Regarding the Aug. 20 letter to the editor, “Collapse of the middle class,” by Tom Falter.
He should think of all the industries that hired the middle class in the U.S. that lost their businesses and their jobs to our competitors in China, “who can sell for less because their costs are less.” Water flows in the direction of least resistance, and business flows in the direction of least cost.
Ford announced discontinuing making sedans and Fiesta cars (and maybe those jobs), because, after costs, their was no profit, which is an essential business requirement. U.S. steel and aluminum industries can not compete against China’s low prices, so (to protect our military supply of steel and aluminum industries from going out of business) we must raise Chinas’ selling cost to our playing field costs and prices (with tariffs), because we can not compete on their lower-cost playing field.
We make all cell phones and LED light bulbs in China, (we buy more low-cost items from China than they buy high-cost items from us) the reason is self explanatory. To name only a few reasons for our predicament;
The average wage in China is LESS THAN ONE TENTH the average wage of a U.S. counterpart, despite our higher productivity rate. We have lost industries and jobs to an uncompetitive business cancer, which our affected businesses must cut costs to survive. Is this an indication of our future? Much of U.S. high costs are fixed. The U.S. now pays half a trillion dollars interest charges on $ 21 trillion in debt, which is scheduled to increase. We have student debt, car debt, housing mortgages, cellphone, cable, credit card expenses, etc. America “runs on debt – not on profit.”
Some cities are now providing “safe areas,” where people who have lost their jobs and housing can sleep in their cars safely. Is this an indication of our future? Our government regulations are all based on past U.S. dominance of world business with middle class opportunities for a better life. Unions were able to organize for strength to negotiate for higher wages, security and benefits, while our industries were all playing on our own high-level playing field.
Now, we are competing against a world marketplace of lower living standards and lower costs with lower prices.
The “law of the marketplace” rules that in business – “competition dictates policy” – based on the last 30-40 years of losing 70 percent of our industries (and jobs) to China. We are out of touch with the reality if we think lower-cost competition has ended. “Business is war,” business must fight for every sale. Our competitors are also fighting for that sale. Every job in the U.S. requires a boss with a business to fund it. We are keeping ourselves happy with debt.
We should be very scared about maintaining our living standards with more debt. Politicians, to protect their government jobs and power, will inflict no pain on voters. They are only capable of maintaining constituents (unsustainable) benefits with more government debt. Therefore, it is the marketplace, (not the government, nor your employer, nor unions), that will dictate our industries’ future. Our competitors can not put us out of business, if we have the lowest costs. But, our costs are high.
What happens if austerity is required to cut costs? How do 43 million people on food stamps cut their costs?
Seventy percent of our entire economy is based on consumer spending. What does this tell us?
Our economy is currently very strong. We have more employment and more money in our pockets. The question is: Will we be able to maintain it forever?
Maybe now is the time to start practicing the Boy Scout motto, “Be Prepared.”