by Chris James
*With apologies to Ralph Blane.
Paraphrasing Richard Nixon, I hereby publicly declare
that: "I am not an economist." Yes, I admit that I am
pathologically obsessed with the brilliant, weekly magazine, The Economist.
But I do not sift the sustenance of my columns from this potentially
abundant resource. No sir. But I may occasionally use it to support
my literary wanderings, as circumstances dictate. And that's about it. So, what am I about to do here? Answer:
To take an ignoramus' dive into the Stygian pool of what is - or should be -
making the U.S. economy tick today. And to throw in a soupcon of
historical hot sauce, just for the hell of it.
This intention stems from the recent torrent
of yowls and howls about "bringing jobs back" and "America first,"
blah, blah, blah. The burning torch and pitchfork mob rages at a number
of unspecified countries for taking jobs away from innocent, red-blooded
Americans and, by golly, we're going to go right out and bring those jobs back
home - where they belong. And, naturally, I am confident that our wise,
sensitive and alert government is already training a couple of million out of
work individuals to seamlessly assimilate these tasks at a moment's notice and
then to match, if not exceed, previous off-shore productivity. All of the
new capital equipment, resources, and facilities necessary to begin immediate
production in the U.S. will be satisfyingly in place - at a trivialized cost.
In which event, overall (fake) costs of the re-established
operations will be lowered, and U.S. consumers - a pillar of the U.S. economy -
will benefit healthily from the change.
Yeah, right. In reality, any mindless
implementation of such a strategy would trigger near-titanic economic, social,
and political mayhem. Not just in the U.S., but also in the countries
that are left holding the (empty) bag. Just so you know, the U.S. has a
negative balance of payments with many of these countries. That is to
say, we owe them for goods and services that they have provided. If we
dump them, then it'll be no more nicey-nicey on their part. They will
want to be paid what we owe them. RIGHT NOW!! If, for no other
reason, than to cushion the resulting negative economic impact of lost jobs and
idle capital equipment imposed on their jurisdictions.
The victimized nations are also going be
highly motivated to cash in any U.S. government debt that they may be carrying.
And where would our government get the money to pay off its share of this
Great Flood of called-in I.O.U.s? Certainly not from the government's
usual trick of raising funds to pay off debts. Namely, their Ponzi scheme
of issuing more debt to satisfy their current debt repayment obligations.
With the catastrophic consequences of this utterly misguided
bring-home-the-jobs strategy on full display, nobody is going to trust the U.S.
Especially the financial markets, where there will be little or no trust
in whatever financial instruments that our government can conjure up to try to
bail us out. Remember the financial debacle in Greece? Luckily,
they were bailed out by the European Union. Any volunteers out there to
help the good ol' U.S.of A., as we thrash around in that same kind of
quicksand?
And the situation could get much worse.
But since it's the Season of Happiness and Good Will, then I won't lay it
on any thicker. Instead, I would like to celebrate Trump's heroic action
over at Carrier as a timely and delicious metaphor for exactly the wrong
approach. Now, don't get mad. I'm fully aware that there is a human
cost. Focus, instead, on the abstract metaphorical dimension. To help you do that, allow me give you a hot
sauce, actual data, wake-up call. A recent massive study by Ball
University Business College determined that loss of jobs in the U.S. - some of
the data going back as far as 1997 - was 88% due to technological changes in
the U.S. and only 13% due to jobs being transferred off-shore. Yeah, I
know that it doesn't add up to 100%. One person rounds up, another rounds
down - it's a cup half empty, half full, thing.
Therefore, not only is Trump's objective
barking up the wrong tree, but - Holy Toledo - his strategy is also open
to suspicion. Because, as the erudite Mr. George Will deftly pointed out,
government interference in the legal management affairs of private sector
businesses is a bastion of Socialism. It originated with Karl Marx's call
for governments to "take over the means of production." And lo,
Comrade Trump is now revealed as a practicing, closet Socialist!
Arch-socialist Bernie Sanders must be wetting his pants with laughter.
Hopefully, Trump's outlandish performance is a one-off publicity stunt
and is not a foreshadowing of a second Manchurian Candidate presidency in a
row!
The totally dominant role of technology in the
economy is exactly the way it should be. Ever since the Industrial
Revolution began in Britain around 1750, the transition of technology replacing
labor has been paramount. Costs go down, consumers benefit, the economy
thrives. Standards of living rise, which inspires further capital
investment in the economy. This cycle is one of the bed-rock foundations
of capitalism. Of course, displaced workers in industries undergoing
technological change may suffer. But it is the job of the government and
of corporate leaders to ameliorate that suffering. Not by bringing lower
tech jobs back into the country, but by training and retraining the work force
to higher skill levels. This will be harder to accomplish with a 50 year
old worker than with a high-schooler, but it is better all round to provide the
older, non-transposable victims with a reasonably comfortable, pensioned life -
richly deserved - and then to focus on the upcoming generations in an
well-planned, coherent fashion.
Obviously, not everyone can be trained in the
mysteries of "technology." Not everyone will want to be.
Frankly, not everyone is up to it. But the technological nucleus
must be protected and continuously nourished. It is the vital inventive
engine of the economy. Not just in the form of R & D, but also in its
pragmatic application to manufacturing - a bountiful field where inventiveness
can pay off. Then there is the service sector - the biggest in the U.S.
economy. This sector exploits much of the technology embodied in
manufactured products. For example, think data transmission, manipulation,
and storage. And the multi-million-employed service sector covers a vast
range of jobs. A colleague succinctly gauged the size and importance of
the service sector in a simple, non-condescending phrase: The world needs
burger flippers too.
Clearly, the Holy Grail that allows the United
States to sustain its position as a world power - perhaps THE world power - is
to stay ahead of everyone else technologically. Not just for military
reasons but, equally important, so that consumers can benefit from an on-going
improved life-style. Beating a dead horse, I reiterate that raising the
standard of living equates to consumers playing their vital part in stimulating
the economy. Yet, if we still have to transfer some manufacturing
capacity to off-shore, low-cost countries, then let it be today's, or yesterday's,
technology. Our country must maintain the freedom and the supportive political
climate to routinely get ahead - and remain ahead - of the technological curve.
For U.S. business this is, indisputably, the glory road to "Making
America Great Again." Returning second-hand manufacturing and
been-there-done-that technology to this country is not. Indeed, a more
appropriate slogan for Trump's risky jobs strategy is: "Moving Forward by
Going Backward.”
