The Fourteenth Banker Blog

July 3, 2010

The American Century

Filed under: Running Commentary — thefourteenthbanker @ 6:07 PM

The 20th century was The American Century. Let’s face it. This century has been a flop, a dud, and it does not show much promise. Following our second major recession in this short century, the nascent recovery is foundering. After the worst terrorist attack on US soil, we have spent a decade at war and accomplished what? Personal standards of living are falling, yet we remain a materialistic society.

We need American jobs. Here are some stats updated from the latest employment reports, courtesy of Calculated Risk.

So the percentage of job losses and the duration of the job recession exceeds any post war recession.

The percentage of our population that is employed is falling towards post war lows. Job creation is not sufficient for the growth of our population, so this graph will continue to trend down until we see an exponential increase in new employment.

The level of desperately unemployed is off the charts. If we double dip, this number will continue its trajectory. In addition, even among those employed, the quality of employment is down. More people are working part time or below their historical income levels.

There are no easy solutions. However, as this article points out, we have created some of this mess ourselves. We have outsourced and off shored too many jobs. Our corporations have elected to save money by employing cheaper foreign labor or by maximizing product content purchased from overseas. We have seeded the rest of the world with employment and technology that has made it easier for them to build industries that compete with our own. We have believed the myth of our own invincibility. We were smarter, better, more industrious. We could keep the high skill high pay jobs here and enjoy the benefit of low cost employees and resources overseas. So we thought.

I am not a protectionist. I do not believe in trade barriers except where there are grossly disparate trade policies. I do believe it is long past time for American corporations to step up to the plate. Corporations must make voluntary choices to share the prosperity. Our shareholder first philosophy is self destructing. By not taking care of the American worker, our shareholders are now reaping the domino effects of deflationary pressures, weakened consumers, insecure retirees, unemployed teens that can’t build valuable skills for future employment, environmental degradation from safety shortcuts, a future higher tax environment from diminished national income, and a spiral towards global mediocrity.

When will we we wake up?

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2 Comments »

  1. As soon as ‘we’ is universally recognised as being only about our species. Any national perspective is atavistic.

    Comment by Charles Frith — July 4, 2010 @ 11:44 PM | Reply

  2. This is exactly it: “…we have created some of this mess ourselves. We have outsourced and off shored too many jobs. Our corporations have elected to save money by employing cheaper foreign labor or by maximizing product content purchased from overseas. We have seeded the rest of the world with employment and technology that has made it easier for them to build industries that compete with our own….”

    Over the weekend I watched Michael Moore’s Capitalism A Love Story. ouch I would say. But I think it’s his best. And it got me thinking about America’s post-industrial wasteland of abandoned manufacturing sites and ghost town communities–ghost town CITIES–all over the country. It looks like post-war ruins. As if “the homeland” had already been under siege even before 9/11 (the Gulf of Mexico being the latest battlefield. Military strategy is to take out industrial centers (factories and train lines were bombed all through WW2) and displace the population. Yet in America we’ve experienced similar impact, but without bombs dropping from the sky. Have any formal studies been made to compare America’s post-industrial devastation to a genuine post-war landscape? For example, how does the loss of heavy manufacturing through corporate maneuverings compare with the loss of manufacturing through war, such as in Europe and Japan after WW2? The biggest difference is that ours took place over decades rather than the acute, but typical, duration of a few months or a few years in traditional warfare. Can the migrations of Americans relocating every few years for new employment be compared to the migrations in war-torn or famine-plagued countries (the numbers of people, the patterns of displacement?), but with a nicer face? In America, we’ve praised this option to migrate as freedom of opportunity. But it’s a force that can also fray social fabric and can create hardships. As a culture we regard most hardships as individual burdens, individual flaws, individual failures. But if you stand back and look at it, over 30 to 50 years, it’s looking like we’ve been dealt great blows and not even realized it. So now I’m wondering. Can America’s post-industrial landscape be compared to a post-war experience?

    Coincidentally I also just finished reading a biography of Martin Luther King by Marshall Frady (http://www.amazon.com/Martin-Luther-King-Jr-Life/dp/B000GG4HNO/ref=sr_1_7?ie=UTF8&s=books&qid=1278436320&sr=1-7). The book was published in 2001 but the language of the last chapter, which focuses on MLK’s radical re-thinking of capitalism and which led to his Poor People’s Campaign (http://en.wikipedia.org/wiki/Poor_People%27s_Campaign), sounds like it could have been written today. I had to check the pub date to be sure. So, as it turns out, we’ve been here before. Eerily so.

    I think we need more conversation about the role of outsourcing American jobs. It’s both a big story and an understated story. But I think it’s at the heart of our current problems.

    Comment by MB — July 7, 2010 @ 9:23 AM | Reply


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