Nel's New Day

July 24, 2013

The U.S. Could Be Detroit Because of GOP Capitalism

Filed under: Uncategorized — trp2011 @ 8:31 PM
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Capitalism is the system that conservatives worship, so much so that any deviation from it—in their perception—is called socialism. According to the GOP, President Obama is a socialist leading the country to failure. One example of capitalism in the United States is the city of Detroit.

During its automobile-driven economic growth in the middle of the last century, Detroit was recognized as an achievement of capitalist renewal after the Great Depression and World War II. High-wage auto industry jobs with security and benefits proved capitalism’s ability to generate and system the highly-vaunted middle class that cut across ethnic groups. as a system ought to be judged by its failures as well as its successes. The city was an example of the American Dream.

Success came from unions that struggled to take these quality jobs from automobile capitalists, who then bragged that they “gave” good wages and working conditions to their workers. Whatever the cause, Detroit was a prosperous city in the 1950s and 1960s, shaping the world’s music as its capitalism shaped the world’s industries.

Detroit is now in the midst of the biggest municipal bankruptcy in the history of the nation.

Decision-makers for General Motors, Ford, Chrysler, etc. made bad decisions that caused them to fail in competition with European and Japanese automobile capitalists. U.S. auto makers failed to develop new fuel-saving technologies and then responded to their failures by moving production out of Detroit in order to pay lower wages.

These decisions led to two economic disasters: manufacturers undermined Detroit’s economic foundation, and they led to the downfall of the nation’s middle class. The history of the past 40 years have shown the capitalist system’s inability—or unwillingness—to reverse, let alone stop, them.

Wages stopped growing in the 1970s although workers’ rising productivity created increasing profits for employers. For a few years, rising debt and overwork postponed the impacts of the lack of greater wages on consumption, but the crisis came in 2007. The resulting unemployment allowed employers to lower wages and benefits even more, and the falling dominos cut down the middle class.

The stimulus bailed out General Motors and Chrysler, but Detroit didn’t get any of that. The wage reductions in the auto industry guaranteed that Detroit’s wage-based economy would not be able to recover when production and profits rose. Auto industry capitalists took the lead and Detroit exemplified the economic decline that resulted.

After weakening the successes of unions, auto industry leaders undid the hard-won victories of the 20th century. Gone were the middle class and the “capitalist success” city built on their wages. The top-down structure of capitalist enterprises gave auto industry the ability to remove the good conditions that unions can sometimes win for their workers.

Worker co-operatives could have helped Detroit evolve in a far more positive fashion. Production would have stayed in the region, keeping jobs, families, and communities. Instead, lack of jobs dropped Detroit’s population from 1.8 million in 1950 to 700,000 in 2013. With worker co-operatives, owner dividends and manager salaries would have been less. The resulting savings could have lowered automobile prices, enabling better competition with European and Japanese cars.

Workers would most likely have greater incentives to improve technology in co-operatives they owned than if they do as employees in capitalist enterprises. Another achievement from worker co-operatives might have been the production of mass-transit vehicles as an alternative to the automobile production that fails to give long-term security for the automobile industry.

A democratic society does not give power to a minuscule number of people as it excludes millions of people from participating in decision-making.

Meanwhile this tiny number of people, centered in ALEC and controlled by the Koch brothers, has caused at least 117 bills in 2013 to further shrink wages, benefits, and worker rights. Their goal is also to eradicate any worker family’s participation in political and legislative processes to ensure that the top 1 percent will acquire even more wealth. ALEC’s anti-worker agenda started in the late 1970s and gained speed beginning with President Reagan, rapidly accelerating in 2010.

A few weeks after he took office, Wisconsin Governor Scott Walker turned his state into the poster child for the northern states by eliminating collective bargaining for 380,000 school teachers, snow plow drivers, prison guards, nurses, bus drivers, and more. His law also prohibits government employers from using payroll deduction of union dues, removing more of their power. As Walker said, his goal was “divide and conquer”: first attack public sector workers and then go after the private sector.

Walker showed massive failure in his job programs: Wisconsin is now dead last in the 50 states in job creation. Things are so bad that someone called North Carolina the Wisconsin of the South.

ALEC’s “right to work” legislation was designed to make all the states like the poverty-stricken ones in the South that suppresses wages and keeps out unions. In 2012, Gov. Mitch Daniels (IN) succeeded in his state before Michigan pushed the law through in a lame-duck session at the end of the year. As Fox News bluntly put it, “bust the unions, and it’s over” for the Democrats.

Gordon Lafer, a political economist at the University of Oregon’s Labor Education and Research Center and a research associate at the Economic Policy Institute (EPI), explained the strategy: “ALEC’s efforts against the minimum wage, prevailing and living wage, paid sick leave, etc. are an across the board attempt both to worsen any kind of labor standard and also to undermine any institutional or legal basis through which workers exercise some control over the workplace in the labor market.” The fate of union workers and non-union workers are inextricably linked because unions raise standards for non-union workers. An EPI study shows that ALEC’s “Right to Work” law alone depresses wages for both union and non-union workers by an average of $1,500 a year.

New York City has Wall Street, Washington D.C. has the federal government, and Silicon Valley has Google and Facebook.  The rest of the country is facing a decline that began 60 years ago. Gone are the good jobs for people willing to work.

Conservatives recognize that the United States is headed in the same direction as Detroit with its unemployment, smaller wages, and educated people on food stamps. Yet they refuse to acknowledge that the conservative fiscal approach is causing these problems by increasing the income inequity and paying manufacturers to take their businesses overseas. Republicans refuse to acknowledge that huge corporations and the tiny portion of people at the top of the pyramid get their wealth from the loopholes not available to 99 percent of the country’s population.

Conservatives set up systems so that Wall Street can steal from most of the people in the country and then refuse to change them. Conservatives create a failing circular economic system: people cannot be produce services and material things because other people cannot afford to purchase these services and items, and so forth. This is the conservative view of capitalism.

If the Republicans were totally in charge, the United States would be declaring bankruptcy and selling all its assets to Europe and China.

The solution to the approaching disaster is to raise wages and close the loopholes. But the sole goal of the GOP is to defeat the Democrats and gain the presidency in the next round. To make the country a success would defeat the GOP grand plan, so almost everyone in the nation is forced to suffer.

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