Free trade meant that factory jobs could be outsourced around the globe to places with negligible labor costs and unprotected workers. And then, voila! those cheap foreign made goods could be re-imported to the U.S. duty free.
The uneven playing field became the law of the land.
CEOs pocketed the profits cheap foreign labor provided and CEO pay went through the roof. The penalty for dismantling a once vibrant industrial base was gone, replaced by unimaginable riches for those at the tippy top of the income pyramid.
American workers didn’t fare as well. No longer in a position to bargain with management for the cost of their labor, they accepted whatever they were given and were happy just to have a job. Earnings stagnated, inflation climbed, purchasing power eroded.
Cheap imported goods, an economy awash in credit, and declining real wages paved the way to disaster for millions of Americans struggling to cope with economic factors beyond their control.
Both unions and the middle class were headed for the trash bin of history with the full knowledge and consent of the governing class.
Workers in other parts of the world were equally vulnerable. Beginning in the late 1990s, factories and employees were discarded with reckless abandon in country after country, as capital moved to the next hot spot of miniscule wages and nonexistent worker protections, first Mexico, then Thailand or Vietnam or China.
In the U.S., each announcement of a factory closing, jettisoned employees, or increased outsourcing was met with a rise in the Dow Jones, accurately reflecting the hostility of capitalists for the worker.
As Wall Street revels in its taxpayer financed wealth bubble, foreclosures on Main Street escalate; reports of stress-induced suicides, homicides, child abuse and domestic violence increase; families move in together and try to make cramped living conditions work; tent cities sprout everywhere.
Millions have made their first ever trek to the unemployment office; seen their possibility of retirement vanish with their 401Ks; taken a pay and benefit cut; or were jolted with the realization that they and their families no longer had health insurance.
But a worse catastrophe may be in hiding in the shadows.
On Wednesday, June 4, in front of a congressional committee, Federal Reserve Chairman Ben Bernanke went public with the plan he had held close to the vest since his endorsement of the trillion dollar taxpayer giveaway to his Wall Street friends. He says the U.S. must “maintain the confidence of the fiscal markets”, i.e., protect the interests of the Wall Street thugs and the banks-too-big-to-fail by imposing austerity measures on the U.S. population. He wants major cuts in all public spending, including Medicare, Social Security, unemployment benefits, education and health care.
With the big manufacturers facing bankruptcy and the Bernanke, Geithner and Obama triumvirate feeling the need to shred the safety net, it’s conceivable that the middle class slide will not end simply in a lower standard of living, but in poverty and civil unrest.
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