Reply #15: The hammer has already fallen, and under the current paradigm

[kcwayne]

nothing will prevent the transformation of the US into a two class system. Once that happens, and labor cost is no longer the primary differentiator between the viability of enterprises, the free fall to serfdom will stabilize, and American knowledge may once again become a tradable commodity.

But Americans are playing on a field that stacked against them and fundamentally unfair. We have paid taxes, and made sacrifices with our lives and health through a sundry of wars to build infrastructure and a culture that created the great economic boom that occurred during the 20th century. Now it is being given away for free, and one group of investors in that enterprise (the working class) have had their stock rendered valueless. The other group of investors that had preferred stock (the capital class) are enjoying a historically unprecedented transfer of wealth.

China and India have not invested heavily in their own infrastructure and created efficient transportation systems, power grids, production technologies, school systems, and building capability which is the entry point to advanced society. They have leap-frogged over that step by getting massive amounts of technology and capital from the west, and that is why their transformation from agrarian economies to manufacturing economies has not raised the standard of living in their countries. That major transformational step was paid for by 4 generations of Americans whose only royalty from the transaction is a pink slip.

Meanwhile, third world cheap labor countries are being given the means to produce things that cannot be sold in their own countries because they will have no market for them until their standard of living rises. Given their historical adherence to maintaining slave laborers, which Western capitalists are only too happy to exploit, who knows how long that will take? The decline of the US economy looks to be accelerating much, much faster than the growth of a consumer class in these countries. They will not be able to buy product to replace the volume that wage destruction in America is vaporizing, so their ascent from feudalism is directly affected by the health of our economy. They have significant challenges ahead of them as well.

There is no question that Americans have to adapt. The truth is they will be adapting to lowered expectations, and the lives of todays children will have the same level of economic insecurity of my grandparents, who had very little, but lost it all in the Great Depression.

The winners in this game are those that already have their capital deployed in third world operations and can take advantage of the innovation that springs up over there, or who come across a niche here that can be successfully sold to a population base that has virtually no disposable income.