Reality Based Economics

September 24, 2005




Earlier today on TV, I heard an interview with Rep. Poe from Texas.  The question was asked about rebuilding and we are going to pay for it.  The reporter asked about rolling back the tax cuts.  Poe's response was... "No, we don't want to do that because we know that tax cuts create jobs". 


In the past, before our economy was eviscerated by 'free trade', it was true that tax cuts did create jobs because all investments were in our country.  Investments in this country created jobs.  In a global economy and with all incentives being given for foreign investment rather than domestic, all the tax cuts do is to accelerate our demise because it accelerates the outflow of capital to foreign markets. 


There is a very simple analogy for how this works. Picture our country as a dam and our economy as the water in the dam.  Free trade was equivalent to blowing a hole in the dam releasing the water.  With nothing to hold it, water seeks the lowest level.  The same is true of economic activity - it seeks the lowest level - the location of least cost for maximum profit.  


The tax cuts are the same as fresh water flowing into the dam, but as long as there is a hole in the dam, the water will continue to flow out.  In our economy, the economic activity and jobs will continue to flow out to the least cost, maximum profit locations. 


The loss of economic activity and the loss of tax revenues will cause us to cannibalize our institutions and our infrastructure will crumble because there won't be money to pay for it. 


The real economists - the corporate economists know very well what they are doing to our country.  They are the ones who pay for propaganda campaigns... 'shortage of labor' and 'jobs Americans won't do' and 'our schools are failing' because it is highly profitable for them to do so (least cost, maximum profit).  They use government economists like Gregory Mankiw (fast food is manufacturing because burgers are made in an assembly line) and university professors who will say anything for grant dollars to try to dazzle us with 17th century theories of economics.  Even if one does not think they understand economics, if they have even a quarter of a functioning brain, they have to realize that 17th century economics would not apply in the world of the 21st century. 


So what is the real purpose behind the corporate propaganda campaigns - 'shortages' and 'lazy Americans'?   They are trying to substitute quantity for quality.  As our economy is being exported, the massive importation of people - legal or illegal keeps up the image of a functioning economy by fueling the building industry.  It's a Ponzi scheme that uses people and obviously, it is not sustainable.  Eventually, the bubble will burst and we will be left with a huge new population of 'immigrants', a devastated infrastructure, a bastardized culture and no real economy to support them.  This is a recipe for revolution and chaos.   


The stress of massive inflows of people at a time of economic decline is accelerating the demise of our institutions and infrastructure as well as the decline in our standard of living.  Consider this... it takes 10 minimum wage jobs to replace 1 job in a technology field.  The importation of the 10 people keeps the tax receipts at roughly the same level, but the increased use of resources and the institutional costs for the increased population far exceed any possible economic benefits.  For example, the National Governor's Association's plans for the redesign of high schools is a palliative measure to accommodate the increase in population. 


The marketed image meets the expectations of American parents because the pitch sells the idea of quality education leading to post secondary education and students well prepared to ‘compete in the global economy’.  In reality, the redesign is the implementation of the transition of our high schools into schools that provide a basic education - probably to around the 8th grade level and vocational training complete with a program of free labor (on-the-job training) for employers which leads to a certificate of mastery in such sterling careers as cosmetology and the manufacturing of burgers at McD’s.  The time a child spends on the job is a cost reduction to the school because it is less time in the classroom and it is a taxpayer subsidy to employers.


Idaho provides a good example of the bait and switch tactics being used to sell the public on education reform.  It was recently announced that the Board of Education has a plan to redesign Idaho’s high schools.   A quick scan of the glossies gives the impression that this is Idaho’s plan for reform and that it is geared towards preparing the children for college.  A slow and careful read tells the real story:


“What students learn in high school must be relevant to the workforce after high school and what they’ll be expected to know before entering college.  One of the ways to add relevance is requiring students to have a postsecondary plan.  This will help students plan for the future now!  It also ties what students are taking in high school to either their college or worforce goals.”   ( Notice on page 6, it references a document from the National Governor’s Association which includes steps that Governor’s can take to implement this program - including a way to circumvent a state’s constitutional educational governance mandates).


“Developing statewide pathways to industry certification”  (that cosmetology certificate)


“Enhance the 4-year learning plan by requiring a Postsecondary Readiness Plan at the end of the 6th grade”  (choose your career path when you are 12 )


“Essentially, the longer students stay in school in America, the less they learn”    (lmao - get them out of school as quickly as possible because America’s future economy won’t require educated people because our economy has been exported to cheaper markets for production).    


School reform ostensibly to help us compete in a global economy is just one of the schemes that buys time and gives lawmakers the image of doing something to save our country.  The truth is that nothing will help us compete in a global economy because there are far more people in the world than there are jobs for people.  Since corporations are psychopathic, they don’t care who or what they kill as long as the profits keep rolling in.  If globalization destroys our country, to a corporation, that’s just business - Indian consumers are just as good as American consumers and there are a lot more of them. 


The only remedy for the mess we are in is to plug the hole in the dam so that the water can’t run out.  We need to go back to reality based economics with a focus on what is best for America and American citizens.  If we don’t do that, our country and our way of life will be lost forever. 


Say It Loud!   Say It Often!   Say It Proudly!   PROTECTISM IS GOOD!  PROTECT AMERICA NOW!  


Anybody who says otherwise is either ignorant or a traitor.  There can be no compromise if we are going to save our country.