Behind the Sub-Prime Mess

January 28, 2008

By Peter Amherst
Copyright Peter Amherst

The Washington politicians are running around like chickens with their heads chopped off. Their solution to the sub-prime mess is to borrow more money from places like China to give to the people, so that they can go out and buy more Chinese products. 92% of all audio/video equipment is made overseas. 92% of all non-athletic shoes are made overseas. It sounds as if the politicians are creating an economic stimulus package for these other countries.

The president assures us that the American economy is fundamentally sound. That is about as credible as his claim of weapons of mass destruction in Iraq. Can a country where the federal debt is more than 9 trillion dollars have a fundamentally sound economy? Every man, woman and child in this country owes around $30,000 on this debt.

But that is only the tip of the iceberg.

Nobody know what the real debt of America is. USA TODAY several months ago projected that the real debt was at least 51 trillion dollars, and that every household's share of that amounted to more than $500,000.

The economy of the U.S. is fundamentally sound???

Yes, and there is a Santa Claus also.

The time is long overdue for America to confront its real problems, and the picture is not pretty. America has begun the slide to third world status. Having reached the top of the mountain, there is only one way to go - and that is down. It will not happen overnight, but it is happening. Maybe it will take an iconic happening like another country buying the White House, and leasing it back to us, for this truth to hit home.

The proposed Economic Stimulus Package - or more accurately labelled as the Great Borrowing Package - is like applying a topical anaesthetic to somebody with skin cancer. It momentarily relieves the pain, but leaves the underlying cancer untreated.

What is that underlying cancer?

That is obviously a long story, but briefly it is this.

Those few who took power in America bought into a system that has bedeviled the human race from the dim mists of history. It is a system that guarantees losers. For a few fleeting moments in historical terms, the few achieve power and pre-eminence through killing, theft and cruelty. Inevitably, this spurs another group to seek to unseat them and take their place. We have seen this countless number of times with such empires as the Persian, Roman, Ottoman, British.

And now the American.

And the ones who are selling America down the drain are the ones who on July 4, hold little American flags (made in China), place their hand on their heart as they sing the national anthem - and wonder how their factories in China, Indonesia, Guatemala and countless other countries are doing.

For the first 70 years of the 20th. century, they exploited the American worker. For the last 40 years, they have been dumping the American worker because they can exploit the lower-paid workers of third world countries of Asia instead. As these workers agitate for more, the few will shift their jobs to other continents, especially Africa. By that time, American workers will be willing to work for $1 a day, and the jobs will come back here again - for awhile.

This constant turmoil creates wars, great social upheavals, great suffering. For the few who live in their mansions, that does not matter. Humans are simply the flotsam and jetsam for their greed and ambition. If they can become rich by feeding people toxic foods, so be it. Then they can make money off finding cures for their cancers, and selling them outrageously priced drugs.

Is there an answer?

Yes, there is always an answer if we have the courage to look for it, and the courage to implement it. It may not be an easy answer, but that is because we have created a difficult problem.

While there is no single panacea, there are two principles which provide the road signs for the direction to take.

The first is the equality of all human beings, black, brown, yellow, white. This equality is not some empty, high-sounding word. It means that all human beings are entitled to adequate food, housing, clothing, medical care, education, free of exploitation and oppression.

The second is profoundly related to this - equal pay for equal work. Whether a pair of shoes is made in Indonesia or Los Angeles, the worker should be paid the same.

Of course, this second principle sometimes provokes a negative reaction from some Americans. But American women have long complained that it is unjust that they are paid less than American men for comparable work. If one accepts that, it is hard to see how one can reject the former.

Some may object that the current disparity between, for example, the U.S. and Indonesia in wages, is due to a different standard of living. It costs less to live in Indonesia. Yes, but that is precisely the point. There should be no disparity in standards of living between human beings. The disparity is produced precisely by that system of old where a few seek to exalt themselves at the expense of the many. It is precisely that system which is the root cause of much of our present malaise.

The transition to a system of equality, of course, is not easy, but it can be done. There may be bumps in the road, but at least we know that we are on the right road. The other road leads to a precipitous cliff. Many nations have been down that road to their detriment. America is hurtling down that road as well. Unless we put the car into reverse, we will go over that cliff as well. We are not very far from the edge.

Do any of the current crop of presidential candidates have a true grasp of the depth and scope of America's problem?

So far, none seem to have addressed it. Do any have the potential of doing so? Certainly, none of the Republican candidates do. They all seem mired in the quagmires of the past, and if anything, seem to be part of the problem, not the solution.

The same goes with the Democratic candidates - with two possible exceptions. Hillary Clinton is not one of those. She too has been mired in the inner chambers of those who are the cause of the problem. She has tinkered at the margins, but never addressed the fundamental cancer.

John Edwards shows potential, but because he too has been so deeply involved with those who are the cause of the problem, it is unclear yet whether he can shake free of those shackles and face the global problem in all its dimensions.

Barack Obama shows more potential. While his presence in the public sphere is limited, nevertheless he shows the ability to think to the root causes of problems. His very newness maybe an important asset. He has not been sucked into the clutches of those who seek to cabin, crib and confine. He has shown a genuine independence of thought.

Whether he will meet the challenge of the future, only time will tell. But he certainly cannot do it without the support of all Americans. The current economic crisis is a moment of truth - or folly - for all Americans.If we continue blindly down the same road, we will meet a fate similar to that of the Romans, when the Germanic tribes broke through the walls of Rome, and pillaged, raped and robbed the entire city.

Not only can it happen here - but it will. The system that the few imposed on us inevitably and of necessity leads to that. We have been warned. Let us not fail to act.