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I watch the markets climb day after day along with the incessant happy talk from the traders about recovery and a return to the days before the depression began. But how does any of this translate to the average American? All of the money feeding on itself on Wall Street doesn't seem to be creating new jobs. Investing used to denote, for the most part, a commitment to an idea. The investor looked for the company or individual that had built the better mousetrap and gave him his money, in hopes of a return on investment after the mousetrap became profitable. Stocks were meant to raise capital to help in the development of companies which would create jobs, make profit and grow the economy.
Now the stock market has become a play ground for the gambler. It isn't about long term risk and reward but about short term gain. Some bet that the mousetrap will succeed, some that it will fail, but none are concerned about anything but themselves. The greater economy and the lives of the average American be damned.
And this is why our cities, counties, states and country are failing. We've built a system of taxation and the service it supports based on the idea that there would always be jobs and that those jobs would always grow in number and wages. Unions have built themselves and their power around the principle that the worker has a "right" to the wealth of others. Governments have stopped trying to even make the pretense that they were created by the people to serve the best interests of the people. They are fighting for their survival in the new reality of shrinking revenues and higher demands for services they've addicted their citizens to. Governments believe they have the "right" to the wealth of others, too.
Wall street, government and the unions are all linked in their avarice. Each works with the other in a circle of destructive greed aimed at amassing power through the bald faced theft of the peoples money and freedom. And most can't see it. The white collar worker is mad at the unions, the blue collar worker is mad at Wall Street and everybody is mad at the government while at the same time holding out their hand for the dole.
As our cities, counties, states and country collapse we will be rounded up into smaller and smaller areas because it's too inefficient to service a large urban area. The unions will refuse to give, keeping the cost of government supplied services high. Wall Street will invest in short term gain, not caring about the country, just their own wallets. Government will increase taxes to pay for the dwindling services we've come to rely on, taking more and more of the little wealth in the private economy. Eventually the only good jobs left will be government jobs. So the government employee will work for a wage which is handed back to the government so that the government can supply the services the free market used to supply.
Welcome to the "Brave New World", comrade.
"The superintendent calls it the "Right-Size" plan," but many Kansas City, Missouri, residents say it's plain wrong.
Superintendent John Covington called for the closing or consolidation of almost half of the city's public schools. A divided Kansas City school board voted Wednesday to approve the downsizing...
...Covington proposed the "Right-Size" plan arguing that the financial future of the entire school district was at stake. The plan shutters 28 of Kansas City's 61 public schools, cuts 700 jobs and saves $50 million to help reduce a burgeoning deficit."
CNN
"A while back, Tasha Kheiriddin wrote about the Detroit mayor's plan to forcibly relocate parts of the crumbling city's dwindling population, huddling them together in greater densities for the sake of efficiency. Why spend good money sending garbage trucks out to neighbourhoods that have been all but abandoned, after all?
"If we don't do it, you know this whole city is going to go down. I'm hopeful people will understand that," said Mayor Dave Bing. "If we can incentivize some of those folks that are in those desolate areas, they can get a better situation."
Fair enough. Efficiency is good, though herding people out of their homes and forcibly replanting them elsewhere has some disturbing historical connotations. But let's ignore that for the moment; it still leaves the question of what to do with all those newly-depopulated areas. What, exactly, did Mayor Bing have in mind?
Well, now we know. Amber waves of grain, or something close to it. According to this report from Associated Press:
Operating on a scale never before attempted in this country, the city would demolish houses in some of the most desolate sections of Detroit and move residents into stronger neighborhoods. Roughly a quarter of the 139-square-mile city could go from urban to semi-rural.
Near downtown, fruit trees and vegetable farms would replace neighborhoods that are an eerie landscape of empty buildings and vacant lots. Suburban commuters heading into the city center might pass through what looks like the countryside to get there. Surviving neighborhoods in the birthplace of the auto industry would become pockets in expanses of green."
National Post
"The city's major hospital network, which runs Miami's only round-the-clock trauma center and is a safety net for the poor and uninsured, is running out of money and could close, a predicament that illustrates the precarious financial state of many hospitals around the country.
The Jackson Health System will have little cash on hand by the end of March if it does not receive a $67 million advance from the county, said Marcos Lapciuc, treasurer of the Public Health Trust, the institution's governing board.
"We are very close, if not already in, a health care death spiral," Chief Operating Officer David Small said."
Yahoo
"If the Jackson Health System runs out of cash, the county would be responsible for paying Jackson's 10,500 union workers, but not necessarily the other 1,500 employees, according to a legal analysis by County Attorney R.A. Cuevas Jr.
It's unclear exactly how big a tab that might be, but it would be a huge chunk of the $86 million of salaries and benefits that the public hospital system spends each month. At present, Jackson is expected to run out of cash in May or June unless drastic cuts are made."
Miami Herald
"Township officials expressed frustration that several unions representing Moorestown government workers have not agreed to reopen contract negotiations.
Last month, township council asked the unions to consider making wage and health benefit concessions this year even though they have contracts that continue through 2012 and guarantee annual pay raises of 3.75 percent.
At Monday night's council meeting, Township Manager Christopher Schultz disclosed to the public the specifics of council proposals to the unions -- a wage freeze and a payroll contribution to health care benefits to help cut costs to the township.
As of Monday night's deadline to respond, township officials said none of the unions had agreed to reopen negotiations."
Courier Post
"Gov. Pat Quinn today called for a 33 percent increase in the state income tax rate to raise money for education and ease deep cuts he's proposed in his new budget plan.
In his short budget speech to the House and Senate, Quinn argued that an income tax "surcharge" would be enough to restore Illinois' education budget to current levels and allow the state to get caught up on some of the millions owed to public schools, community colleges and four-year universities.
Quinn wants to increase the personal income tax rate from 3 percent to 4 percent --- a 33 percent increase --- with the corporate tax rate rising from 4.8 percent to 5.8 percent. The tax hike would bring in $2.8 billion a year."
Chicago Tribune
"The recession and the ongoing jobless recovery devastated much of the private-sector work force last year, sending unemployment soaring, but government workers emerged essentially unscathed, according to data released Wednesday by the Labor Department.
Meanwhile, the compensation for state and local government employees continued to easily outdistance the wages and benefits for workers in private business, a separate Labor Department report showed."
Washington Times
On the hopes of a minor improvement in the rate of job loss, investors raise the price of crude, a move guaranteed to bring any illusion of economic growth crashing to the ground.
The rich continue to profit at the expense of everyone else. Nobody minds when somebody makes a buck but this is taking food out of peoples mouths and the roofs from over their heads. This is taking money from the blind mans cup.
"Oil prices rose to near $81 a barrel Friday in Asia as crude traders followed equity markets higher ahead of a key U.S. jobs report.
Benchmark crude for April delivery was up 48 cents to $80.69 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 66 cents to settle at $80.21 on Thursday.
U.S. stock markets rose Thursday on investor optimism that the February unemployment rate, scheduled to be released by the Labor Department later Friday, will show the economy is recovering. The jobless rate in January was 9.7 percent."
AP
I read an interesting article today on the CNA website. It talks about true and sustainable free market activity versus the bastardized version we Americans have been conditioned to accept.
"The international controller for the Vatican’s Prefecture of Economic Affairs, Thomas Hong-Soon Han, said last week that Christians must go beyond the logic of “the greatest benefit at the lowest cost possible” and that the demands of justice and charity must not be sacrificed in economic activity, as the Pope has explained in his encyclical “Caritas in Veritate.”
"The greatest benefit at the lowest possible cost" sounds as though, with a little bit of work, it could be the slogan of almost any retailer in America. This is the lie we are sold every day. The question is, who benefits? Maybe it's the workers in third world countries that sew our clothes for pennies a day. Maybe it's the consumer that buys those clothes with the wages that have been reduced by competition from third world slave labor, if they have a job at all. Or, maybe the true beneficiaries are the owners of the corporation, profiting from the pain caused by their "profit at any cost" business practices.
In an interview with L’Osservatore Romano, the Korean expert explained what a Christian perspective should be in the case of a building project, for example, noting that economic convenience must not be the sole factor in determining which company to contract. “The proposals of a given company need to be considered as well as the working conditions, the salary levels, in sum, how justice is concretely carried out in the organization.”
If a company engages in worker exploitation, the Church must reject this behavior because it would otherwise be indirectly complicit in the evil, Han said.
The same can be said of the consumer that supports the corporation that exploits workers in the name of a "deal". I'm as guilty of this as the next guy. I've not had much work lately so I try to find the best price on everything I buy. But I find myself asking, "What is the true cost of my decision to shop where I do?" I wonder if I would pay a bit more would I be making a more morally acceptable choice? Would the extra money I spend go to improve the lives of the workers or would it just be applied to the bottom line? In todays profit at any expense version of the free market my guess would be the latter.
He went on to warn that it is easy to give in to the temptation to place a priority on achieving favorable conditions from an economic point of view, and that this is sometimes justified in the name of the demands of charity. “The alleviating of one sector—it is said—can mean greater availability for other social and humanitarian activities. But in any case what is forgotten is that ‘charity demands justice,’ as the Pope writes in 'Caritas in Veritate.'”
The argument, one that I used to buy into, is always made that if it weren't for these slave wage jobs people in the third world would have no employment at all. I suppose that depends on your definition of employment. Many of the people that work in the factories that provide us with our cheap consumer goods have moved to cities for these jobs. Before they moved, many lived in rural areas, farming at a sustenance level. They may have barely managed to maintain their own lives but at least they could live independently. Now they live in cities, dependent on a barely functioning infrastructure to support their most basic needs. As the world economy contracts and their jobs disappear what will these people do? The infrastructure will disappear quickly, leaving them without means for their own survival, destitute and dependent on the state. America, the bastion of rugged individualism and free market independence has created, through our incessant demand for "the greatest benefit at the lowest possible cost", slavery and despair, starvation and hopelessness. Hardly the Jeffersonian ideals we preach to the world.
"Referring to the current global economic crisis, Han said its origins stem from a “moral deficit.” “Capitalism does not work without an ethical foundation. Things fall apart when their foundation is not based on moral principles. On the dollar bill it says, ‘In God We Trust.’ For this reason if the market is based solely on selfish interest and not on ‘trusting in God’ it fails.”
While the Church does not condemn capitalism as such, he noted, she also asserts that the market economy must have at its center the human person and his dignity. “'Caritas in Veritate' is very clear about this,” he said."
Capitalism, functioning within the bounds of morality and ethical behavior is good. Capitalism as practiced in most of America today, bound only to the pretext that the corporation exists to make a profit, is evil. Capitalism is capable of raising the standard of living of more people than any other system ever developed by man. I wouldn't want to live any other way. The greed that is so evident today is not real capitalism, it is self interest at the expense of all else writ large. Real capitalism requires that all parties involved benefit from the activity. This isn't to say that all benefit equally. The more risk one takes the greater the rewards should be. And this isn't to say that failure isn't an option. Even failure, when honest and not the result of some sort of immoral or unethical activity, will cause a benefit because we can learn from it. Basically, I'm talking about good sportsmanship.
In America we've taken the game of capitalism and tried to cheat our way to the top. We've bought off the referees and rewritten the rules. We've changed the playing field to suit our needs. We have played a take no prisoners game and our lack of sportsmanship has changed the game so radically it is hardly recognizable. We are no longer capitalists; we are opportunists. And, we've given capitalism a bad name.
"After underscoring that ultimately individual persons are responsible for economic structures, Han called for “a formation of consciences in the gospel values. This is the principle task of the Church’s social teaching and this is pointed out in the new encyclical by Benedict XVI.”
Han stressed that the Church “is not an NGO or a charitable entity. The action of Christians is based on charity, but stems from the truth: Caritas in veritate. We cannot overlook the incarnation of a God who became man for love of men. This is perfect charity. The truth of our faith acquires more credibility if it bears witness to love.”
Until we begin to apply the same rules to our business practices that we expect our children to obey at home we will not return to a truly free market. Corporate profit does not erase the need for civility and personal responsibility nor does it remove the strictures that bind us in all other human activity. As Christians we are called to love one another first and let all other decisions and actions flow from this basic command. American capitalism has abandoned this principle and thus has abandoned God. We must turn back or we will suffer the consequences.
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