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Economics 102

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By JOHN G. NASH

Published: January 8, 2008

The stock market may not be in free fall, but it's sure scrambling frantically on a very slippery slope. This one fact affecting our nation should be of greater concern to us than any other — including such as Iraq, immigration, loan failures, medical care, social security, or even Britney Spears. The reason why our economy is headed south is a far more "inconvenient truth" than is Al Gore's opportunistic, politically-motivated lamentation about a falling sky. In fact, it is probably more "unacceptable" than "inconvenient." We simply will not face up to current economic reality, because effective corrective action will hit most of us where it really hurts — in the pocketbook. Yet, if we fail to recognize economic facts, and act quickly to correct those that threaten us, our pocketbooks will be emptied; not just slimmed down, as is happening right now.
As I see it, our national economics are today being most affected by five factors:
Increased involvement of central government in what should be individual or state responsibilities.
The direct involvement of foreign nations in our fields, factories, and investments.
Rapid growth in the service sector, at the expense of material production.
Unjustified and unsustainably high wages.
A general lack of what once was called the "Protestant Work Ethic."
Let's look briefly at each, in order.
Even as I write this column, hopeful politicians promise thoughtless, greedy masses even more financial assistance from Washington. The more popular offerings include such as: free baby sitting; social security; universal and free medical care; increased wages for the average worker; a college education for everyone. The Democrats indeed seem intent on turning this into a socialist nation, where the government offers everyone cradle-to-grave financial aid, which will be paid for by increasingly taxing the "rich," upon whom our success as a world economic power has always depended. This careless, selfish, growing support for socialism will inevitably lead to financial ruin for the nation.
There are several differences between the Gross National Product (GNP), and Gross Domestic Product (GDP), which replaced it. Very simply put, that newer measure of our economic health includes the products and services of foreigners and foreign owned/controlled businesses in these United States. When we look at the periodic reports of our GDP, it doesn't look too bad, but, when you subtract the foreign element, it becomes shockingly clear that our economy is indeed seriously ill. Billions in profits made by Japanese auto manufacturers, located here, go back to Japan, and an estimated 80 percent of all wages earned here by perhaps 30-million illegal immigrants are regularly wired back to Mexico. Does it make any sense to consider those monies as part of our national economic picture? Of course not — yet we do. Were we using the GNP today, it would show clearly how sick our economy has become over the past 50 years.
Some say that as much as three quarters of our jobs are now in the service sector. If true, that is a sure recipe for disaster. Any nation's economic welfare depends primarily upon production of things, not services. Yes, we need waiters, teachers, military, firemen, even lawyers and consultants, but the foundation of our economy is built by such as miners, farmers, machinists, carpenters, ditch diggers, butchers, scientists and engineers. Today, we have far too many of the former, and a dangerously low supply of the latter.
Perhaps the one part of this four-point discussion that is most unacceptable to nearly everyone is that of wages. Very simply put: if we are going to compete successfully on an international scale (and we must if we are to survive for another century), our cost of producing a pair of shoes, for example, must be competitive with shoes produced by other suppliers, in other nations. That is impossible, if we continue to pay our "shoemakers" significantly more than those working in distant nations. Stated in another way: either we adjust all of our wages to make them competitive on a world basis, or our ratio of imports to exports will grow continually worse. Of course, the required pay cuts involve major sacrifice by just about all of us; that seems unlikely to happen.
You may be puzzled — even offended — by my use of "Protestant Work Ethic," but many will know what I meant was: A man is obligated to find and keep work that will help support his family. Such "work" is whatever he can get, no matter how important nor demeaning the job title, nor how pleasant or difficult the work itself. Today, jobs go begging, or are filled by illegal immigrants, because they're beneath our station, aren't "fun," or don't pay as much as we get from the government for watching television and drinking beer. The solution is obvious: make severe cutbacks in unemployment and related welfare benefits to those whom could work, but won't — which may be two thirds of current recipients. No unemployed person drawing welfare should be considered to be "overqualified" for any job opportunity: they must either accept, and work at, the job given, or lose all welfare benefits.
It isn't likely that any of these weaknesses in our national economy will be fixed in the foreseeable future. Not even one of the current crop of babbling candidates for our nation's highest office has said anything significant about our tanking economy: indeed, what they are espousing is socialistic action to further accelerate the arrival or economic Armageddon.
Meanwhile, there's always mindless mayhem, such as professional football, to divert the minds of the proletariat. Hey, that worked for Rome's emperors — at least until the World's first great empire collapsed to become a pile of once-grand marble columns. Long live the Emperor! Let's tailgate! After all, tomorrow is, as Scarlet sagely pronounced, "another day."

J.G. Nash is a widely traveled, and broadly experienced, journalist and photographer, whose work has been published in more than 100 different publications. He's been based in Florida for the past 25 years, and welcomes your comments, which may be sent to

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