Good Morning Middle America, welcome to the King of Simple News Network, where all the financial news is reduced to English.
Jeremy Siegel, PhD s column a couple of days ago touted the virtues of South Korea and the bright future that he envisions for that Asian country. What his reporting failed to say was how South Korea has obtained those virtuous attributes and what the bright future has in common with Middle America’s not so bright future.
First things first, 36,900 American soldiers lost their lives and another 103,000 were wounded in the Korean War (1950-1953), which liberated South Korea from being a colony of the Japanese.
Secondly, the U.S. has provided aid to the South Koreans of $13 Billion in military and financial contributions between 1946 and 1978.
Thirdly, U.S. Big Business has not changed all that much since 1953 and never saw a cheap laborer that they didn’t like. Thus, “Made in Korea” replaced “Made in America.”
When you combine the three above listed elements, we have the South Korea that Mr. Siegel speaks so highly of and the Middle America that is a casualty of America moving away from America.
South Korea has now reached approximately 60% of comparable American wages and the distribution of such wages is relatively equitable. That’s good for South Korea huh?
Well not exactly. South Korea was built on cheap labor, foreign aid, foreign manufacturing moving toward that cheap labor, protective tariffs, and a business model of surplus exports, oh, and growth, growth, growth.
This worked out real well for the South Koreans until lately. Seoul is now home to more than 22 million happy residents who need for that growth to continue in order to remain happy. The Chinese see it differently. They would rather the Chinese be happy, and taking the business from South Korea with even cheaper labor is what makes them happiest. It also makes Wal-Mart nearly ecstatic.
So now South Korea finds themselves in a little bit of a conundrum, they ain’t the cheapest country on the block and they’re losing jobs. They also have an aging population and a low birthrate. This is not good for a country whose economic model of exponential growth and surplus exports is at the main of their existence.
So how did they get in there present mess? Easy, they copied the U.S. economic pyramid plan. With the assistance and insistence of the U.S., that unchecked growth was the only way to fly, Korea is finding themselves in the same mess that we are in.
To give you some idea of just exactly how closely the Koreans are linked to the U.S. plan of Middle Class extinction, their next venture according to Mr. Siegel, will be to become the financial center of East Asia. Banking is sure working out well in the U.S.A. at this point.
Leadership folks, we need leadership. When I say WE, I’m talking about Middle Class America, the very wealthy already have leadership, they bought theirs in Washington.
Wake up Middle America, that “E” on your gas gauge doesn’t stand for Encouraging.