Is there an “Expiration Date” on Capitalism?

I do not think I could effectively explain the information overload I have experienced recently on the state of our country’s economy and the inevitable effect it has on its citizens; which of course includes me. My overall reaction to all this information is disturbing. The information has come from many different sources, and I am thinking these are all tied together somehow; related in some way. It drives me to ponder the question; is there an expiration date on the social economic system called capitalism in the United States?

I am neither a “Doomsday Prepper” nor a person that sheds negativity into every conversation concerning politics or money. Yes, politics and money are always closely related. I am not overly criticizing the leaders of this country as if it is their entire fault; although they certainly should not be let off the hook. I waver on my stand of attacking the capitalists, “Wall Street,” and those with the gold that make the rules. They are doing what comes naturally. However, they are definitely sharing the “hook.” I do not stand on street corners carrying “end of the world” signs. I do not preach about the Armageddon… or the second coming of Jesus, for that matter. And I do not know why I carried my thoughts to such an extreme. I do, however, believe that money is usually a key motivator in any endeavor related to business or lifestyle. Money is a major force that has carried a laundry list of warning labels since the beginning of man. I view ALL advertising messages as suspicious; merely 60-second blurbs of half-truths aimed at separating you from your money. The goal for the capitalist is to obtain money. The verb to describe this is “capitalize;” to take advantage of; turn something to one’s advantage (often followed by on): to capitalize on one’s opportunities.

The bottom line is a term widely used to mean, the final statement, when all is said and done, after the dust has settled… income minus expenses equals the bottom line. And my bottom line is this; as U.S. manufacturing and service jobs continue to evaporate, as U.S. inflation and rising costs continue to out-pace the wages, as more and more goods and services are needed for consumption… when does it all go “pop”? When will the muscle of the classes; the middle class, no longer be able to afford those goods and services? When will companies no longer be able to provide goods and services because they are not making money on those higher priced goods and services?

Will it be a pop or BOOM?

Ok, maybe instead, the economic death spiral will be slow and painful; like a screw forced into an under-sized hole using a big-ass screwdriver. We might continue to see the signs, continue to worry, continue to feel the pinch, and before we know it the number of families living in poverty, without homes, or without food becomes a huge statistic (way bigger than it is now). The crime rates should begin to climb proportionately. Looting will be common; not for fencing but for survival. Bustling cities and towns will look more like Detroit… I mean; a ghost town. The top 1% of the wealth in this country will tumble and only those that sustain their markets in foreign lands will survive (longer). Banks will close and a run on cash will close them faster.

Maybe the BOOM will be evident when it hits you or your neighbor directly.

JOBS: “Fifty years ago, a third of U.S. employees worked in factories, making everything from clothing to lipstick to cars. Today, a little more than one-tenth of the nation’s 131 million workers are employed by manufacturing firms. (USATODAY.com; “U.S. Manufacturing Jobs Fading Away Fast”; by Barbara Hagenbaugh, USA TODAY; Posted 12/12/2002 10:47 PM)

Surely, the highly-delusional optimist will point out the overwhelming increase in service-related employment over the same time period. But those jobs are going off-shore as well, as U.S. companies flee their customer call-centers and information help phone lines to low-cost English speaking countries to take advantage of their inexpensive, intellectual population, e.g., India. No job is safe from off-shoring. And who is filling those “service” jobs; factory workers? I think (and this is my opinion) a different sector moved into those face-jobs; mostly women and the high school graduates. Speaking of graduates, if I were to copy the entire cited article from above, a “subject matter expert” that was interviewed made a comment that workers of the future will be attending college their entire careers. Fantastic! As college tuitions rise faster than pizza dough, the future worker will need two full-time jobs just to keep up payments for schooling. Thus, with a sarcastic tone, the worker-student is provided a couple hours of sleep in-between classes and jobs. But from this, more schools will be “built,” and create more scholastic competition, and drive down those tuitions, right? No. Infiltrating the system with more universities is like adding more major league baseball teams to the league; we begin to dilute the superiority of abilities. In teaching, that is reflected in the learning. Fact! As more people try to get into college, admissions gets tougher; qualification standards get higher; and inevitably the supply of graduates exceed the demands on the work force. On the other hand, we get bogged with inferior educations and scam artists trying to make a fast buck. Case in point; a friend of mine recently received his official papers to be a certified welding inspector. It turns out, his instructor falsified his certification; thus, nullifying my friends certification.

But if we are going to discuss labor shifts, something about this has always bothered me. And that is the masses cannot just make sharp turns to change direction and meet these new roles. For example, our elected officials like to spout off about job creation to help improve our economy and those that need work. Sounds Great! And in turn, when they decide to be true to their word, they commonly appropriate monies to rebuild something; like the country’s crumbling infrastructure. Again, sounds great! However, I’m perplexed as to how that helps our aged workforce struggling to find work. A sixty-year old man laid-off from his desk job after 30 years is no good at building bridges or even driving a dirt truck. The physical requirements alone can keep this guy off the payroll. What about a desk job for this out-of-shape, not quite ready to retire wage earner? There aren’t many jobs available that will fit their requirements or his expertise. One might argue the increase in jobs on the construction site creates more money flow for other consumables, which in turn over time should create more jobs. Unfortunately, I just don’t see any immediate jobs opening up for the old guy in my example. I’m not saying it is impossible, just unlikely and definitely unable to serve the newly-unemployed masses. Instead of creating jobs for everyone, we shift the unemployment demographic.

The base of the socioeconomic pyramid consists of a large “unskilled” workforce; lovingly called the worker bees. “Capitalism is a pyramid; a social structure that requires an abundance of laborers to produce, process, and transfer all of the goods that we consume. The base of this pyramid is very wide with a large number of laborers supporting a relatively small number of elite at the top of the pyramid.” (Article Source: http://EzineArticles.com/2410970) Like a pyramid, if the socioeconomic base is weak it will not stand. Regardless of my whining, if the wealthy capitalists blindly chip away at the base in order to serve themselves, there won’t be a base to hold them up.

WAGES: “For starters, between 1993 and 2012, the real incomes of the 1% grew 86.1%, while those of the 99% grew 6.6%, according to the study, based on Internal Revenue Service statistics examined by economists at UC Berkeley, the Paris School of Economics and Oxford University.” (Article Source: http://articles.latimes.com/2013/sep/11/nation/la-na-nn-income-inequality-20130910)

What? This is an OUTRAGE!! Or is it? Not really. This is a capitalist system, where the upper elitists do less for more and the worker bees do more for less. The guy with the gold makes the rules and if he can get away with making larger profits without paying his workers more than he has to… well then, why the heck not? The workers are at the mercy of the “man.” And the man wants to make money.

Since the beginning of the Industrial Age (and long before that), laborers have been the greatest asset a company has, yet there were so many laborers to utilize, the bosses treated them as badly as they wanted and got away with it. The common laborer can easily be replaced because of the number of them and the unspecialized or simple, teachable work content. Somehow our government found the heart to protect the children by implementing child labor laws around the turn of the 20th century. Later, unions were formed and they fought to protect the workers from inhumane and unfair treatment. Again, the government had to create more labor regulations to keep businesses from totally enslaving their workforce. Don’t ever expect a fair shake from corporate America. The only break might come when a business market as a whole sees that the spenders… the ones buying their products… are being forced to keep their money in their pockets. That is called an economic revolution.

During the time of strong growth and prosperity after World War II, companies offered higher wages and benefits to retain valuable employees. Companies relied on gaining their employee’s loyalty through perks and niceties, e.g., bonuses, parties, picnics. But that bubble blew in the seventies because of stiffer global competition, increased operating costs, and shrinking profits. Companies scrambled for better efficiencies. Of the three major cost components; labor, materials and overhead, labor was the easiest to change and it made a big impact. For an example, the introduction of the 401(k) and subsequent legislation, companies continue to exploit the worker by eliminating the pension and giving the retirement burden back to the employee; thus, lowering their costs of putting money into pensions and hiring people to manage those monies; thus, increasing their profits. I have witnessed first-hand the diminished perks for the working class of large companies. Another example would be the massive shift to off-shoring of manufacturing to LCCs (low cost countries). As of this writing, a U.S. company established in China can hire eight bodies for each one eliminated in the states.

Capitalists thrive in a competitive arena. The goal is to make money… – more money (a bigger market share) than the other guy. In the race for money, if one company sees an advantage, they will take it. They won’t lean back on their heels and pass on an opportunity just because it might not be liked by the community. I am definitely not condoning unethical business behaviours. I despise that. Capitalists reek of corruption, wrong doings, and whatever it takes to capture the almighty dollar. History is flooded with stories of bad business behaviours. But being a good, hard-working capitalist is also honorable and revered. Thus, the paradox; capitalist guys and gals you love to hate.

And speaking of history, if I were to compare the standard of living of today to previous millions of years before me, I would be compelled to say we Americans are SPOILED WUSSES. Our reliance on everything being handed to us in exchange for a couple paper bucks is taken for granted as much as breathing. We take it all for granted. We have to; consumer spending and consumer debt is back in full swing despite a downturn after the real estate bubble blew up.  If I want food, I go buy it. To stay warm and dry, I pay the bank for the loan they gave me to stay in my nice, renovated, over-sized house. I get around in a good car that I pay to have it maintained, and I keep it running with a bi-monthly trip to the gas station. If something bad happens to my health, my car, or my home, I have insurance to help me because I can pay the premiums. All I have to do in exchange for all this… is get up early five times every week, and drive to a company created by capitalists, and do my very best at what I do, so that they let me come back the next week to do it all over again.

It was not like that many years ago. This luxurious lifestyle I am accustomed to was way out of reach for my forefathers. The last thirty years has seen a technology growth so fast, it would make their heads spin. But were my forefathers looked at as unfortunate for living without all these techno-toys of today? No. They did what they knew from their fathers and their fathers before them and they learned that working hard and doing important things got them their daily needs. That was part of their lives; being self-reliant; and being self-sufficient got them through each and every day. They did not rely on money, only trade. If they could not grow it or make it, they found someone who could and they bartered for it. The key was that everyone needed a huge basket of resourcefulness at the ready. Everything came from the earth and nature; not a grocery store or website.

Sometimes I sit and ponder what would life be like if I no longer had access to the luxuries of my lifestyle. I do not enjoy the thought of losing the things I consider “basic.” If you multiplied my loss by the millions of people in the same position as I would be in, the chaos of this country and subsequently the planet would be unimaginable.

How can an economic meltdown be prevented?

It is unlikely the wealthy capitalist will depart with his money to re-invest in America and American workers unless they see little to no risk of loss. Democrats seem to like the idea of spreading the wealth; they call it redistribution of wealth. Republicans think lowering the tax rates will put more cash in the working class’ pockets to stimulate the economy. Is it hopeless? I don’t know. The recovery depends on how quickly we fall. The best scenario is that recovery begins and blends with the decline.

The recovery lies in the non-secrets of our past; the non-hidden essentials of survival and commerce.  We need to fill our baskets with resourcefulness. And we need to re-establish the barter and trade mentality. I imagine the bustling inner-city and suburban neighborhoods thinning as people can no longer afford their homes. I don’t even have a good idea where they ALL will go; perhaps many will live with relatives… communal living will come back in-style out of necessity, perhaps many will seek refuge in nature, or worse perhaps and most likely many will become homeless, vagrant beggars that squat under viaducts in cardboard makeshift shelters.  Images of over-crowded shanties and corrugated steel cubes held together with mostly coat hangers come to mind.  Living conditions that I find unimaginable and cannot see myself tolerating.

Those that stay in neighborhoods will need to setup their fortresses for protection. But they will also turn their plots of land (and possibly the land around them) into vegetable gardens. They might even gut a nearby garage or two in order to house some barnyard animals to provide textiles, dairy, eggs, and transportation. If they can fend off the poachers and thieves, they could survive for as long as their bodies hold out. There will not be any medicines to help them feel better. But I see the birth of an old way of life; barter. As one neighbor fills his food pantry, another has built a blacksmith’s forge. Another further away knows how to cobble shoes or sew. And in this system, we find the recovery.

After that… God only knows!

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