisis.

There is something to be said for the idea that local communities should be self sustaining to whatever degree possible. This means that each region of the country should develop or retain capacity to produce food and energy using locally sourced suppliers, and to maintain manufacturing capacity. That community model may seem unrealistic for now, but it should be a long-term national security priority.

It was once believed with near religious devotion that the world was flat. And later, infamously, that the Titanic was too sophisticated to sink. If there’s one thing this economic crisis has taught us, it’s never say never.

It would be foolhardy to manufacture a rope with only one thread, for at best it could be described as a string. Yet with each multinational merger, each death of a competitor, each transformation of a local economy into a consumer economy, we’re taking a rope of many threads and reducing it, cut by cut, to just one cord. That sort of efficiency may reduce waste and redundancy, but it’s also the source of our global economy’s potential unraveling.

Perhaps it’s time to rethink basic assumptions.

The prospect of global recession is an inevitable byproduct of an economy that has become overly enmeshed. Like a pair of young lovers joined at the hip, this is a relationship that might look ideal at first glance, but is psychologically dysfunctional. None of this is to say that international business ought to become a thing of the past. National and international trade brings commodities that are overabundant in one region to areas of the world where they are in great demand. That form of commerce cannot and should not be stopped. Rather, it is a long-overdue reminder that global business should not come at the expense of local productiveness (sustainability).

Reviving an economic system that promotes multiple supply chains with emphasis on local distribution and long-term sustainability as a hedge against instability elsewhere in the world flies in the face of what started out as a giddy 20th Century globalization experiment.

But if and when the Titanic sinks, nobody will be laughing — except, perhaps, the World Federalists.

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SOURCES

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Economists say bailout necessary, but every option has drawbacks

A curious coalition opposed bailout bill

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A bailout that wouldn’t cost you a dime

Congressman Peter DeFazio Introduces the No Bailouts Act

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Crisis exposes flaws in U.S. economy, tarnishes image

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Nice bailout. Now what else you got?

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Wall Street’s stock has dropped in world’s eyes

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Feeling Wall Street’s pain, from Manila to Paris

Wall Street follows the Middle East trade route

Sleepless Nights : Mideast sovereign wealth fund investments on Wall Street

Chrysler Building on the block: sovereign mid east wealth fund to pay $800M

Lost Sovereignty: Oil-rich fund eyeing U.S. homes

Glodman Sachs sets up funds to invest bank money in the Middle East : Peter J. Cooper’s Weblog

Ron Paul’s Texas straight talk on the bailout

Ron Paul rails on $700 billion Wall Street bailout

Long-term capital: It’s a short-term memory: former Fed. Chairman Alan Greenspan’s role

McCain’s scary economic advisor

The subprime mess and Phil Gramm: An experiment in deregulation

Foreclosure Phil

The real legacy of the ‘Reagan Revolution’

Blind Faith: How Deregulation and Enron’s Influence Over Government Looted Billions from Americans

The coming collapse of the middle class

Does the free market erode moral character?

A New American Dream: From subprime crisis to livable communities