WHY GETTING INVOLVED IS A MUST?
I am a humble grocer. Like billions of people I would be more than satisfied investing my time and energy in running the business and taking care of my family. I am no different than anyone of you. I long to relax and enjoy some time of leisure with family and friends. However, reflecting on how in the recent decades, the western world has seen the destruction of the manufacturing section and as a result, the erosion of the middle-class, I became extremely worried about the future.
Ideally, it would have been of a great convenience to let our political leaders take care of the economy and the task of creating jobs. However, how can we entrust the same people with our future and the future of our children after we have seen firsthand their poor performance in the past. How can we trust the same people whose incompetence, ineptitude, lack of vision and impotence have brought the working man down to his knees. Do we wait until we let them break his back as well or do we take action now? Friends we have no choice but to take care of our own affairs. We must show our political leaders how to revitalize the economy and in the process revive the middle-class. For the simple fact that governments and politicians never succeeded in the past at averting an economic crisis.
Obama, the leader of the western world, paints a bright picture of the economy. He even has the audacity to brag about his achievements. With a trillion dollar deficit you think he should know better. Sadly, the republican leaders and other world leaders are no different. They all seem to be in a state of denial. They all have no clue on how to inject life into the economy.
The first step to restore prosperity is to recognize the fact that we are in a state of economic depression and should we fail to act now, we will be facing a major catastrophe that could bring the end of the western civilization as we know it. In the previous chapters I had explained why this total meltdown of the economy could take place. Now before we go any further, let me explain why the economy is in a state of depression or it will soon be and why you should ignore any talks about a recovery – particularly from politicians.
THE BOGUS RECOVERY AND THE SIGNS OF AN ECONOMIC DEPRESSION
The jobless rates may seem to be improving, however, when one looks at the over all picture, the labor force has been shrinking. Moreover, most of the jobs created are low paying jobs or part time. This by itself may not be considered a sign of depression, however, the fact that we have more people retiring than those who are vying to take their place is. Soon, the trend will be reversing itself, in that we will see more people waiting to enter the work place than those who are retiring. This is when we will be experiencing a huge increase in the jobless rates and this is when it will become evident that we are into a depression. Conversely, the situation would be similar to that of the great depressions and the earlier recessions of the seventies and the eighties. The only difference is that back then, there were a lot more young people ready to enter the work force than those who were retiring. Therefore, except for the great depression, the labor force was on the increase during all previous recessions, even when the jobless rates were high.
Notice how there are no warnings when a depression or a recession strikes. This is going to be the case for the next depression. Though, there are many economic analysts such as Allen Greenspan who are worried about the future, no one knows exactly when the next depression is going to hit us. They all talk about how the population is going to shrink and how the baby boomers will be gone to be replaced by a poorer generation. As indicated earlier, the impact on the economy will not be limited to the decline in numbers but also to the size of wallets. We may not be experiencing a depression now, but we will be. Our political leaders can ignore top notch experts like Greenspan or Bernanke, but they cannot ignore us as a collective movement. We must get together and send them a strong message before we lose everything our ancestors have worked so hard to preserve and build.
There are other signs pointing to an upcoming depression. For instance, large governments were made possible thanks to a strong economy. In contrast, the public sector has been cutting jobs and will continue to do so as the population shrinks. The IT revolution helped us get over the recession of the nineties. As the economy loses the support of the boomers, this sector will be cutting jobs as well. When all the jobs lost are added up, by themselves will trigger a depression.
There are more depressing developments to unfold. For the longest time, young people have been able to borrow for education, consumers have been able to pile personal debts, governments had no trouble printing money, retirees kept the retail and the service sectors alive and low interest rates helped the housing market and the auto industry thrive. Most importantly, it helped the stock markets around the world create wealth that boosted the economy – in the U.S. in particular.
All these breaks helped the economy maintain a simile of robustness. However, they will not be much help in the future. In fact, as the boomers fade away, all these factors that played an important role in preventing the economy from collapsing will become major liabilities. For instance, the financial markets will crash, wiping trillions of dollars in wealth. Surviving banks will have no choice but to stop landing money. All sectors of the economy will be forced to lay off a large percentage of their work force – if not shut down.
Even universities will be affected. Though, we are already talking about the value of higher education, the time will come when young people will no longer feel eager or excited about enrolling in colleges and universities. Why spend money and put in the effort on obtaining a degree or a diplomat if this exercise is not going to be of any use or help in landing a good paying job? With this development, universities and colleges will be facing a huge drop in enrolment. Not only are they facing the challenge of having less students as a result of low birthrates, they also have to deal with many who are refusing to enroll. This is somewhat ironic, for not long ago, encouraging and convincing young people to seek higher education has helped bring the jobless rates down, some may even argue that it even prevented a recession in the early sixties.
Governments will resort to printing more money. But, as we have seen early, this time around, such measures will have the opposite impact and may cause the currency to become worthless. All this chaos will cause an economic meltdown and may also bring the collapse of the Western Civilization. And this is why I am urging you and everyone else to take action and get involved in preventing a devastating crisis from happening.
Some economists and several experts who believe in certain dogma and ideologies will be fighting and attacking the measures we are proposing. Do not listen to them and fight back. I have heard the advocates of the free market system preach. Those enamored with self-reliance and individual initiative. The defenders of the Adam Smith philosophy. Well, to begin with, we are not stopping anyone from taking initiatives to start their own enterprise or venture, in fact, we are all for the revival of the enterprising spirit. However, things have deteriorated so much in the past that the private initiative on its own cannot revitalize the economy. The doctrine that Adam Smith came up with was introduced a time when entrepreneurs made up a large percentage of the population. This is no longer the case. The conditions, the culture and the environment have disappeared longtime age. Small entrepreneurs, artisans and craftsmen have become a vanishing breed. Centuries of consolidations and automations have turned most of us into robots. The pool of small business leaders have been drying up with every new introduction of additional regulations and red tapes. Nowadays, a plumber must know about regulations and codes just as a chemist must know about equations and formulas if not more. The same goes for all businesses.
As a small entrepreneur I find the enormous rules and regulations to be very demanding if not overwhelming. All in all, our entire economy has shifted to accommodate the multinationals and the conglomerates. With their size, they are in a position to afford the help. You can only delegate if the size of the business allows you to do so without going broke. I would like to see those so called experts and fundamentalists successfully run a small business.The notion that governments should not be interfering in the economy is a fallacy. It takes a certain person to succeed in business – particularly nowadays. Running a small business was an enormous challenge even when things were much simpler in the old days. But, at least in the past, one was able to learn a trade or a craft from someone who was already in business. Well, no such luck today. Furthermore, being a small entrepreneur was the norm in a large percentage of families, it was also part of the culture, part of the collective spirit and fabric of every community of every neighborhood. Sadly, this is no longer the case. International trade has and the throwaway society have finished the job of destruction that big government and big business have started.
In the grocery business which I happened to be in, there are no more than three major wholesalers in the entire country of Canada. It is safe to say that back when Mr. Smith worked on his doctrine, there were a lot more than that. The whole grocery market is now dominated by so few players that if the trend is to continue, the whole grocery industry would be controlled by a handful or multinationals. Allow me to give some examples. One large corporation who owns a large share of the snack crackers market happen to under produce around Christmas one year. What happened was absurd. There was a shortage of crackers for that season. Lemon juice shortage, oatmeal shortage and other staples can be added to the list.
Here is how the food retail market works. Unless you happen to be extremely powerful, you cannot get in the game. The days when one was able to sell any product to the local grocer are long gone. The decisions to carry any product are taken in a head office that could be located a continent away. Of course, there are the odd exceptions, but they are merely staged for PR consumption. The food business is one example that can be duplicated in every sector of the economy. For instance, try to procure a franchise for a postal outlet, you will soon learn that you cannot stand a chance against the multinationals. This is not the type of a market or an economy Adam Smith has envisaged. We are into a different time and environment now. Though, some of the Smith’s doctrine still applies, for the most part it has become irrelevant.
The free market system described by Adam Smith has been dismantled by big governments, big unions, oligopolies, collusions of big industries, monopolies, big bureaucracies and last but not least a very complex and extremely highly sophisticated industries. Those who oppose any government intervention are naïve who live in the past and ignore the facts. They are completely out of touch with real world and the drastic changes that occurred in the last century. Governments are everywhere. From maintaining infrastructure, to owning all types of utility facilities, to health care, to education, to social assistance and so on. They even have the power to pick winners and losers. They can do that through forgivable loans, investment loans, export loans, innovation loans, research loans… and the list goes on. The auto industry and the aviation industry are the top beneficiary of this policy. It is a fact that without government assistance the auto industry in North America would have folded. Governments were able to evolve into this colossal beast the minute they acquired the power to collect taxes and to abandon gold as a standard for currency.Two developments that did not exist at the time most theories about the free market system were published.
This is not the whole story. We are buried in such a deep hole that is going to take a lot more than any effort anticipated by any economist or politician to be rescued. When you are running deficits in the trillions of dollars, and when you have accumulated tens of trillions of dollars in sovereign debt, you are going to need at least the same amount of investment if not more to have a chance at paying them off. These figures only include the west, they are even higher when the rest of the world is added on.
The bottom line is we must rebuild our economy in such a way where we focus on strategic economy, strategic careers and strategic jobs. This task is not the responsibility of the multinationals. This is the responsibility of your political leaders. They will not act until you force them to. Take a stand now and become an active member of this movement.
CONCLUSION PART THREE
We must remember that economists, politicians, professors, theorists, businesses, columnists, journalists and all types of experts and analysts have always been around. They have not been able to prevent depressions or recessions from crippling our economy before. History shows that they have failed us before and they will fail us again. We are the ones with the right plans aimed at revitalizing the economy and reviving the middle-class while at the same time saving the western civilization from collapsing.