Detroit is the hole that Mike’s Steam Shovel Dug

Who here remembers the story about Mike Mulligan and his steam shovel? Detroit’s problem is like Mike’s. Mike’s steam shovel, Mary Anne, wasn’t as nifty as new diesel shovels, just like land-locked Detroit auto plants were not as nifty as new, single story automated ones. But Mike vowed to work hard building a basement hole for city hall, so he and Mary Anne got the job. They dug a great big hole but with no way to get out of it.

Detroit dug a big hole with no way out too! Everything Detroit did to help herself didn’t slow the hole getting deeper, and her city hall was left with a dilapidated steam shovel in its basement. Detroit’s impossible hole is that it needs good paying jobs for its illiterate citizens….period. It’s that simple and that difficult.

As auto jobs left, whites left with them. Blacks could not qualify for federal housing loans because of federally supported racism and could not enter communities built up around the new plants because of restrictive covenants. So the low level jobs that the auto manufacturers allowed them to have went away.

Now, they were left in the city with poorly supported schools with few good paying jobs. Crime got worse. Family situations got worse. Home values plummeted. City revenues dropped. And as the city blight worsened while the outer suburbs improved, new businesses chose to build in growing, safer areas rather than in the city. Dig, dig, dig…

The diesel shovel jobs that competed with Mary Anne steam shovel, those jobs that illiterates in the inner city of Detroit, 47% of her citizens by some accounts, could qualify for, they are growing at 10% per year in Eastern countries but paying well less than the mandated minimum wage in Detroit.

America created an economic infrastructure that produced generations of illiterate Detroiters. Our failure to face institutional racism kept our most oppressed of citizens corralled in the city. Our elites took away jobs that illiterates could have worked. Now, our latest generation of Detroiters sit in a basement hole with no chance at earning a living wage as an alternative to crime and dysfunctional communities.

In the story, “Mike Mulligan and His Steam Shovel”, because he was stuck in the hole, he created a living wage in the hole by converting his steam shovel into the new city hall furnace, making a living wage to provide the city hall with heat.

America, having created this impossible hole, must now create living wages for our tens of thousands of illiterate unemployed, and we must vow to create a future economic infrastructure that does not dig such impossible holes. Political intransigence must now make way for a willingness to fix the problem.

I wrote an article in 2011, explaining the mechanisms of job transfer to Asia that is worth reading, Called How China Ate America’s Lunch…

http://www.zerohedge.com/contributed/how-china-ate-americas-lunch

China was ready to take back its world leadership in 1978 after “150 years of shame” and America’s elite were all too willing to sell out our posterity to help them. Detroit’s bankruptcy was foretold by the decimating our middle class to fund China’s emergence.

Yet, just as was seen in the Arab Spring, it is the fringes of society that break first. While the whole of our middle class is having its life slowly drained, those poor souls on the outer edges, such as our citizens in the inner city of Detroit, are the ones whose life supply of economic blood is the thinnest. They die first.

Detroit is America’s problem to fix.

My Tale of Two Cities

It’s time for a fairy tale, so pull up a chair and I’ll tell ye me yarn… Once upon a time there existed two great tribes in all the world. They were sworn enemies because of generations of bigotry and fear. They built their civilizations in lands far, far away from one another. Yet many wars occurred between them because of their fears and greed.

If each had desired to ensure that both became prosperous, then neither would have gone to war with the other and neither would have needed the protection of warriors. But the world did not progress nor will it ever much, for that is the nature of man.

Each tribe therefore kept great armies of warriors and made their greatest warriors king. Each king created coins from shiny metals to aid his people in trade and commerce. Each king also divvied up his lands according to loyalties and kinsmanship. Some tribesmen received vast estates, but half of the tribesmen received no land at all.

Upon their vast lands, the most favored of tribesmen aspired to expand commerce and to increase their lands further. With land as collateral, vast landowners were given coins by the king to spur the work of others on their lands.

Whenever a tribesman was deemed ready and able to provide future labor, he was provided coins through debt contract to purchase goods from other tribesmen. Metals bound the work of each tribesman to the benefit of the vast landowners, to the king, and to his kingdom.

The king and vast landowners expected each able tribesman to do all manners of work for the tribe. Those that contributed most received the most coins and could therefore live most comfortably within the tribe. However, provisions were made so that all tribesmen who worked diligently could eat and have shelter, for this was the other side of the coin of man’s nature.

For those tribesmen that could not work enough to feed themselves, other tribesmen were commanded by a vote of all tribesmen to share their wealth so that each might eat. Through this vote, the kings endeared their subjects against insurrection, for all men were better off in their kingdoms than in facing the world alone.

This is where the similarities between the kingdoms stopped. For one kingdom became very prosperous, well before the other. One kingdom was wise to invest labor in schools, roads, and laws to govern commerce. Over time, because of its investment, some ingenious tribesmen were able to capitalize the tribe’s investment through their own ingenuity to create much better means of commerce, and they became wealthy in coins.

They accumulated many more coins than they could use, for even when they lavished coins to obtain the finest huts and goods, they still had stockpiles of coins. They found with so many coins they did not need a king. So they set about to use their excess coins to grow great armies of warriors to break free of the king, to form an empire, and to colonize the other tribe, for this was still the nature of man.

They then forced the other tribe to take less gold for each hour worked and to accept less goods in trade. They forced the other tribe to dig for raw materials, while keeping the skilled trades to themselves, claiming these labors to be worthy of more coins.

After many generations, a calm came over the lands of the two tribes, and many forget the true nature of man, that of bigotry and fear, lust for power and enslavement of others. Assuming the world had evolved to a peaceful existence, the vast landowners and ingenious men of commerce found that they could employ the colonized tribe for many less coins. So, instead of using these coins to employ their own tribesmen, they gave fewer coins to the other tribe in exchange for labor, and slowly the colony began to prosper.

But in transferring coins to the colony, the vast landowners and ingenious men of commerce idled their own tribesmen. Skills were lost, assets were obsoleted, and the empire slowly withered. Little by little, more and more tribesmen could not earn enough coins to feed their families. Fear and mistrust overtook the once great civilization.

The vast landowners and ingenious men of commerce had made great profits from the colonized people, but in so doing, they impoverished their own tribe. Their choices stressed the coffers of taxation. Empty coffers brought into question the very nature of the empire’s commitment to its people. Too many needed fed.

Vast landowners forgot that they had been given their land by virtue of their kinsmanship. Ingenious men of commerce forgot that they were able to capitalize their ingenuity on the infrastructure provided by the investments of others. And all of the empire’s elite forgot that the darkest nature of man can ultimately only be suppressed by warriors.

Over time, the empire withered and the colony continued to prosper until it was more powerful than the empire. The colony then refused to accept less coins for its labor. And it refused to help fill the coffers of the empire that were now barren. After a generation had passed, the colony became the empire and the empire turned colony. Now a colony, its people were given less coins for their labor by the colony turned empire.

Where once vast landowners and men of ingenuity had grown their stockpiles of coins, they now found in a mere few generations more that their stockpiles of coins were gone. They had foolishly squandered their inheritance. They no longer could afford their warriors and accepted their fate in watching the nature of man rise against them.

Solving America’s Energy Needs Will Take Better Government, Not Less Government

We search for systemwide solutions that will minimize the cost of competition and that will maximize each citizen’s contribution to society. Many suggest that we eliminate government from the equation and let perfect competition work its way through the economy so that all will have the opportunity to contribute. Yet, America has anything but perfect competition.

The reason Thomas Paine’s pamphlet was so important to the Revolution was that it laid out in clear, laymen’s terms the true purpose of government in the evolution of society to be that merely as a representative extension of man through a larger society and not an ordained right of an individual to rule other men.

It was inspired by and dedicated to the writing of James Thompson’s “Liberty” that exclaimed society should not exist in the extreme of every man for himself. This is to a greater or lesser extent what we have today, built on the economic structure of imperfect capitalism. Why imperfect? many reasons….

One involves our energy system. It’s history is anything but perfect competition as you may know. In the beginning, utilities were something of wild west type competitors. Some emerged through mergers but most went the way of petitioning government to set up regulated monopolies to avoid duplication of assets. What then developed were cost plus entities that served local geographies. Some made better economical choices and were better run than others, resulting in much lower costs to their customers than might be experienced just 50 miles in either direction

And grids were designed to manage a local infrastructure as well. For protection against blackouts, utilities connected to each other and began to devise ways to allow physical power to flow between utilities, but the emerging transmission line structure was haphazard and contained many bottlenecks.

Much later, within the past couple of decades, a means to sell excess power to other utilities as a profit center developed, but it was hampered by several physical and political realities. First, power flows through least resistance physically and not by how utilities sell it. Therefore, there are few financial reasons to fix bottlenecks to the grid. Second, utilities are not purely for profit, they are cost plus, and do not have real competitive reasons to optimize profits, only to ensure they make annual targets to meet dividends and to allow the regulators to grant further expenses to continue building and expanding the utility. Therefore, the nation’s true supply optimization does not occur in a regulated environment.

And with such a regulation hindered system, no utility has the economic incentive to build electric grids to areas that could house wind or solar farms to sell to other utilities. And no utilities have the regulatory incentive to buy from such an economically optimized, national asset. For their incentive is not to optimize profits but to meet barely and consistently their annually set, regulated cost targets so they may increase next year’s costs and gain additional “plus” for their investors who invest for the consistent dividend returns.

America is not designed for perfect competition regarding a major segment of our energy needs. We have been hamstrung by government systems of regulation from the beginning and no outlet exists to fix this monstrosity but by redesign of the government infrastructure.

These are the simple facts that cannot be covered up by free market rhetoric. Every problem must be managed within the complexity of a systemwide solution set that pursues societal optimization.

America Should Put All Assets on the Table for Taxation

I wish for society to be as free of government as is can be, that government be limited to those functions enumerated in the Constitution such as providing for the national defense.

National defense – what is it? America is a group of people clustered together by geography under a common set of laws that we have crafted over time for the protection of our rights from attacks by outsiders and insiders. We have a common economy that provides for our people and a common military that protects us from state led, organized attacks. We have a judiciary that protects us from overt abuses of our laws by our executive and legislative branches. We have a common legislative branch that should strengthen our other institutions through commonly agreed upon laws of engagement for the national defense of our people and an executive branch that acts upon these laws fo our common defense.

How well is our government performing its duties of national defense? Our defense of state organized attack is from another era. Our defense of terrorism has overtaken our liberties. Our defense of attacks on our infrastructure, such as against nuclear and cyber attacks, is in its infancy and struggling for balance. Our three branches of government have been commandeered by America’s elite to provide for their defense against interference from the rest of our society.

Is the middle class defended? Is the working class defended? Are our unemployed and underclass? What is the balance that must be obtained in a defended society?

Some argue that Government is too big, that it takes too much of our money to manage this leviathan. Certainly, our government has too many people and assets and these are costly. But cutting the size of government is only a drop in the bucket compared to the excessive costs of our programs and regulations, and thus cutting the size of government will do very little to curb our deficits and lessen our debt. It is not the size of government that is at issue but the size of expenditures that have been agreed to by past legislators and that have been enacted by past executive branches. It is the size of our agreements that is bankrupting our country. More than anything, we must prioritize cost reductions and government must not be cut to the point of disfunctionality in the process of cutting costs.

Once America’s spending priorities have been readjusted to fit our abilities to pay and our government has been resized to manage those priorities, those priorities and the new size of our government still has to be paid. We still have to agree how each of us will contribute to the funding of our government. Each of us has assets that can be taken to pay for government. We have assets that were purchased in previous years and assets that have been acquired in the current year. We have assets that have been made through investments and assets that have been given to us as compensation for our labors. Some of our assets are liquid and some are hard assets not so easily converted to money.

Government must now come together to represent the people in deciding which of these assets will be assessed for taxation. The best we can hope is that our legislators are balanced in their representation of the people. Who of us believes that regarding economics, our legislature is balanced in representing all classes of people?

The largest of our nation’s costs are military and social safety nets. Both of these costs were agreed to by past federal legislators as the best compromise, given the structure of our society at the time. Our military was structured for hegemonic offense, to thrust America’s economic interests abroad. Our social safety nets were structured to care for those of our citizens whose labor was set aside to maximize the profits of capital owners.

Fast forward to today. Our elite’s financial interests are in even more need of hegemonic military protection, as a much greater percentage of their assets are abroad. Even more of our citizens’ labor has been left idle by their decision to invest abroad, and now our social safety net program costs are excessive. We now balk at having such high government program costs, yet we are unwilling to cut or hegemonic military or to bring back investment to employ our citizens. So instead, we sit stupefied watching our legislature do what we expect them to do, stall on our behalf.

Now, our elite wants to cut the costs of social safety nets that are caused by foreign investment and our poor want to cut the costs of our hegemonic military that exists to protect those foreign investments. And if neither will budge on cuts, then each wants the other to pay for the excessive government program costs that we will incur.

However, the economics of America are driven by the investments of our elite. If America’s elite choose to situate their assets in foreign lands rather than in domestic businesses that will employ our people and that will minimize safety net and defense costs, who then should be responsible for covering these costs? Are my words socialist or are they simply recognizing that every economic choice has cost consequences?

I am not advocating going back to the days of kings, back to the beginnings of our nation, when America’s lands were given to the elite families of America by the crown, and restructuring them to give all an equal share, nor of reconfiguring the lands taken from indigenous peoples and given to the governors, financial, and political elite of the time. I am not advocating correcting these historical manmade injustices.

However, all men should have a living wage and our national defense calls for maximizing the outputs of all in our society through the investments of our elite that have been given the blessings of historical circumstance as well as those that have made their fortunes nurtured within the defensive infrastructure of the United States.

The elites’ assets are mostly in excess stores of value, above what are required to live and to consume. The middle class have assets that were mostly created through their labor, 0-3 years worth of labor in liquid assets and a house, maybe two. The working class might have a home and few liquid assets, plus current assets from recent labor. The underclass have few assets to speak of. Which of these assets will be taken to pay for the requirements of government?

The vast majority of assets that America owns are left untouchable by government. Why is that? Is land that has been in a family since it was bestowed upon them by the King of England any more valuable than a dollar that was made by the sweat of labor in 2013? If a working class man has no assets but $5,000 in a bank made by his labor this year, why are those assets what should pay the bulk of the nation’s governmental costs while the assets of land in a 50,000 acre estate are deemed off limits?

Do I want the government touching any of my assets, or those of the laborer with $5,000, or the American lord with 50,000 acres? Well I realistically know it must to function. If it must, are any of these assets more sacred than another? Why is it that we have conditioned ourselves to accept that recently acquired assets are acceptable to tax but those that have been in a family for centuries are not?

The argument has been structured so as to only compare recently acquired assets, for to look at all assets would be to see how amazingly imbalanced ownership of assets is in America. My proposal of taxing only assets that are not being productively used in the economy, while impossible to enact, is intended to break through this manufactured paradigm. Whether America has a flat tax, a fair tax, or a progressive tax, we should compare all assets, not just those recently acquired. And we should not create false paradigms that differentiate between that were acquired through investments, those acquired as payment for the use of capital, or those handed down through generations from the King.

America’s Skewed Economic and Political Systems Can be Righted by Divine Law

My life experience is that if you take a snapshot of what is occurring and it does not make sense then something is askew. Life balance occurs when life is working toward a laudable goal. Yet the direction the United States has been taking is not laudable. Something is amiss. Most of Americans know it.

So we know America is not well yet we do not look holistically at our systems to define the illness. This has been the purpose of my writing for the past two and a half years, to reach the inner workings of our systems and to understand the imbalances as they relate to each other. From this vantage, I have written my perspective of the path that America can follow to heal herself.

I have found no better economic system than capitalism in my search, for capitalism works with man’s nature to find balance, one man’s interests against the other’s. And when capitalism is rooted in a political system like America’s Republican form of government, it is even more stable. America’s Constitution was created to force stability amongst the classes and to ensure that neither wealthy elites nor poor mobs could easily take from the other using the law of the land.

Yet the Constitution was flawed in that its founders were not able to see all men as truly equal and so we struggled through the Civil War and the Civil Rights movement, resetting the boundaries of the Constitution through great sacrifice. In the process of our social reforms, we found that the economy also suffered greatly in large system cycles that engulfed the smaller business cycles. These larger, implosive cycles seemed to create crises every three generations or so.

These economic upsets were driven by America’s unique mixture of our form of capitalism and Republicanism that failed to curb man’s nature from greedy excess. So we struggled through the Long Depression and the Great Depression. FDR dragged the country left during the social reforms of the Great Depression, yet some of those leftward movements were necessary to curb the ills of capitalism. Financial reforms were installed that gave hope to disrupting the greater implosive economic cycles that had kept wreaking havoc on America.

Yet, from the Depression, the pendulum of affairs swung too far left and the power of unions became excessive. While their impact in assisting America’s racist institutionalism was great, their disruption to our economic system was too rapid and threatened America’s elite too greatly to lead to a stable conclusion.

Coming out of the 20th century wars, the world appeared America’s economic oyster. America seemed for the moment the hegemonic leader of the world. Rather than deal with the social disruptions occurring in the United States, our elite changed America’s laws to allow investments around the world (America was not unique in this regard. We raced East with the rest of the Western first world nations, similarly to how the Western world had rushed into colonialism prior to WWI)

The resulting rush to worldwide corporatism began to gut America’s manufacturing base, a base that had provided living wage jobs to millions of America’s working class. Without that base, many of our school children lost their incentive to continue. Our cities began to crumble from within. Crime rose. Debts rose. Unemployment rose. Our intertwined systems of capitalism and republicanism began to unravel.

Whenever, a complex system begins to fail, choices are made to either improve its health or to provide patchworks to keep it moving along. America chose patchworks. We were, of course, the world’s hegemony and the world’s money system relied on our dollar as its reserve currency, so we had ample capacity to take from the world to keep our patchwork economy going even as we gutted the sound economic system that had made our country strong.

So America skewed our financial systems and we skewed our political system to allow the skewing of our economy. Our system kept failing and being repaired by patchworks until the failures took on crisis dimensions. Just before the 2008 implosion we had the savings and loans crisis and the stock market crisis. Finally, we skewed both so much that both our economy and our political system finally broke under the weight in 2008.

A snapshot now of our economic and political systems has most Americans dismayed. We point to one faction or another as the culprit, yet our system has been under patchwork for decades. I wrote my last post denouncing the position of America’s elite, yet what about the static positions of the rest of our factions? A nation held together by patches can only arrive at this condition because all have accepted the patches leading to America’s skewedness rather than fighting to set our nation’s course anew.

Certainly, capitalism has always gone in cycles to permit the world’s elite to suffer the extremes of greed, and without corrections to capitalism the world’s implosive three decade cycles will continue. My admonitions in the last post, however, were not an indictment of America’s capitalists or of capitalism, only a pronouncement of our nation’s current skewed position that includes within it the excesses of our elite, which must be heartily corrected.

Sometimes, calling out the horridness of a static position must be done to wake up all that have accepted the patchwork, including our elite. Now the corrections of peeling away the patchwork and repairing the nation’s infrastructure will not be easy. And my advice to America is that the corrections must keep all whole including our elite. Allow our elite to reinvest in America and make a healthy profit. Bring back living wages. Repair our schools. Correct the imbalances that create crime and unhealthy communities. Restore America’s path toward prosperity.

Power has Corrupted of America’s Trade Deficit

Power is the drug that urges America’s elite to enslave America’s workers into borrowing $7 trillion dollars to buy foreign goods during the past decade while our robber barrons have idled our workforce. What corruption is this that is placidly accepted by our downtrodden citizens? Why do we accept the wealthy elite of our country stealing from the poor through trade deficits?

America’s trade policies have amounted to taxing the average family about $100,000 since 2000, reaching into the pockets of every American, pulling out thousands of dollars and giving them to America’s wealthy and their trading partners. That is the definition of power, raw and corrupt. Yet, through this slight of hand, our elite, including America’s federal politicians who bow to their whims, make it seem to the average American that the robbing of the middle and under class through trade deficits has been to our benefit!

Divine law starts with every man earning a living wage. Those with more talents and that can provide more to the community should earn more, yet all in America should start with a job that can feed their family, put a roof over their head, and shoes on their kids feet as they go off to school in safe neighborhoods. Instead, our robber barrons have seen fit to ensure that a third of Americans either do not work or are working poor while forcing our citizens to borrow from foreign governments while buying goods made in foreign countries by their citizens, not ours.

Power has corrupted our economy. Power has idled our workforce. Power has crippled our schools and filled our prisons. Power is the drug that deadens our elite to the plight of our citizens. Its tentacles reach throughout our institutions. Its poison weakens our communities. Its evil threatens the stability of our society. This imbalance of work, this idling of our nation is not a natural occurrence. It is a choice by our elite through the corruption of power, and it is an abomination of divine law.

Divine Law Suggests Technology Cannot Obsolete Labor, Only Direct It

Some say that the age of capital has arrived and that technology has made the labor of the high school drop out obsolete. It is this argument then that supports the idea that uneducated laborers should be paid a wage that does not sustain life. Yet the vast majority of the world does not exceed this poorly educated standard of learning. Are we saying then that the majority of the world should not exist? The creation of computers, while making the world vastly more productive, has not yet made mankind extinct.

The ability of a country to lift its people through education determines its ability to compete on the economic frontier of the world. The fact that only 4% of Detroit’s eighth graders can pass basic knowledge tests in math is an indicator of the abysmal condition of America’s system of preparation for competition on that economic frontier.

Yet, whether or not we are adequately preparing our nation for the leading edge of national production, we still are producing more humans. These humans have value, a value that is economically determined by our ability to educationally prepare them, but that has value nonetheless.

America continues to replace human capital with machinery and computers to compete with other parts of the world that still uses human capital at a much lower price. America has seen fit to add $15 per hour equivalent through regulation and set a minimum wage of $7.25. With our artificial barrier of $22.25 in a world with a median income of less than a dollar, technology must prevail.

Yet those are artificial barriers we set for ourselves that drive labor decisions in America. Therefore, we are content to give on top of those barriers an additional equivalent of $13 per hour to every citizen that we keep sidelined and unemployed. It is our artificial barriers that attempt to create obsolescence. However, even if we removed the barriers and reformed our abhorrent educational system as we should, America would still have a segment of our population unable to rise to the levels of knowledge required to compete for those jobs that are left with our $22.25 barrier.

Are we then divinely just in letting American labor sit idle while millions provide similarly educated labor in other countries to supply us our goods?

There is strength in Biblical verses about work. Several contain the context that men must work to eat. For instance:

1. Thessalonians 3:10

“For even when we were with you, we would give you this command: If anyone is not willing to work, let him not eat.”

Now if the Bible says if anyone is unwilling to work let him not eat, then if follows that if they are willing to work then they should eat. The laborer is not the owner of the work. The master of the work is the capitalist that has provided for the business owner.

1. Timothy 5:8 states:

“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.”

How could God allow the servant of a master’s work to become an unbeliever and deny his faith because he cannot provide for his relatives simply because the master of the work does not provide a living wage? If God commands a man to work and to provide from that work for his family less he be deemed and unbeliever condemned to Hell, then God must want for this man to earn a living through honest work.

Ephesians 4:28 says:

“Let the thief no longer steal, but rather let him labor, doing honest work with his own hands, so that he may have something to share with anyone in need.”

Yet, we turn our backs on our failing schools, condemning millions to a life unprepared for honest work. We then turn them to the streets where high school drop outs and failed students cannot earn a living wage, and we force them into making a poor choice between public handouts and lives of crime.

The idea that a man can condemn another to work for wages beneath his ability to sustain life has been tread out through the ages and always ends in fallen governments and revolution. The Arab Spring happened because the world’s economic implosion brought food prices beyond the reach of North Africans. Just because men can lower wages below livability does not mean that God supports their power.

For the scripture of 1 Timothy 5:18 says,

“You shall not muzzle an ox when it treads out the grain,” and, “The laborer deserves his wages.”

The Bible is replete with verses that support the concept of work equating to a living wage. It certainly does not state that the laborer will become wealthy from his toil. Yet, it does support the idea that man should be provided through his toil his needs so that he may come to God in solitude with good prayer.

If this is so, then our leaders are called to come together to determine how all can earn a living wage through a community’s toil.

For America’s Worsening Joblessness, Detroit is the Canary in the Mine!

Why is it that out of 245 million working age people in America, only 143 million are actually working? A good percentage of ‘non-working’ adults are those that care for children in the home.

According to a 2012 Forbes survey, 1 in 3 working age women stay at home with their children. 1 in three of working women that have children resent their husbands for not making enough to allow them to stay at home. 84% of working women with children wish they could stay at home. Stay at home dads make up 176,000 of the population.

With the addition of women to the workforce, the overall percentage of Americans working increased from 59% 1950 to 67% in 2010, with women gains displacing men in all age categories, and especially in youth and over 55 age categories.

From before WWII when 19% of women entered the workforce, the percent of women participation grew to 67% through 2008, the recent job implosion. During that time, men’s participation actually dropped from 88% to 73%. The majority of percentage men’s employment drop was in youth and over 55 age categories. But, even in the men’s prime 25-45 years, men lost about 5% between 1950 and 2010.

The effect of such labor shifts was to reduce labor costs, shifting wages from men who still enjoy a 20% wage differential, and older workers who also are paid more for similar jobs, to less paid women and younger workers.

Of America’s 245 million eligible workers, why are only 143 million working? The numbers break down:

Documented Workers………………..143.2
Stay at home parents……………….….40.3
Unemployed……………………….………….19.2
Disabled………………………….…….………11.0
Welfare……………….………….………..……5.0
Undocumented immigrant workers..5.0
Organized and career crime…………..5.0
Investors…………………….……………..…..4.0
Incarcerated…….………………….………..2.3
Homeless…………………………………..…..1.0
Institutionalized………………….……..…0.3
Slaves………………………………………..…..0.1
Dropped out/opt out/barter………..…8.6

Arguably, the level of other categories that should be employable such as the ballooning disabled population and the doubling of incarcerated individuals is substantial. However, the combination of unemployed and dropped out is double what was the case prior to the job implosion and investors’ transfers of jobs overseas.

Adding a reasonable number of the above categories, say 19 million unemployed, 5 million disabled, 5 million welfare, 1 million incarcerated, and 5 million dropped out, we have 35 million Americans that would want to work if there were jobs for them. In addition, of those that are working, 25% of American workers earn less than $10 per hour and 47 million are on food stamps.

Of those the 8.6 million workers that have lost their way, typically older or less educated that have long since stopped looking for any job, unlike in decades of recessions past, they have no jobs for which to return. Their forgotten lives will be the monument of America’s era of international capitalism.

When I visited the salt mines in Krakow Poland, they symbolized the tour with a mine canary. Canaries are more sensitive to mine gases and die before the miners are affected. They say that Detroit is the canary in the mine of the United States economy and that what happens to Detroit is a symbol of what is to affect us all.

Detroit is sliding into workless oblivion. We watch as the state of Michigan rushes in to chop the city up. Instead, America should be shouting for action to reverse the city’s joblessness before the canary dies. We are all continuing to slide into a workless oblivion and the canary is just trying to warn us.

The Fed is continuing to keep the slide from accelerating, which is temporarily a good thing. The same catastrophe that Detroit is dealing with now would be happening in other parts of the country if it were not for the Fed buying stock to support the pension plans of public unions around the country. Housing would have continued to slide if it were not for the Fed purchasing excess housing stock.

We are not adding enough jobs to make up for population growth. We are stuffing excess joblessness in other categories. For those jobs that are created, we are subsidizing them with food stamps and other ballooning welfare programs.

Will we decide as a nation to choose another path? Will we implement system wide strategies that bring back working wages? Will we slow the slide of the disintegrating family? Will we return our schools to priming our businesses of the future? Will we reverse the scourge of crime on our communities? When will we reach out in support of Detroit?

Disability Has Decreased Our Unemployment from 10.2% to 7.5%!

Unemployment exploded from 4.7% in 2007 to a high of 10.2% in 2009 before falling to 7.5% this month. Our government would have us believe that America is slowly on its way to fixing its joblessness problem. Yet, between 2009 and now, the percentage of Americans working has actually dropped from 59.8% to 58.5%!

Down from 63.7% before the economic implosion, 58.5% is the real number the government is touting as job improvement when our joblessness is actually worsening. If you think the way the U.S. government represents joblessness figures is purposely confusing, raise your hands.

Let’s break it down….

Since 2009, the U.S. population has grown 10 million from 305 to 315 million people. The number of working age people grew by 10 million during that time to 245 million people.

Multiplying 305 by 59.8% and 315 by 58.5%, the economy added 3 million jobs, not enough to keep up with population growth. So far, so good….

But if unemployed people dropped from 10.2 to 7.5% during that same time even though the percent of people working did not increase, what happened to this 2.7%, or 5.5 million people?

Well, states smartly put 4.7 million people on disability. States pay for welfare but the federal government pays for disability. So, at a cost of $2,500 per worker, states have geared up to pay private companies to dubiously transfer people that would have been on welfare to federal disability. Historically, 99% of people added to disability never leave it. The remaining unemployed have been absorbed by the welfare system.

Before anyone stands up to bash the current administration for obscuring how bad our economy really is, kindly settle your tushes back down and listen. This disability scheme has certainly been used as a buffer for the economic implosion, but it is not new to this administration. Since China opened its doors in 1979, our disability ranks have swelled from 2.3% of our workforce to 6.1%.

This is a hidden cost of owners of capital investing in jobs overseas. This is a hidden cost of Detroit’s economic policies. Unemployment is getting WORSE, NOT BETTER! MORE people are idle, NOT LESS! The economic implosion created a nation of disabled. If a broken spirit is a disability, perhaps the numbers don’t lie.

Detroit and America Must Choose to Banish Catch 22

Catch 22 is a phrase in the book by the same name that has come to mean a problem that has no solution, for it contains a circular argument, like those that have plagued Detroit for the past 63 years. These problems have been blamed for the misery of millions. Are they truly Catch 22?

Problem #1

To bring more business and population to Detroit, crime must be reduced. But crime cannot be reduced unless there are jobs that pay living wages. And jobs will not be created unless there are incoming businesses, which will not come because there is too much crime.

……………………………………………Catch 22….

Problem #2

Crime will not be reduced unless would be criminals can find jobs to replace benefits of crime. To do so, those jobs must pay living wages. But a majority of the unemployed are illiterate and undereducated and do not qualify for jobs that pay living wages. Therefore, they cannot obtain jobs that will pay living wages. Without a living wage, crime will not be reduced.

……………………………………………Catch 22….

Problem #3

America’s unemployed need jobs. To employ Americans, a minimum legal wage must be paid. But the world competes to make and sell widgets, and world wages to make widgets are less than America’s minimum legal wage. Therefore widgets must be made overseas and sold to Americans. Making widgets overseas keeps Americans unemployed and without jobs.

……………………………………………Catch 22….

For the past 63 years, since the peak of employment and population, the leadership of Detroit, as well as most major cities in America, has accepted the Catch 22 paradigm that their economic problems are unsolvable and therefore, not really a burden that is theirs to carry. Accepting the Catch 22 paradigm means they condemn America to high unemployment and high crime in our inner cities. Accepting the Catch 22 paradigm means that millions of lives will go unfulfilled and wasted, that millions of children go unfed each night, and that our nation suffers as we commit the least of ours to an arduous lifelong pursuit of happiness.

Catch 22 paradigms are roadblocks that keep America’s political leadership from helping America to reach optimal output and productivity. Catch 22 paradigms are impediments that keep Americans from reaching their highest opportunity for all to pursue happiness.

Catch 22 paradigms, however, are merely paradigms that are placed in the collective consciousness of America by those that wish them to exist. America is conditioned to accept them yet they need not be accepted. Owners of capital benefit from them. Political leaders benefit from them. The rest of America does not benefit from them. If America accepts these paradigms, they continue. If America simply rejects these paradigms, they vanish.

Catch 22 paradigms support the efforts of owners of capital to create maximum wealth but cost trillions of dollars and millions of jobs in the American economy. America could force American capitalists to spend their dollars in America. But our history, principles, and laws support the freedom of owners of capital to spend their dollars in whatever part of the world provides the highest returns.

To force owners of capital to spend their dollars in America would require a change of laws that would turn on our principles of freedom for all Americans. We cannot turn our back on our heritage of freedom. Therefore, we accept that the economic engine of America, the capital of our wealthy elite will be spent in other parts of the world, costing trillions of dollars of loss and millions of jobs in our economy.

…………………………………………………Catch 22

Solutions do exist to Catch 22. American owners of capital can make profits in America to employ our workforce without forcing them to spend dollars here if political compromise is made to allow equivalent profit. Jobs can be created that include a living wage, if political compromise allows for living wages. Crime can then be reduced and the pursuit of happiness can be lifted to a higher plane. And believe it or not, all of this can be accomplished without spending more tax dollars, which is the ultimate cry of those shouting Catch 22.

These real and viable solutions, however, require political compromise. America’s economic problems have arisen from deep seated differences of vision that drive conservative and liberal parties alike to pursue their own visions without compromise, producing the political vacuum that must exist for Catch 22 paradigms to live.

In Detroit, one vision is for all that have made it through the gauntlet and that have risen at least to the middle class to escape to the suburbs, and to make Downtown a playground fortress against the poverty of the inner city, while giving up the rest of Detroit’s citizens to Catch 22. The other vision is to form a grass roots effort to fight the plight caused by Catch 22 to all of Detroit’s citizens, yet without attacking Catch 22 as a mere paradigm. They therefore accept its paradigm that economic suffering must continue. Detroit’s two opposing visions have fought compromise since the riots of 1967 brought their opposing views into the political light.

Problems that such a lack of compromise creates in Detroit then cause the city to fester without solution. Polarized city political leaderships acquiesce to the meager capital investments left for their cities as they pursue their opposing political visions. Polarized state political leadership compete with other states for limited capital investments by promising owners of capital that they will not have to share the tax burdens of the state. And polarized federal political leaders pass legislation to allow for owners of capital to make maximum profits overseas at the expense of jobs at home.

Political leaders become convinced that their political interests lie closer to the owners of capital than to those of the rest of their constituency. Without having to compromise across the aisle, they pass Catch 22 legislation that make it easier for owners of capital to invest dollars overseas while escaping the uncompromising political fighting that continues at home. Political leaders’ efforts on behalf of America’s elite become an easier route to remaining in political power than having to bend in political compromise on behalf of America.

Detroit’s solution rests in ending Catch 22. America’s solution rests in ending Catch 22. The solution to ending Catch 22 rests in political compromise that puts Detroit’s future, America’s future ahead of political expediency. Viable solutions exist. Jobs can be created. Owners of capital can be rewarded in America. Much suffering can be banished. The American economy can return to prosperity.

No Catch 22….