How to Fix a Declining US Economy

Corporations and the federal and state governments have trained us well. In the United States, it isn’t in good taste to mention progressive or socialist ideas about economics. This is not the case with conservative capitalism, which the media reports on daily; consider the love/hate relationship with the Tea Party. This imbalance in propriety is one of the signs that the US is in financial trouble. So are its citizens.

In 1936, the US had a 100% tax for any income over $25,000 (about $350,000 today); today, the highest tax rate is 36%. Only 11% of the US work force belongs to a union, down from 28% in 1954. Bankruptcy laws have been revised so they can be used as a tactic to close one business and open another identical business – leaving all the employee benefits behind. As corporations become multinational and with the advantage of computers and modern telecommunications, a corporation can now relocate to a country where the salaries, taxes and cost of living are less expensive. The American generation still in school will not have enough jobs to go around.

By its nature, capitalism accumulates profit. The news programs tell us that 1% of the population holds 37% of the nation’s wealth and 74% of all stock holdings. The rich are getting richer and simultaneously, the poor are getting poorer. These statistics are common knowledge – and still getting worse.

In the 1950’s credit cards were rare. Most worker salaries were sufficient to stay out of serious debt, buy the home and car, pay for insurance and taxes and even send children to college without the children carrying the cost. The last sixty years slowly forced the middle class into serious debt because they tried to continue the American standard of living. But they continued by using credit cards and home refinancing to sustain purchase power. The reason was that salaries were not keeping up with the cost of living. Salaries have, in real spending power fallen over the last 60 years while at the same time, business profits have climbed at a 45° angle. All this extra profit has been accumulated by the 1 percenters.

90% of US citizenry is suffering from dropping wages, being forced to take lower paying jobs, and leaving college with tuition debt that predicts never escaping serious indebtedness. Just because employment is dropping to a respectable 5% doesn’t mention the loss of benefits, hours, misplaced job skills and salaries that are well below their economic capability.

It is obvious to everyone that the Congress is dysfunctional – certainly not in line with the growing anxiety of American citizens. The Republican party, at this moment of severe financial vulnerability to citizens, wants to cut taxes, stop entitlement benefits and relieve corporations from oversight by the EPA, FAA, FDA and any other department that gets in the way of corporate profit – American health and the planet be damned.

We are not in sight of the end of the 2008 recession – not by years. Corporate plans and legislators bought by the corporations plan to abandon the US because it is an old market. The fast money is gone. The new trade agreements with BRIC and China’s new super bank will push the dollar aside. The dollar will not buy as much as it used to.

What can be done to turn away from slow depreciation of our country? Perhaps the one most dynamic act than can be taken is to remove the capital model from our businesses. Business should allow the workers – to the last man – to have a vote on how the company is run, what it makes, the quality, etc. In other words, let the workers do the job of the Board of Directors. It’s called Democratic Socialism. We take charge of our country’s gross national product. If the employees don’t want to move to Bangladesh, they don’t have to. Stopping the escape of corporations in their tracks will boost the economy immediately. The new model for businesses is called Employee Co-ops.

Ancient Mariner

 

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