by Jim Knapton

T he seriousness of our national plight, the fact that we are witnessing the destruction of our nation’s and our individual financial well-being, is not always apparent to us as we look around our once privileged world. Most people are working but getting less pay and fewer benefits. he seriousness of our national plight, the fact that we are witnessing the destruction of our nation’s and our individual financial well-being, is not always apparent to us as we look around our once privileged world. Most people are working but getting less pay and fewer benefits.

By our government’s reckoning, unemployment is now around 9 percent, but we all know in reality it is much closer to 18 percent.

For many small businesses it is touch and go. Meanwhile, banking and associated financial markets are doing brisk business, the only US business sector alive and kicking. True, there is stuff in the shops but most of us are buying less. We still appear rich, but wherein lies our wealth?

I s the value of our national assets that we see in abundance greater than our national liabilities? Just go to the “Economic and Financial Indicators” back page of the Economist any month and see the US trade balance: $800 billion, eight-fold higher than anyone else. And when things get tighter, as the current credit crunch indicates, can we argue that the best thing to do is spend our way out of it by “burning incense at the altar of consumerism,” quoting Jonathan Ruffer of the Spectator? Hence, the logical question as we move into 2012: what are we going to do to stop the rot?



To the Madding Crowd, waging war is certainly one way out. Since WWII the US has been on a huge binge creating a military-industrial complex that brooks no equal. Then it seemed vital; now it is a liability. Sixty-odd years ago its energies spawned the atomic bomb. With that came the realization that we can rule the world through the threat of using our military power; that is, until 9/11 when we met up with determined terrorism, unless it was a false flag operation as many of us think it was. So what does winning mean now? What can it ever mean if someone is eager to blow himself up, along with innocent citizens, in the name of religion? We can retaliate by killing civilians at random using drones. But millions will soon love us a lot less than they do now.



America is the greatest manufacturer of munitions the world has ever known. Is this how we wish to be remembered? Not long ago we could afford this arms-manufacturing behemoth because US manufacturing also created exports for the world. Now we may feed ourselves, but we certainly don’t clothe ourselves or create wealth by making much else. We have given up domestic manufacturing. We decided instead to consume. Now we gobble up all that the world thrusts in our trough. And how do we manage this? We issue credit. If Nixon told us a dollar is as good as gold, does it matter if it is a paper dollar or just our scribbles on paper?



We do have other strengths of course. The massive medical-pharmaceutical complex comes to mind, even though “healthcare for profit” is a contradiction in terms; 20 percent of us have no health insurance coverage anyway. Wall Street and a few massive banks are doing well, propped up as they are with taxpayer bailouts. Software giants such as Microsoft, IBM, and Google; enormous sales enterprises such as Wal-Mart; and food distribution giants such as McDonald’s and Coca Cola are known the world over, for better or worse. At the same time, Hollywood’s media industries are distributing dumbed-down dollops of the barbaric, inane trivia they call entertainment to the masses.



All these, and much more, cater to the country and the world. But do they add wealth? Of course they do, but enough to pay off the national debt? Get us over the upcoming geriatric baby-boom hump? Cover the dollar outflow of our trade imbalance? Not likely, based on our performance right now.



With little manufacturing left among these giants, we are not bringing home the bacon. Making products, particularly for export, has for the last century been our major source of wealth. It meant jobs at home and income from abroad. Now, instead, many businesses are outsourcing labor overseas, including labor-intensive back-office revenue streams. What remains of US labor interests is being marginalized. So with our wealth pouring out of the country, there is less and less of it at home, even for those who are working.



Therein lies the rub. Unemployment is climbing forever upward. Average hourly wages are not increasing, and there are more people out of work today than at any other time since the 1930s. Many more cannot find full-time positions, so they pick up part-time work if and where they can. Very few part-time jobs provide medical insurance for employees, and many professionals are losing theirs as well. Businesses are cutting employee healthcare benefits because they can no longer afford to carry them.