Tuesday, June 23, 2009

On the Lighter Side

On the Lighter Side,

Yesterday I got a ride in- and a quick test-drive in an Equinox from Maurice, our good friend and computer consultant for many years. The Equinox is a GM prototype of a hydrogen propelled SUV with mileage standards roughly equivalent to the much lighter Prius, 0 to 60 in nine seconds. We took it for a completely effortless climb up Mt. Washington. But the greatest advantage is that of having zero (and I mean it) pollution in its emission. With the engine running, you check the exhaust: No fumes of any kind, only a few drops of water. Hello, fresh air in the L.A. basin! Check it out at http://gmfuelcell.com

Tuesday, June 9, 2009

How the Economy Tanked and How It Could Be Saved

In the Good Old Days

How did the American economy go into a nosedive? In the fifties and sixties it was easy for anyone to get a job, a mortgage and to support a family. Just about anything you could see, hear or touch was made in the U.S.A. Manufacturers, buyers and sellers were American. You could make a living just about anywhere in the country, whether you had a small business, practiced a profession, worked in a factory or as a salesclerk. Whatever was produced in factories could be sold in stores or dealerships and there were plenty of buyers for no-matter-what. As almost everybody's credit was good, business kept up a steady pace. Producers could rely on a steady stream of consumers, and consumers were comfortable living within their means.

Mutual Respect and Loyalty

Going into retirement was no problem. Companies large and small had pension plans. Unions had made sure that the employees of large companies would get decent retirement packages, and smaller companies followed suit because they wanted to be competitive. From large corporations down to local businesses, management knew and appreciated their staff. In general those on top respected and valued the loyalty of those at the middle and lower levels. Workers and white collar staff trusted their supervisors, and they were proud of working for their employers whether their company was GM or a local hardware store.

Dog-Eat-Dog Comes into Fashion

Then, what happened? Even though the country began to be polarized through the Vietnam War by the end of the sixties, basic underlying values of decency were still in place in business, social and political arenas until the late seventies. By then a conservative cloud began to settle over the country. By then a steady drumbeat blaming all social ills on the power of the unions filled the airwaves. A dog-eat-dog philosophy became more and more popular. People on welfare were labeled as parasites. And for the first time since the great depression there was ever-increasing homelessness. Where earlier it was considered against the law for someone to sleep on the streets, getting the sleeper arrested for “vagrancy,” for the homeless to sleep on the streets was now considered unfortunate but inevitable. Food and shelter were once considered a right based on American tradition. Everyone could still be fed because of the food stamp program, but shelter could now only be guaranteed if people managed "to measure up." Those who insisted it was only decent to house the homeless were dismissed as "bleeding-heart liberals.”

Getting Rid of Unions

The dog-eat-dog mode also became prevalent in business and industry. Where previously corporate management would at times be annoyed by the ways of unions, management now fought to destroy unions where they already existed and to snuff out anyone who dared to start unions in places that had none. The annihilation of the air traffic controllers' union by the Reagan administration is a key example of the destruction of a union. Wal-Mart's hostility against the formation of a union presents a perfect example of how a corporation prevents employees from having a collective representation in the first place.

Corporate Raiders Take People's Retirements

But dog-eat-dog behavior became commonplace not only between the haves of the corporate world and the have-nots outside of it, it also became the keynote among corporations in dealing with one another. Before the mid-seventies there were few if any hostile corporate takeovers. Such takeovers were no more acceptable than stealing gardening equipment from a neighbor. Now a company would take control of another simply to get the targeted company's assets, and if an employee of the acquired firm lost his retirement as a result, the loss would be recorded as nothing more than a victory for the bottom line of the raiding company. By any standard of decency, before this time taking people's retirement money would have been considered nothing less than an act of theft. In the gangland of corporate competition, however, it was now considered to be nothing more than well-earned spoils going to a well-deserving victor.

Eliminating Cost Factors

Today, the rich and/or famous have become role models for the population on the whole; anyone wealthy is considered more worthy of respect than anyone less so. In the never-ending quest for their version of “greatness,” the world's greediest stop at nothing. And this is the source of America 's economic decline. In an endless pursuit of money, corporate captains look for ways to cut costs benefiting only themselves, their peers and investors. How? By simply acting as if employees, regardless of how long they have been with the company, are nothing more than expenses, and they feel they are doing the world a service as they eliminate these "cost factors” by sending American workers' jobs and equipment to China, India or the Philippines. Having done so, corporate officers take millions and millions in salaries and bonuses. To add insult to injury these executives are treated like stars by business and investment media.

Building Mansions

What does the monied elite do with the cash they save by laying off American workers and replacing them with quasi-slave labor in China ? If they don't use the money to buy up other companies where the same cycle is repeated, they use it to build themselves ever larger mansions, or they place the money in overseas tax shelters, cheating the American public out of much-needed tax revenues.

Fewer and Fewer Jobs

Now what about the employees who are out of work? A small minority is lucky enough to get new jobs. During the past eight years there have been other “lucky” ones who could survive because they could get home equity loans as long as the real estate market continued to go up and up--until it collapsed. Others kept looking for jobs only to find out there is no work because most other companies are also sending jobs out of the country. The result: Fewer and fewer jobs and fewer and fewer houses bought. The job market collapses, so does the real estate market, and people who were living on borrowed money suddenly find that banks are demanding that they pay up. Without cash reserves they either end up with a foreclosure or a bankruptcy or both.

When the Money Runs Out

How do people manage without an income? Some rely on unemployment benefits until they run out. Then they exhaust their cash savings. Next they empty out their 401k retirement accounts, and when these last reserves are gone they move in with friends or sleep on the couch of close or distant family members as long as they are welcome. And in the end they have no choice but to sleep in cardboard boxes on the streets. Can the government help them out? As long as there are funds, federal, state and local governments can create jobs through programs like public works projects or through the improvement of existing services. But governments lack money because the people who were laid off no longer pay taxes, and without taxes government cannot do anything.

So how do we cope with fewer and fewer people having an income? If anybody could help it would be those on top of the pyramid, the rich and the very rich, including the same corporate chieftains who have given themselves eight figure annual salaries while cutting their employees' jobs.

The Rich Give Advice

But when asked, mighty money-men tell politicians that they shouldn't ask the rich to give up money to put the economy back on its feet. Stop government "giveaways" to the poor, they say. Cut "entitlements" like Medicaid, housing for the poor, subsidized bus service etc. They point out that they, the executive class, succeeded in becoming more prosperous by reducing costs by cutting salaries and benefits of lower ranking staff. Government can do the same! All that is needed is to stop "handouts" to the needy, the losers that lost because they did not "measure up?"

The prosperous may mean well, but as misery spreads and more and more become anonymous and homeless, it becomes impossible to take anything from those who have nothing. Maybe you could save money by stopping the food stamp program or by refusing emergency medical care to the uninsured, but could you get enough of the public to accept increasing numbers of people dying of disease and hunger in the streets?

Can the Rich Do with Less?

True, not all of the prosperous are hard-nosed conservatives--there are some "bleeding-heart liberals" among them-- but most may not want the one workable remedy that could put the economy back on its feet. They don't want to see that the only way to turn the economy around is to tax those who have money. You cannot get taxes from the middle and lower strata. They have been squeezed to the limit. True, as those who have plenty always want more, it may be painful for them to have less. While it may hurt everyone to give up anything at all, is it more painful for one with twenty million a year to give up eighteen than for a family with less than ten thousand to lose the roof over their heads?

After the Fire

But it is an illusion for the wealthy to think that the decline in living standards of the general public will not affect them. Once people have given up health-care, police and fire protection, it is doubtful that the privileged, living in their enclaves, will be spared from the worldwide pandemics, rampant crime waves or merciless fires raging out of control that are likely to occur. Dwellers of enclaves may realize they are still part of the larger community. Imagine yourself as one of those dwellers. Imagine you have a home and a major fire has broken out. When the fire has ceased to burn, you learn that all homes but your own were destroyed. Though you are happy your place was saved, would you enjoy looking at the charred remains of your neighbors' houses?