If you've followed this blog at all, I think it's clear where I come down on socio-economic issues. As I contemplate our current situation, however, I think it's time for me to again consider what I believe and why. So please bear with me as I try and express my thoughts.
I will be turning 37 years old on Saturday. Maybe I'm old enough to have some solid ideas about my politics, my social understandings and leanings. But I find myself constantly revisiting what I've learned, measuring it against new experience and new data, and formulating anew what at one time had seemed so stable and so sure. While this is disconcerting at times, I find it beneficial - some real, positive insights have come to me, illuminating some previously darkened corridors of my mind. The Bill Cobabe of today is not the same Bill Cobabe as yesterday, and hopefully tomorrow will bring even greater understanding and enlightenment.
To put my thoughts in context, I think it's beneficial to speak about a friend of mine. He's a very good, close friend. I consider him a mentor and a guide as well as a friend. It is not a stretch to say that I feel genuine brotherly love and concern and respect and appreciation for him. He brought light to me at a time when I was searching, and for that I will be forever grateful.
He and I worked together on a factory floor of a fortune 500 company in western Michigan. We made parts for cars - sun visors (you know, the thing you flip down when the sun's in your eyes... hey - someone's got to make 'em!). As we worked together, and to relieve the utter monotony and boredom, we discussed things of a philosophical nature - religion, politics, ethics... It was all very heady stuff, and I dearly miss the conversations we had. I'm sure at times I exasperated this good man, but he was patient and kind and always, always respectful. We differed on a great many things, but due to my respect for him, my regard for his ideas, I came to find myself being gently reformed into a higher, deeper understanding and respect for the world in general. We still don't see eye to eye on several things, but we have reached an understanding of each other, and that's an amazing thing.
I quit that place in 1999. Not long after I quit he let me know that the plant was being closed. Keep in mind, many of the parts we built were patented - they could only be made by that plant. However, the company that originally founded the factory - it was originally know as Prince, after Ed Prince, the founder - sold it to the bigger company and the bigger company decided that it was too expensive to pay American workers to build their parts. Interestingly, Ed Prince never thought so. He made a LOT of money, reinvested heavily in the local community (he even paid to have the sidewalks downtown heated in the winter, which in Michigan is no small thing!), and kept his workers feeling like they were part of his extended family. When I started, I felt that very strongly.
But with bigger companies comes bigger issues an bigger concerns. It had been a privately owned company; now it was a publicly traded company with shareholders to appease and a stock price to maintain. So new strategies were put in place to ensure viability of the company. At least, that's what they said. What makes a company viable varies depending on how high up in the structure you are. At the executive level, folks are so far removed from what is going on on the factory floor that they almost literally cannot conceive of such a lifestyle. And vice versa.
So when it comes time to make a cut, those who make decisions are not those who consider cutting themselves or their pay. They look to lower areas - to the factory - and view the human costs of maintaining the factory as too high - too excessive. Indeed, American workers ARE expensive. But they have also consistently proven to put out the highest quality and most innovative products in the world. The problem is that we, as a country of consumers, have become so attached to the cheap that we forget about quality. We are willing to accept much lower quality if we can have it at a lower cost - so we can buy more low quality junk...
The factory was moved to Mexico. This is a direct result of NAFTA. NAFTA is a direct result of pressure put on politicians by business leaders to expand business opportunities in Mexico and Canada, where labor costs are cheaper and where new markets can be exploited. Yes, I know that sounds terribly Marxist - but he did get some things right, amid the many he got wrong... The result of NAFTA has been a diminution of the importance of American workers as their jobs go to Mexico.
My friend noted to me at the time that the move earned the CEO-types an increase of $20 million in the first year and each year following. He pointed out that at his salary, it would take the lifetimes of ten generations of him and his posterity to accumulate that amount of money - all earned in one year.
For an executive, the numbers represent profit margins, bonuses, and a lifestyle that 99% of us can never, ever know. For the rest of the 99%, it means financial ruin. It means no way to pay the house payment, no way to make the car payment, no health insurance (don't get me started on health insurance!), no food, no clothes... nothing. Nothing. These folks were specifically trained and carefully groomed over the course of many years to perform tasks that made them valuable at that factory, but those skills do not transfer easily to another place. Their retirement was also tied up in the company, which now no longer had any use for them. So what are they to do - 50 years old, too young to retire, too old to start anew? Decisions were being made about their lives without their consultation and without consideration of the long-lasting impact of these decisions.
Ironically, the main consumers of the products now being made outside the US used to be the American public, who had good jobs with which they could afford to buy these things. Henry Ford understood that - he sold cars to his own people... But we've forgotten that. They're now made in places where people can't afford what they make, sold in a country where people are underpaid. So in removing the means of producing a good living, the executive types have sown the seeds of their own destruction...
But in the short-term, profits are up, and everybody's happy. The profits of which we speak will ultimately translate to more jobs, more investment, more prosperity, right?
Not necessarily. The investment has almost halted, the jobs gone overseas, and prosperity does increase, but only for the top 1%. If the economy is growing - if we're out of the recession - why does the unemployment rate remain high? Someone's making money - but who?
The Great Depression happened not because there was a paucity of money, but because there was no confidence in the system, in the banks (which are there to protect money and provide investment capital), and in each other. In a self-perpetuating cycle, banks were not offering good interest rates, which discouraged saving. Lack of capital (garnered from folks' deposits in banks) leads banks to have to maintain low interest rates and makes banks leery of investing any of the capital they do have in risky propositions. Lack of investment (due to lack of capital) leads to business not wanting to expand, which slows job growth. Meanwhile, those with capital - the super rich - ride it out, consolidate their interests, and continue to garner profits at an unspeakable rate, while everyone else is in the doldrums...
Our economic engine is not powered by the accumulation of capital, but by the FLOW of capital. When the flow is stopped, hindered, or when confidence in the system is hampered in any way, everyone suffers. Even the super rich ought to pay attention - soon no one will be able to service their private planes and yachts, because no one will be able to afford the education necessary to service these highly expensive machines...
Look - I don't begrudge the rich their wealth. I am not advocating a Robin Hood approach to this. But we've seen what deregulation has done, and it has not been helpful. By not holding corporations accountable for their actions, we have tacitly supported their greed and avarice while the rest of us suffer. And it's time we ended that.
We have also severely eroded the ability of other nations to govern themselves. As we give free reign to corporations to trade around the world without regulation, we encourage investment in foreign markets. This investment comes at a price, however. As our interest in foreign markets increases, foreign political environments become a concern. And we find ourselves in the unenviable position of forcing foreign, sovereign powers to acquiesce to our demands, else face dire consequences. This is not new, but we apparently haven't learned from the lessons of the past...
What I would like to see is real reform. Meaningful. Lasting. And equitable.
I would like to see election reform such that lobbyists' contributions are limited to what an average person could afford. I would like to see a cap on the amount that any politician's campaign could accumulate/spend. I would like to see term limits and salary caps on Congress (say, the national median income).
I would like an end to the notion of "too big to fail." All business is a speculative, risky endeavor. Allowing the government to use tax dollars to support business is inherently wrong. It seems to go against the very core ideals of our society, even of capitalism!
There are other things I would like to see, including health care cost regulation, but I think that's enough for today...
I will be turning 37 years old on Saturday. Maybe I'm old enough to have some solid ideas about my politics, my social understandings and leanings. But I find myself constantly revisiting what I've learned, measuring it against new experience and new data, and formulating anew what at one time had seemed so stable and so sure. While this is disconcerting at times, I find it beneficial - some real, positive insights have come to me, illuminating some previously darkened corridors of my mind. The Bill Cobabe of today is not the same Bill Cobabe as yesterday, and hopefully tomorrow will bring even greater understanding and enlightenment.
To put my thoughts in context, I think it's beneficial to speak about a friend of mine. He's a very good, close friend. I consider him a mentor and a guide as well as a friend. It is not a stretch to say that I feel genuine brotherly love and concern and respect and appreciation for him. He brought light to me at a time when I was searching, and for that I will be forever grateful.
He and I worked together on a factory floor of a fortune 500 company in western Michigan. We made parts for cars - sun visors (you know, the thing you flip down when the sun's in your eyes... hey - someone's got to make 'em!). As we worked together, and to relieve the utter monotony and boredom, we discussed things of a philosophical nature - religion, politics, ethics... It was all very heady stuff, and I dearly miss the conversations we had. I'm sure at times I exasperated this good man, but he was patient and kind and always, always respectful. We differed on a great many things, but due to my respect for him, my regard for his ideas, I came to find myself being gently reformed into a higher, deeper understanding and respect for the world in general. We still don't see eye to eye on several things, but we have reached an understanding of each other, and that's an amazing thing.
I quit that place in 1999. Not long after I quit he let me know that the plant was being closed. Keep in mind, many of the parts we built were patented - they could only be made by that plant. However, the company that originally founded the factory - it was originally know as Prince, after Ed Prince, the founder - sold it to the bigger company and the bigger company decided that it was too expensive to pay American workers to build their parts. Interestingly, Ed Prince never thought so. He made a LOT of money, reinvested heavily in the local community (he even paid to have the sidewalks downtown heated in the winter, which in Michigan is no small thing!), and kept his workers feeling like they were part of his extended family. When I started, I felt that very strongly.
But with bigger companies comes bigger issues an bigger concerns. It had been a privately owned company; now it was a publicly traded company with shareholders to appease and a stock price to maintain. So new strategies were put in place to ensure viability of the company. At least, that's what they said. What makes a company viable varies depending on how high up in the structure you are. At the executive level, folks are so far removed from what is going on on the factory floor that they almost literally cannot conceive of such a lifestyle. And vice versa.
So when it comes time to make a cut, those who make decisions are not those who consider cutting themselves or their pay. They look to lower areas - to the factory - and view the human costs of maintaining the factory as too high - too excessive. Indeed, American workers ARE expensive. But they have also consistently proven to put out the highest quality and most innovative products in the world. The problem is that we, as a country of consumers, have become so attached to the cheap that we forget about quality. We are willing to accept much lower quality if we can have it at a lower cost - so we can buy more low quality junk...
The factory was moved to Mexico. This is a direct result of NAFTA. NAFTA is a direct result of pressure put on politicians by business leaders to expand business opportunities in Mexico and Canada, where labor costs are cheaper and where new markets can be exploited. Yes, I know that sounds terribly Marxist - but he did get some things right, amid the many he got wrong... The result of NAFTA has been a diminution of the importance of American workers as their jobs go to Mexico.
My friend noted to me at the time that the move earned the CEO-types an increase of $20 million in the first year and each year following. He pointed out that at his salary, it would take the lifetimes of ten generations of him and his posterity to accumulate that amount of money - all earned in one year.
For an executive, the numbers represent profit margins, bonuses, and a lifestyle that 99% of us can never, ever know. For the rest of the 99%, it means financial ruin. It means no way to pay the house payment, no way to make the car payment, no health insurance (don't get me started on health insurance!), no food, no clothes... nothing. Nothing. These folks were specifically trained and carefully groomed over the course of many years to perform tasks that made them valuable at that factory, but those skills do not transfer easily to another place. Their retirement was also tied up in the company, which now no longer had any use for them. So what are they to do - 50 years old, too young to retire, too old to start anew? Decisions were being made about their lives without their consultation and without consideration of the long-lasting impact of these decisions.
Ironically, the main consumers of the products now being made outside the US used to be the American public, who had good jobs with which they could afford to buy these things. Henry Ford understood that - he sold cars to his own people... But we've forgotten that. They're now made in places where people can't afford what they make, sold in a country where people are underpaid. So in removing the means of producing a good living, the executive types have sown the seeds of their own destruction...
But in the short-term, profits are up, and everybody's happy. The profits of which we speak will ultimately translate to more jobs, more investment, more prosperity, right?
Not necessarily. The investment has almost halted, the jobs gone overseas, and prosperity does increase, but only for the top 1%. If the economy is growing - if we're out of the recession - why does the unemployment rate remain high? Someone's making money - but who?
The Great Depression happened not because there was a paucity of money, but because there was no confidence in the system, in the banks (which are there to protect money and provide investment capital), and in each other. In a self-perpetuating cycle, banks were not offering good interest rates, which discouraged saving. Lack of capital (garnered from folks' deposits in banks) leads banks to have to maintain low interest rates and makes banks leery of investing any of the capital they do have in risky propositions. Lack of investment (due to lack of capital) leads to business not wanting to expand, which slows job growth. Meanwhile, those with capital - the super rich - ride it out, consolidate their interests, and continue to garner profits at an unspeakable rate, while everyone else is in the doldrums...
Our economic engine is not powered by the accumulation of capital, but by the FLOW of capital. When the flow is stopped, hindered, or when confidence in the system is hampered in any way, everyone suffers. Even the super rich ought to pay attention - soon no one will be able to service their private planes and yachts, because no one will be able to afford the education necessary to service these highly expensive machines...
Look - I don't begrudge the rich their wealth. I am not advocating a Robin Hood approach to this. But we've seen what deregulation has done, and it has not been helpful. By not holding corporations accountable for their actions, we have tacitly supported their greed and avarice while the rest of us suffer. And it's time we ended that.
We have also severely eroded the ability of other nations to govern themselves. As we give free reign to corporations to trade around the world without regulation, we encourage investment in foreign markets. This investment comes at a price, however. As our interest in foreign markets increases, foreign political environments become a concern. And we find ourselves in the unenviable position of forcing foreign, sovereign powers to acquiesce to our demands, else face dire consequences. This is not new, but we apparently haven't learned from the lessons of the past...
What I would like to see is real reform. Meaningful. Lasting. And equitable.
I would like to see election reform such that lobbyists' contributions are limited to what an average person could afford. I would like to see a cap on the amount that any politician's campaign could accumulate/spend. I would like to see term limits and salary caps on Congress (say, the national median income).
I would like an end to the notion of "too big to fail." All business is a speculative, risky endeavor. Allowing the government to use tax dollars to support business is inherently wrong. It seems to go against the very core ideals of our society, even of capitalism!
There are other things I would like to see, including health care cost regulation, but I think that's enough for today...
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