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Hernando Today

A Most Inconvenient Truth: The Party's Over

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By JOHN NASH, Of Cabbages and Kings

Hernando Today

Published: October 4, 2008

Many will be upset by this fact: We — all of us — have created our critically ill national economy. The only way to save the patient is through disciplined use of bitter medicine.
For more than a decade, I have been attempting to warn readers that we were rushing, mindlessly, toward economic meltdown. My conclusion was primarily derived from three factors: We were becoming a nation of services, rather than producers; we were ignoring the major and inescapable influence of global trade; and we were frolicking in a dream world, characterized by easy, over-paid jobs, the acquisition of things we couldn't afford and didn't need, easy access to unjustified credit and a dangerous belief that the meaning of life was to "live for the day," leaving tomorrow up to others.
Our national motto, rather than "In God We Trust," seemed to be "If it feels good, do it!" Let's (once again) look at those three, now critical, points.
An irrefutable economic truth is that the strength of a nation's economy is primarily derived from the production of things. It is bushels of wheat, ship bottoms, miles of railroad, gallons of oil, pairs of shoes, numbers of automobiles, tons of steel, pork bellies and bales of cotton that create a strong and lasting economy. Most of any nation's workers should be directly involved in that sort of work, but our population is overwhelmingly employed in non-productive "services," which is a sure formula for failure. Those services are sometimes partially supportive of production, but all too often, they, like leeches, only feed from their "hosts," adding nothing of economic value to the nation.
A recent report revealed that the most popular course of study in our universities is law, while majors in such as science, engineering, agriculture and mathematics were far down the list of preferences among new students. So our colleges crank out more lawyers than anything else, but lawyers produce nothing (other than aggravation, clogged courts and avoidable expenses). We have far more of them than might be needed if serving the entire world, but because the work is relatively easy, clean, comfortable, falsely prestigious and very well paid, it is a top choice for many seeking easy work for big money. A large majority of members of Congress studied law; many were actually admitted to a bar in some state or another. What have they done for us?
Need I say more?
Entertainers, professional athletes, estheticians (love that new, impressive term for "beautician") don't add to our economic strength; neither do consultants, psychiatrists, nor personal trainers and other services. Our huge imbalance between productive and service workers has dangerously undermined our economic base. To attempt to save our tanking economy, workers must choose productive, rather than the more-attractive service careers.
Although many continue to believe that we can have a successful economy that is not interconnected with global markets and forces, they are living in a dangerously misleading dream world. Consider, if you will, just the most recent evidence in which, even at the moment it was reported that our Congress would not pass legislation to bail out irresponsible credit agencies, financial institutions and borrowers, stock markets from Japan to London reacted negatively. This unavoidable interrelation means, to you and me, that those vital goods, which we should be producing, need to be priced competitively on that world market.
Tariffs, embargoes and isolation will not work. To sell our motor vehicles and aircraft in India or Italia, they must be priced to sell against similar products made in those places. We simply cannot do that if our labor and materials cost manufacturers more here than there. This particularly unpleasant medicine involves serious cuts in pay and benefits, across the board. Rampant, unchallenged, wage and benefit increases over the past 50 or so years are a major reason why our products are not competitive on world markets. It'll be painful to reverse the process, yet it clearly must be done.
Along with moving into work that adds real value to our Gross National Product (GNP) — not to be confused with that deceptive, new measure of economic health called our Gross Domestic Product (GDP) — and to accepting globally competitive wages for comparable products, we desperately need to recalibrate our expectations.
Not everyone needs, deserves or should have similar homes, college educations, luxury cars, recreational boats or exotic vacations paid for by working shorter hours and producing less for more money. All of us need to take hard looks at what we need and can afford, based upon what we can reasonably expect to earn from our labors — rather than by depending on artificially established wages, along with government handouts, mandates or assistance. I believe that's what we once referred to as "living within our means" — a phase that went out of style along with "the Protestant work ethic."
Our economy needs a buildup far more than a bailout. We simply must get back to producing useful and widely demanded things, which were developed by practical engineers (rather than consultants with dime-store MBA's), then produced by dedicated and hard-working laborers, such as farmers, miners and machinists. Next, we must bite the bullet and accept reduced wages and benefits so that our products compete well on the global market. Those two steps will result in widely reduced lifestyles, which is, I believe, better than attempting to eek out a living in a destitute nation, that's been reduced to Third-World stature.
It took us a couple of generations to thoughtlessly and carelessly create our current, failed economy. Even with the measures I've suggested, we may never again see the past age of affluence — but without recognition and acceptance of these inconvenient truths, along with a national commitment to get to work producing things and living within realistic budgets, we may well end up with little or nothing at all.
It's past time for all of us to roll up our sleeves, and tighten our belts. The party's over!

John Nash has been a published journalist and photographer for over 30 years. He welcomes rational comment, which may be sent to him at john@have-eye.com.

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