Alan Nasser wrote an interesting piece on Clinton's economic agenda that puts the relationship between the domestic US economy, foreign aggression and the sprawling radical "trade" deals known as the TTP and TTIP in a clearer light. Basically, the way the American elite see it they can no longer count on the American consumer to drive the domestic economy, much less the global economy; the logical conclusion is that they must export more. Then comes the obvious unasked question--export what? Bonds, movies, pornography or maybe real estate get-rich-quick schemes? More serious answers include food, software, and oil. Every now and then, some US industry bull comes out of the woodwork to claim that US industry is healthy, enormous, and world-class with bright rosy prospects. Such protestations belie the actual point, US industry constitutes a very small proportion of both the employed labor force and a small and diminishing proportion of US GDP; profits on the whole are about 3-400 billion which while it may seem large is small in comparison to FIRE sector profits, capital gains, and rents. Taken by itself at 1.7 trillion dollars the US manufacturing economy on its own would be classed as one of the world's largest economies but again it is rather small in comparison to the rest of the economy and rather pathetic when compared to the sheer size of the US population and available labor force. America's status as a great manufacturer is not the achievement of a present generation but an enormous inheritance that was handed down to us from more than a century ago--one, I might add, that is rapidly being squandered. In the present decade, industrial job loss is reported to be worse than the Great Depression with declining or stagnant output in the largest industries showing that this declining job-share is not a cinderella story of exploding productivity to be celebrated; a painful pitstop to a post-industrial leisure economy.
The problem I suppose, is not so much the aim as it is the implementation; for 40 years the industrial base has been increasingly crushed, eviscerated, degraded and worn down, and now we must jump back in to compete for consumer dollars primarily in Asia. I suspect readers well-know that East Asian economies boast both enormous industrial belts themselves and, generally, have very low-wages in comparison to American wages and living standards. That Asian middle class consumer dollar is limited too, both because the emergence of even poorer manufacturing locations is putting the squeeze on wage growth and because American monetary imperialism (along with neoliberalism) is either vacuuming value out of the region or stifling further growth. Meanwhile the American industrial base and working class, both rusty, aging, and scarified, must energetically gear up to compete for fickle Asian consumers whose home governments tend to practice either shadow protectionism or open protectionism as angry American protestations have long made known. This is not the worst of it, since after all US corporations and its government flunkies are some of the worst practitioners of shadow protectionism and free-market cheating, rather state-support for industry, infrastructure and redistribution in Asian nations make competing for that Asian consumer dollar (or should we say yuan?) a difficult endeavor on the basis of the wild, hyper-individualistic, postmodern free-market Anglo-American finance capitalism that the US loves to practice. Perhaps there are those who are deluded enough into believing that all America needs to do is produce more software engineers and hedgefund brokers who will busily work towards transferring their product into "exports" which the world will gladly accept. That doesn't leave much work for the rest of us except cleaning the toilets, changing adult diapers, driving the ubers, serving tables and tending the bar. Perhaps that is why we are seeing such energetic promotion of the "gig economy" as an alternative to both the higher costs of steady employment and labor resistance that tends to grow with regularity. Having experienced this world of under-the-table employment and high-tech digital precarity along with its consequent periods of long under and unemployment I can say that is a fast lane trip to poverty and immiseration. No path could create a nation of welfare queens quicker than trying to reimagine labor as either a musical gig or a kind of impromptu street hustling that you might see with copycat or illegal goods. Newsflash: ordinary people stay out of the music business not due to some lack of passion but because they don't want to starve. I suppose that's not very romantic to say,
because true art can only emerge from suffering and poverty, or so the narrative goes anyway, but fuck that mythos anyways since its been deployed to justify the appalling labor standards and precarity of industries of cultural production.
More work exploring the "gig-economy" may or may not appear on this blog thanks to the precarity and lack of compensation that comes from being a writer, especially one that would prefer to remain anonymous in an age where the persona and online social media politicking is as important as the work itself, in the present times. It is something I want to explore but like with everything else on this blog, not something I get paid to do. When we surmise three-basic trends together: mass unemployment/informalization of labor, a desire to increase exports, and rhetorical claims that consumers must either lower their expectations or cut back, then we see that key-feature is the immiseration of American labor, as indeed the only solution, that our betters are capable of dreaming up in order to increase competition in the world economy. US citizens, especially workers, need to expect more hard times ahead because unfortunately this is the new normal, the new "business-as-usual" and not the effect of a new crisis or super-crisis. Here are some basic reasons why I find this broad strategy implausible for creating a renewed bout of mass prosperity, much less even job growth.
1. The US sustains an enormous trade deficit and thanks in large part to its hegemonic monetary imperialism has served as the "consumer of last resort" for sometime; increasing exports will only diminish the trade deficit in the best case scenario, but it will not necessarily boost domestic consumption. Global demand weakness and economic slow-down makes growing the US economy via the export strategy seem unrealistic; especially when some foreign industrialists desperately wish that the US would consume more.
2. Foreign trade only makes up 23% of US trade and while that is a record for the US where foreign trade made up 6-8% of trade in the early 20th century it is generally lower than the foreign trade proportions of a large number of nations. Overall quantity does not mean that the quality of the effect that foreign trade has on the domestic economy can be underestimated but the large amount of resources and labor that the US has at its disposal and its protectionist history makes an inward turn a likely one. Especially when faced with economic decline and necessity for what you may call "re-development"
3. The FIRE sector makes the US cost of living too high for industrial labor to compete with Germany, much less Taiwan, China or Bangladesh. Leaving the FIRE sector out of control while trying to reform labor in order to export is building a castle on a sand.
4. Stagnant wages often translates into low-producitivity, and whether the US really can compete in the world of race-to-the-bottom makes little difference to workers who've known decades of stagnant wages and are used to a higher living standard.
5. Continued monopoly on innovation and the rents/super-profits derived thereof are unlikely to be a plausible driver in bringing the US to new prosperity. To put it simply people don't want to pay for something intangible that's already been invented, especially in the neocolonial world where the widespread feeling is that they've been ripped off or are being ripped off by the hegemonic powers. Likewise, innovation tends to occur where manufacturing also occurs; fundamentalist market-ideology poses a serious threat to public institutions and government research that serves as a counter-tendency to that decline. China has moved into second place for high quality science and it seems implausible the problem can be solved by the current conservative-liberal guilt-tripping that asks college debt-serfs to forsake their passion or a more lucrative field in favor of STEM.
6. As far as manufacturing itself goes only the most extreme neoliberals argue that the US can do without manufacturing but these extremists set the tone of the conversation. The real debate is whether American workers should do the "unskilled" industrial labor that is considered low on the value chain or whether they should only do the high-tech high-value added work that is requires a high-degree of technical and educational training. The typical answer has been all the "low-value added" labor should be left to Asian workers either making far less or working in conditions of semi-slavery while Americans should only do high-value added work due to their high-wages. The problem is there isn't enough high-tech industrial work to go around or enough highly educated high-tech workers. The unemployment problem is greatly concerned with people at the bottom of the labor market who are considered "unskilled"and so-called low-value added industrial work would be a much better use of that scarified and underutilized labor then generic service work. The general tendency of capitalism excepting certain counter-tendencies is towards de-skilling anyways. Supposedly, the US with 12-15 million industrial workers produces just as much value as China with its 100 million+ industrial workers. That seems far-fetched indeed when you compare output as well as the internal weaknesses of American industry, China bulls and defenders of China correctly note that its probably a world market-price evaluation and monetary devaluation problem more than the internal weakness and inefficiency of Chinese industry.
6. As far as manufacturing itself goes only the most extreme neoliberals argue that the US can do without manufacturing but these extremists set the tone of the conversation. The real debate is whether American workers should do the "unskilled" industrial labor that is considered low on the value chain or whether they should only do the high-tech high-value added work that is requires a high-degree of technical and educational training. The typical answer has been all the "low-value added" labor should be left to Asian workers either making far less or working in conditions of semi-slavery while Americans should only do high-value added work due to their high-wages. The problem is there isn't enough high-tech industrial work to go around or enough highly educated high-tech workers. The unemployment problem is greatly concerned with people at the bottom of the labor market who are considered "unskilled"and so-called low-value added industrial work would be a much better use of that scarified and underutilized labor then generic service work. The general tendency of capitalism excepting certain counter-tendencies is towards de-skilling anyways. Supposedly, the US with 12-15 million industrial workers produces just as much value as China with its 100 million+ industrial workers. That seems far-fetched indeed when you compare output as well as the internal weaknesses of American industry, China bulls and defenders of China correctly note that its probably a world market-price evaluation and monetary devaluation problem more than the internal weakness and inefficiency of Chinese industry.
Other factors like the TTP and TTIP as well as the ultra-aggressiveness of the democratic foreign policy program in this witches brew must be left aside for now, although no doubt they play a massive role. This immiseration program is one of blood tribute from a working class already experiencing major mortality increases while being bled dry, it is not a concrete program of re-industrialization. Hudson is saying that prominent economists are expecting mass expatriation and further demographic collapse of the American body politic especially when Obama is expected to hammer the TTP hardcore on the domestic population after the elections. The caveat here is that Americans have no place to go, in general, they only speak one language: English. That was not the case in the Greek, Latvian or Russian situations. It should be noted that 2016 saw record levels of US expatriates renouncing their citizenship thanks to absurd rules that tax private foreign income of citizens while leaving foreign earnings of major US corporations largely untouched or smuggled in through the back door. Dissatisfaction with the quality of American economic or social life as well as the general deterioration in the quality of American culture is one major factor in this that the US media will probably never bring themselves to admit. Disgust at America's horrid reactionary and bellicose politics as well as its hyper-liberal and individualist "left-wing" is another factor that I think could even make Superman say "I Quit!" or turn Captain America onto fascism.
Either way the American elite have no solutions to offer. They are so rapacious that if they had solutions they would not offer them, they are rabid opponents of the most niggardly economic reforms that might diminish their wealth and power.
