Friday, January 29, 2010

Where We are at Today

This Concept has been around since the late 1970s, but seems New and Vibrant because it is now happening to those new Jobs created since the Seventies. It has been a lament from that time, and comes from the simple fact that Wholesalers had turned Overseas for cheaper Product, abandoning domestic labor, and leaving domestic Consumers to develop their own sources of revenue. This has become defined through the very uneconomical idea of abandonment of a Tariff system. Jobs suddenly faced the horror of Wages dropping to the lowest common denominator, and the destruction started to creep through the economy. Fewer and fewer Workers found themselves with Jobs which actually paid for their existence, while World Product Prices began a dreary uniformity; culminating in even the Rich having to pay a huge Price for their Toys. Those with entrenched upward Wage spiral began to draw unbelievable high Salary, while such Positions started a shrinkage of numbers of such positions. Where did it all Start?

The discrimination against Tariffs started in the Great Depression era, when Tariffs drew a great share of the blame for the economic downturn. Producers could not find sufficient domestic market for their Product, and decided that they would sell excess Product in foreign lands. They, and later Economists, refused to recognize the existence of foreign competition and lack of a distribution network; and became angered by the pointless activities of some misguided Legislators. Tariffs were suddenly the great Demon. It did not matter that Business had no foreign Sales network, that the Railways could not handle a much greater increase of Product traffic, or that there were not sufficient Ship bottoms to transport any serious enlargement of bulk traffic. We had a Transport network capable of transference of about 8% of the World’s Product at the time, and a Distribution network which could only handle less than that. A serious evaluation of the Time would suggest an extensive Export network would have not been able to increase labor rolls by even 2% during the Period, and do to the competitive domestic production, would probably not have increased the labor rolls by even 0.7%. Tariffs did get vilified, though, at exactly the Time when a sensible Tariff system was the only salvation for the modern development which has occurred since the end of WWII.

The World has suffered from two main problems in the last half-Century: the first being the production of cheap, poor quality Product in a Time when environmental difficulties demanded much higher quality production; and, the massive Dumping of Product, where Governments engage in activities to sell Product below Cost Worldwide to maintain labor rolls. Competition within Production has only grown with the inferiority of Product expanding, creating vast Environmental and Capital Costs; neither of which elements can be paid for from the actual Production. The Dumping of Product has proven relatively useless in maintaining Employment levels, as more Economies engage in the practice; with Governments unable to maintain the funding necessary for the artificial Production levels. Sensible people have long recognized major alteration of Production decision-making must be made, while the majority of decision makers cling to economic ideals and practices which cannot be met, or paid for within the current context. So We sit with archaic economic policies and plans. lgl

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