From the very founding of our republic, a middle class developed. It was unlike anything in Europe, where there were royals, and commoners, and rarely did the two interact. Whether it was Ben Franklin, Henry Ford, or Bill Gates, there was hope, that with hard work, anything was possible in our country. A poor person could, through sweat and a little equity, provide a product that people would buy. You did not need to know the President, or anyone politically in control. When you manufactured products, you employed your neighbors, and the community as a whole benefited. Contrast that with a recent story from Cuba. The Cuban Government is closing down small businesses that have popped up to provide a service or products that are not generally available. As an example, they are importing clothing that sells for less than the government factory clothing, netting the business person profit, and saving the people money that they can spend on other things. I guess the government does not like the competition.
Competition is the very nature of our economic system. Competition for consumer dollars keeps our prices reasonable, and productivity high. We have improved our standard of living immensely since the early days of our independence. While not every new product or new technology has originated in our country, many have. And those that did not, generally were improved by our citizens. The assembly line, the light bulb, the phonograph, the computer were all perfected here, if not outright invented here. Rockets and missiles took us to space, and it was improvements to early designs that landed us on the moon.
It was the middle class that drove most of this, whether they were entrepreneurs, or just consumers of the products. A very wealthy person, generally has no more desires than a middle class person, oh they may be more ostentatious, however one person can only consume so much. And that was the beauty of our economic system. By "spreading the wealth" through hard work and aspiration, more consumers were born. These people had money to buy Ford's cars or Gate's computers. The United States developed in to the number one consumer market in all the world. People immigrate here to be able to live their dreams, something the class system prohibits in many parts of our world. In the 1990s, we hosted an exchange student from Russia. He lived with us for a while. His dream was to write software. He studied hard, and worked his rear off to be able to write code. After he returned to Russia, he prepared to go to University. To enter the University, he had to take a test, to see if he was the most capable to write software, or if he should do something else. The test did not go well. We lost track of him at this point, we aren't sure what he ever grew up to be, but the government said no to writing software. If he had grown up here, he could have pursued software engineering, and perhaps, because of his wants and dreams could have been successful. Passion goes a long way to success.
Even in our country, not everyone is cut out to be a software engineer. But if you have a passion, the market will decide if you are any good, not some aptitude test. Some of us have seen our dreams crash, but others have lived a happier life doing what they are passionate about. Is that true any longer?
To a degree, yes. We are, however, less able to live our dreams than in the past. We are losing our middle class. You can see it in the current battle over wages at fast food restaurants. Being a cook, or waiter, or buss boy was never considered a middle class position. Skills is what made money. So even truck drivers, or factory workers, if they had skills could make a good living. Our problem today, in our opinion, is the "too big to fail" mentality. We move money around today, instead of making things. And many people who deserve a middle class income are shut out. Big, multinational corporations, will produce their products where they can profit the most and not necessarily where they are needed the most. So light bulbs, and TVs are made in other countries. Those very skilled manufacturing jobs, are leaving, and not because of skills, or labor availability, but because of money. Now don't get us wrong, money is an important consideration, but should not be the only consideration. There is no way that a product can be produced in Asia, transported to North America, then distributed across the continent cheaper than the same product made here. That is why foreign car makers when they grow to a certain size, look to open factories here. VW, Mercedes Benz, Toyota, BMW, Hyundai, Subaru, and Nissan are examples of North American manufacturing of "imported" cars. Fiat is a majority owner of Chrysler. If labor rates were cheaper in Asia or the third world, would they not make the cars there and ship them to dealers here?
By assuming that GM, Chrysler, Bank of America, Wahcovia, or any other large company are too big to fail, we tie up capital that might launch the next industry. And since these companies have no real local ties, there is no incentive for them to care about communities you find them in today. One company close to my heart, since I grew up near them, is Anhueser Busch brewing. They were at one time the largest independent brewers in the world. And they were American owned. Several years ago, an European brewer bought them. Prior to that, AB was first on hand with canned water when disaster struck. There middle managers all had "charity" budgets to provide t-shirts or other products to local schools or charities. Since the merger, that has changed. They are huge now, too big to fail. Middle class jobs are no longer here sadly. In prior decades, that merger may have happened, but AB would have been the buyer. See, at one time banking was local, offering the Busch Family access to capital easier, with a phone call to a friend. They did try to fight off the takeover, they just didn't have enough time to arrange financing. But Bank of America, who bought one of St. Louis' largest banks was not helpful, and neither was USBank, the buyer of Missouri's largest Bank. So they are now "too big to fail".
Big is not always best for the middle class. Sure big companies employ a lot of people. Big companies have less local skin in the game, GE has no reason not to produce light bulbs abroad. Especially when you consider tax ramifications of doing so. They move money, not products. Where the cost differential is in tax policy, why not move a call center to India? We need to fight for our middle class, or we will become like European monarchies, or third world dictatorships, where the rich get richer by taking from the poor, there is no dynamic economy.
We need to get past "too big to fail" if GM mismanages its business, it needs to fail. The fallout would be hard at first, but over time others would take its place, and all the talent and skills are still there, perhaps a bigger, better company would evolve. In the 1980s, I was working retail management, at the time the four largest companies were Sears, KMART, Woolworth and Montgomery Ward, today Sears and KMART are one company (and still are not number one), Woolworth and Montgomery Ward are gone. That list today is Walmart, Target, Costco, and Walgreen. Crony capitalism is taking root in our country, and the public treasury is being used to support mismanagement and greed.
We do not need to be, nor should we want to be Cuba, we are better than that. We need to believe in our people, the people who linked the world with radio and internet, the people who lit up our lives, the people whose skills and passions have driven us for so long. Unlike some, we do not believe it is over for America, we're just having a tough time. We do believe that our government is not helping, but even that will not stop us. They talk as if China may overtake us as the largest consumer market, perhaps, but only if we allow it. We need the liberties in our system to drive our economic machine, if government gets out of the way, watch what happens!
Spend Wisely!
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