Sarah Palin is very fond of talking about "time tested truths," "commonsense solutions" and "work ethic." Just as her Founding Fathers are a thing of the past, so are her simplistic views of the economy. I'm not saying the American Constitution is a thing of the past, but the way she talks about it and the people who wrote it are completely out of any historical context and amount to nothing more than a few soundbites.
Palin's views of the economy fall in the same category. The days when hard work meant good rewards are in the past. In the good old days, there was a strong manufacturing industry, not only in America, but in most other western countries. People produced stuff, earned money and consumed stuff. That was straightforward capitalism and it was simple. But the world has changed a lot. We now have a global economy. The pursuit of the mighty dollar and the desire to escape the rules and regulations that exist to protect workers, consumers and the environment, drove the big fat cats to China and India. In these countries, their main commodity is a vast, growing population that will work for next to nothing and won't dare ask for any guarantess or decent working conditions. These poor people fall over each other to work like slaves in factories that are free to pollute as they please. And we in the West give them a pass because they are emerging economies and could do with a bit of help in order to grow. This paternalistic approach has nothing to do with helping emerging economies and everything to do with maximizing profits.
The West outsourced a lot of manufacturing and other jobs because we all want to pay less at the checkout. For a start, that's not necessarily true. Sneakers that cost pennies to produce are still sold as status symbols and don't come cheap. The question is: What are we going to use for money? The same monopoly money the big financial corporations play with? Millions of jobs went to India and China, so how are the consumers going to pay for the cheap goods? There are whole towns in America where chronic unemployment has become the norm. Where are the consumers?
There is a climate of fear among the workforce in the US (and elsewhere in the West). In the US, people are afraid to change jobs because they're afraid of losing their healthcare plans. All over the West, people are being forced to take pay cuts because any job is better than no job at all. What kind of work ethic is that? A big section of the population can't even dream of working hard and reaping the rewards.
During the economic boom of the 80s, people got used to the instant gratification that credit afforded them. Buy now, pay later. That was when monopoly money became the currency and oh, boy, are we paying for it now! The economy looked healthy, people were buying like never before, but all the while, the true strength of the economy was being dismantled and moved abroad.
A couple of years ago, the storm that had been brewing during the Bush years hit with unforgiving violence and Obama was saddled with the task of rebuilding the US economy from the debris. How could a country with so many smart people allow it to happen? Are the finance gurus that stupid? Were the people who sold the jobs abroad a bunch of dummies? Well, yes and no. They made a lot of money for themselves and their shareholders, but due to their lack of foresight, they destroyed the source of their profits. An insecure population without jobs or fearing for their jobs don't make very good consumers. Some may still be living in the past and buying now hoping to pay later, but that is a bubble that has already burst. The vast majority of the population are not shareholders, not many people can hedge their bets. They need real jobs, they do want to work hard. What's this job creation Ms Palin keeps going on about? Is it going to be in the service industry, which is money consuming, not money making? Is it going to be in government like in her Alaska, where great numbers of people work in some oil related job or for the government in some way or another?
There are fewer industries left in the US and the money is (more than ever) concentrated in the hands of the very few. Without a proper manufacturing industry, the backbone of the economy is gone. What are the industries that so far have kept the economy ticking, albeit in a faltering fashion? Big Oil, Big Pharma, Health Insurance and the Media, for example. So people can continue to feed their gas guzzling machines with stuff that's declining, swallowing medicines they can't afford for illnesses everybody is afraid to have while they watch reality shows and news that make them even more afraid of their own shadows? Let's not forget the war industry, which has become the new backbone of the American economy. It's no coincidence that it also thrives in a climate of fear. It's also being bankrolled by China...
When Obama proposed buying $600 billion in bonds in order to boost the economy, Sarah Palin asked if the money was going to come out of thin air. What she doesn't realize is that money has been coming out of thin air for many years. That's the monopoly money I mentioned earlier. In the absence of a strong manufacturing industry and very poor prospects for creating real jobs, that's the only currency any president has at his disposal to address an economic crisis and only puts a band-aid on the deep wounds that are affecting a great number of people. Pouring money into the market is a short term patch-up job. The real solutions are far more complex than that.
I didn't hear Sarah Palin coming forward with any proposals for real long term solutions...
Europe still has some safety mechanisms in place and will survive longer, but not forever. The West, in their hunger for cheap profits, transferred economic power to China and shot themselves in the foot. Now all they have is some cheap, make-believe money and not much power.
My views may be simplistic also, too, as I'm no economist, but I think they go a little bit beyond Ms Palin's outdated soundbites. I may be wrong (I hope so), but I have the impression the fat cats are in panic mode, grabbing what they can while they can because they have realized that they have destroyed the economy and their own golden goose. They'll grab the money and run.
Then they'll blame it on Obama.