Thursday, November 14, 2013

Disadvantages to Advantages: Our Evolving Economy

            The current generation is having a hard time finding jobs. There are a few reasons for this. We will begin by looking at the economics of America and how it got to this point. Time to use that education, right? The current problem with the United States has been happening for years. The problem starts in the 1975 in Youngstown Ohio. The steel plant there is closing because foreign markets are undercutting US steel companies and fighting to take the global market. This is fine, but it is not a fair market. The Japanese government is subsidizing the steel to cut the legs out from under the domestic steel companies. The government under Jimmy Carter could have done something, but the president decided to just let the free market take its course. The Chinese are also starting to build us their economy and positioning themselves to take a leading role. Relations between China and the United States began under Nixon and are beginning to bud.
            Fast forward twenty years, and now we are in the 90s and everything is running smoothly. Everything is now made in China, but all those wonderful white collar jobs needed to support the growing capital are rapidly paying high wages. The money is flowing through the economy and Regan has just smashed the Russians. There is no limit to how much wealth and happiness can flow through an economy. Happy times are had by all. There is so much money flowing that banks begin to demand deregulation and the removal of the Glass-Steagall Act under Clinton. China now begins to want acceptance into the world trade organization. Cheap goods are flooding into the America market like never before. Everyone is so happy that they are saving money on these goods, Wall Street is up and behind the scenes playing with dangerous new investment tactics, and now bundling house mortgages. The markets are beginning to declare that we are transitioning to a new service economy, which leads everyone that would have normally gone into manufacturing to go to College. Remember, we (society) were being told that College equals success in this new global economy of white collar jobs! Workers go to College in droves, which sends the demand for College through the roof. With expensive text books and student loans in hand everyone is off to College. College no longer becomes a place to advance your mind, but a training ground for those white collar jobs.
            America goes to war in the early 2000s, and starts spending money on credit. The economy seems fine with everything going so well. The government convinces everyone that Iraq has weapons of mass destruction and the money starts flowing to the military. Expensive defense contractors start making money like it is going out of style, and they love it. The more we stay at war, then the more they make. This gives them plenty of money for lobbying the government for more money. The war continues far longer then it ever should have gone. The companies keep pushing for longer and longer wars, which drives us deeper and deeper into debt. We are paying for these wars from the Chinese and other countries abroad. So, we bought from the Chinese at low prices and were borrowing from them to pay for wars we couldn't afford. They were taking our jobs and loaning that money back to us with interest. Well Played China! Well Played!
            So, how does all of this mean bad jobs for the current generation about to leave College? Fast forward to the Great Recession. The housing bubble burst causing our economy to take a nose dive. The Fed realizes that we are about or take our entire economy down and our allies. They panic and flood the market with money, and banks are happy to take the money (because we peasants can't be trusted with it). The banks promise to start lending money, but then never do. Surprise, they lied! Companies panic causing they to stream line everything that is not needed. White collar jobs are not needed to support manufacturing jobs if there are not manufacturing jobs. Companies "cut the fat" at record rates. The supply of college graduates has never been higher, and goes through the roof with a steady stream of workers getting laid off. Supply and demand takes effect. The supply is up, which means the demand is low. College graduates become easy to get, which makes them disposable and replaceable. They can now pay you whatever they want and you just have to take it. China is now revving up their education system to take the white collar jobs away from the United States. This means we are now competing both domestically and internationally for the same jobs.
            Why is all this happening? Who benefits from this. I'll give you one guess! That's right, the top 1%. They get cheap goods to sell you and an unlimited supply of talent that they can basically set the wages for. They are now benefiting from the cheap goods and the low cost of both college educated work force here and the non-college educated work force abroad. Here is the real kicker. They are not even willing to pay their corporate taxes to help the American people get out of this student loan debt that they helped put us in. However, the simple fact is that we cannot look back anymore. Yes, more could have been done to prevent these things from happening, but we are where we are.
            We need to start figuring out how to get out of this mess. The fallout from not getting out of this mess will be enormous. If young people cannot find an income source of some sort, then they will not move out, have children, or consume goods they would have had the money to buy. The fallout we are facing is simple and drastic. A young generation with no way to support themselves will not have children they cannot afford, which will cause the birth rate to fall through the floor. People arguing over population might like this, but a work force that cannot replace itself causes problems. The Japanese are having this problem as we speak right now along with Europe and soon to be America. Older generations will not be able to retire due to having to support children into their 30s (Spain is a flawless example of youth unemployment). The young people will not consume in the market like they did before, which will cause a loss of companies that carter to the middle class with luxury goods. The fallout will go on and on, and it will snowball. So, what can be done?
            Bill Clinton did come out with a book awhile back. He talks about how America needs to do things that others cannot. I agree with the emotion behind what he is saying, but I disagree with his conclusion. Anything and everything we can do can be done better and cheaper somewhere else. Big investors can absolutely find another country without a crumbling infrastructure and with a government willing to work with them. Australia, Switzerland, and France have done a great job to keep their economies thriving. People are beginning to put forth ideas about to fix the problem, but I believe that they are missing one key thing that young people have on their side in spades - a love and working understanding of technology. Stay with me and I'll give you my solution, I promise.

            Think about what you're good at. Now, can you start selling that with your out of work free time and parents wifi? Ebay and Amazon will be happy to help you make money if you help them make it to! Can you make awesome wooden toys? Great, start selling those on Ebay. Are you good at graphic design for t-shirts? Great, start printing some up and find buyers on the internet that like your designs. Start your own website. Are you a good writer? Great, start a blog like this one. Are you a good musician? Great, make a YouTube channel and start promoting your music online. I'm not saying that you should quit your job earning low wages, and we should push for a living wage. However, I'm saying that it is time for my generation to start something. There is a great book called "Poke the Box" where the author argues that everyone needs to get over their fear of starting something. He goes on further to say that our society has been taught to be complacent. I'm taking his argument one step further. I'm saying that right now we need to reverse our thinking. Robert Greene talks about turning your disadvantages into advantages in the "33 strategies of war". We keep viewing a group of young people out of work and living in with their parents after graduation as a bad thing. We need to start viewing it as a good thing. We have a generation of tech savvy young people that are College educated with time on their hands. This should not be viewed as free time, but as an opportunity to start something. Get up in the morning and go full steam ahead. Don't be afraid to learn, fail, and figure it out. Young people (and people everywhere) need to no longer view their time as free time, but as time that is not required by something else. I'm arguing that we are living in a world where anything can be ordered online and shipped anywhere in a timely fashion. It is our generation that is tech savvy enough to take full advantage of this. Let the individual craftsman rise and sell his products to a world market that is waiting.            


  1. I think this is absolutely true: "College no longer becomes a place to advance your mind, but a training ground for those white collar jobs." I think there are many people in college who are just trying to get through their courses and make the grade, instead of really taking something away from the experience.

    LOL at "Well played China", and I like the positive spin you put on the whole thing at the end. The future was looking pretty grim there for a while. I think all economies go through cycles. Our economy was too hyperinflated...something had to give.

  2. We have become lazy and sure of ourselves. The turtle has caught up and is passing the hare.