US Business Boom Abroad
Masks Domestic Mediocrity
byDan Ehrlich

Rise and Fall of Middle Class Here and There
Profits at major American corporations are up, the stock market is soaring and our leaders repeatedly tell us the great recession of 2008 is history. When in fact it will still be with us in 2011. That’s because the nation is carrying record high unemployment of 9.8 percent, or 17 percent in real terms.

The “recession is over” claim is a feel good attempt designed to divert our attention from high unemployment, the declining middle class and the fact that the bulk of American industry is anything but patriotic.

The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. Robert Scott, the institute's senior international economist says the additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent.

“There's a huge difference between what is good for American companies versus what is good for the American economy," Scott says. The fact is: American jobs have been moving overseas for more than two decades. But now, the products being made are high tech goods as well as clothes and toys.

On top of this, much of what US firms are making abroad is staying abroad…being bought by foreigners while the US domestic market still is in a subdued recession mode.

“It’s the economy stupid,” that Clinton era rallying cry is what today’s politicians keep skirting around, diverting us with a few key side issues, such as gays in the military, abortion, women’s rights and the Israeli-Palestinian conflict, from the reality of globalization… that vague locale where the political Right and Left meet.

The Left sees the global market as the death of the nation state, which it loathes, and the birth of a global society of growing equality, where the lion will lie down with the lamb. The Right sees it as the normal progression of free market capitalism with new markets for American industry, the end result being world economic zones controlled largely by super banks.

So far the Right is far ahead of the Left. Much of the world has been divided into economic and political zones, including NAFTA, the EU, SEATO and the African Union. And globalization has allowed, or forced, American firms to open up profitable operations abroad, while leaving their home country in the dust.

The main success the Left can claim is a growing middle class, if you can call it that, in overpopulated developing nations. By 2015, for the first time, the number of consumers in Asia's middle class will equal those in Europe and North America combined. Which is understandable since the American Middle Class has been in decline for several years and the Asian version is growing by virture of the West's appetite for its cheap goods and services.

"All of the growth over the next 10 years is happening in Asia," says Homi Kharas, a senior fellow at the Brookings Institute and formerly the World Bank's chief economist for East Asia and the Pacific.

And, who serves these new consumers? US firms do, such as that most all-American icon Coca Cola. Of Coke's 93,000 global employees, less than 13 percent were in the U.S. in 2009, down from 19 percent five years ago. More than half of the 15,000 people that Caterpillar Inc. has hired this year were outside the U.S. The tractor maker from Moline, Ill. has opened two plants in China.

So, while Bill Gates and Warren Buffet are busy backing America with their millions, other major players are backing the very people that are helping to impoverish America. There may come a time when we won’t be able to afford the stuff China makes. But that won’t matter so much if China develops its domestic market…which will be a neat trick given the repressive nature of the Communist nation.

Yet, we know little of this back home. We are more likely to know the finalists on Dancing with the Stars or America’s Got Talent, the latter show pointing out an irony of the times as to who really has the talent these days.

We have been involved in three major conflicts, all of which had no concrete relationship to America’s security. Vietnam wasn’t about Communism. It was about maintaining American economic and military hegemony in the region. Iraq wasn’t about weapons of mass destruction. It was about an Arab leader our leader didn’t like and the oil and fat military contracts he did like.

Afghanistan isn’t about terrorism so much as being a reaction to 9/11, as was Iraq, as well. These conflicts also serve to justify maintaining an ever more costly Military Industrial Complex. However, even this has limits. If the nation continues to decline economically, we will have to make military cutbacks.

But, the con job of all con jobs was our 50-year-long Cold War with the Soviets and the fantasy of a planned Communist takeover of America. What makes this a supreme irony is the fact our own capitalist system has led us into an economic straight jacket with the biggest commie nation of them all.

Still, no conflict arguably continually garners more headlines and comments than the Israeli-Palestinian mess, a situation that doesn’t even directly involve America. Yet, when Israel builds a few houses on the West Bank it’s like the darkest days of the Cuban Missile Crisis.

This plus more light entertaining such as Olympic Games, sports, social networking, the cult of celebrity and entertainment help blind us to real issues such as the economy, poverty, pollution, global warming, overpopulation, dwindling energy and other essential resources that are becoming more serious with each passing year.

Underpinning much of this is the growing lack of quality education among America’s young. During a recent interview with a major university journalism department, one of the students asked me: “How would you integrate Twitter into the school newspaper?”

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