What Really Killed Elvis?

I'm really undecided how to begin today's blog. I even fear titling it. Why? Well, it has to do with economics, which is what I really want to talk about. But the mere mention of "economics" raises such disdain of that dismal science,it's probably cost me half the potential readers of this already! So I'd considered titling this piece "Brittany pregnant--triplets!" or something about George Clooney and Jennifer Anniston seen coming out of a Tijuana Justice's of the Peace.

I confess, however, I couldn't think of anything that might make anyone want to read the last and only economics lesson they need know. That's because we Americans are being stripped of our way of life, from our "guaranteed" rights to our basic economic securities and no one seems to care, much less able to stop it. Not the congress nor judicial branches of government. Not the intelligence agencies nor the military. Certainly not the media nor its controlling interests, big business. That pretty much leaves the citizenry and they've been rendered impotent or too apathetic to do anything. It just looks like we don't care. Nothing pleases our leadership more, I'm sure.

Add to that stories continuously emerging of American's vanishing past comforts and their collective angst of the future. This is evidenced by news ever surfacing like last week's story of Delphi voiding labor contracts and slashing retirement pension obligations; other stories like Northwest Airlines cutting pilot's pay for the second time in 15 months; airline mechanic's $38/hr. jobs being exported to El Salvador and China where they earn up to $1,000/mo.; an auto industry defaulting on $45-$50 billion in pension obligations; the airlines, $31 billion. And so on and son on.

An excerpt from the following fun little article I ran across last week (which happens to contain some economics but, sadly, nothing about Brittany Spear's marriage break-up) pretty well explains why this is happening.

Here's a portion of William Paff's article entitled Capitalism under fire from last Thursday's International Tribune. In it, he discusses France's new labor laws being so vehemently protested. But the implications of what's happening there has global implications for all of labor, to include the U.S.

"Since the 1970s, two fundamental changes have been made in the leading (American) model of capitalism.

"The first is that the 'stakeholder,' post-New Deal reformed version of capitalism (in America) that prevailed in the West after World War II was replaced by a new model of corporate purpose and responsibility.

"The earlier model said that corporations had a duty to ensure the well- being of employees, and an obligation to the community (chiefly but not exclusively fulfilled through corporate tax payments).

"That model has been replaced by one in which corporation managers are responsible for creating short-term 'value' for owners, as measured by stock valuation and quarterly dividends.

"The practical result has been constant pressure to reduce wages and worker benefits (leading in some cases to theft of pensions and other crimes), and political lobbying and public persuasion to lower the corporate tax contribution to government finance and the public interest.

In short, the system in the advanced countries has been rejigged since the 1960s to take wealth from workers, and from the funding of government, and transfer it to stockholders and corporate executives. ...
"The second change that has taken place is globalization. The crucial effect of this for society in the advanced countries is that it puts labor into competition with the poorest countries on earth.

"We need go no further with what I realize is a very complex matter, other than to note the classical economist David Ricardo's "iron law of wages," which says that in conditions of wage competition and unlimited labor supply, wages will fall to just above subsistence.

"There never before has been unlimited labor. There is now, thanks to globalization - and the process has only begun.

"It seems to me that this European unrest signals a serious gap in political and corporate understanding of the human consequences of a capitalist model that considers labor a commodity and extends price competition for that commodity to the entire world.

"In the longer term, there may be more serious political implications in this than even France's politicized students suspect. What seems the reactionary or even Luddite position might prove prophetic."

So while Americans former lifestyles are slipping away, it's okay. Relax, it's just the result of the increasing efficiencies of the emerging dominant global economic model, capitalism. A kind of streamlining of international commerce, competitiveness and profits for industry that will eventually reap an egalitarian lifestyle for all of labor to enjoy globally!