Hiring for a Constancy of Purpose
Since it doesn’t look like my beloved Wichita Eagle is going to publish my editorial along these lines, I take to the neo-pamphleteering that is the Internet.
Few media commentators have even hinted at the fact that our recent economic troubles are the result of 30 years of decision-making at the corporate level. We didn’t really get into this mess because of the corrupt bankers on Wall Street; rather, their bad behavior was dangerous precisely because the “fundamentals” of our economy are, contrary to what this president and his predecessor have said, pretty seriously messed up.
The bad blood between management and labor is over a century old, of course, but suffice it to say that corruption in organized labor in the ’60s and ’70s made workers pretty ripe for managerial revenge. This took the form not just of anti-labor legislation under Reagan, but of what we used to call outsourcing, an idea that now goes under the more gussied-up moniker of globalization. It was like the weather, they said, an inevitability, they said: they being market analysts and investment bankers, CEOs and centrist and right-wing politicians, in other words, exactly those people who were likely to see a bump in the prices of their stocks and the near-term profitability of their companies if they got rid of their single biggest expense: the workforce.
And so it went. American companies dismantled their factories, shipped jobs off to Mexico first, then to China. The investment-class, bankers, and corporate types engorged themselves on the imagined wealth of very really rising stock values. But the market is a story we tell ourselves about value; GE was worth more when it fired workers in the US because the analysts said so, and the analysts believed it to be so because they were paid to believe. They acted as our shamans and we worshiped at their Manolo Blahniks, content in the certainty that we would soon enter a Golden Age of the high-tech “information society” where we’d all be “information” workers.
Sadly, as the Internet geared up, we found that it made information rather cheap, and so information work wasn’t really going to pay off all that well. But at least we could enter the “service” sector, which did turn out to be high-tech after all: we could sell Chinese-made high-tech goods at Best Buy. Part time. At a fraction of what we used to get paid for unionized factory work.
Fortunately, Alan Greenspan was around. Nobody understood what he said (think high priest instead of shaman), but he kept credit cheap and that’s what counted. We might not be able to pay it off in a reasonable lifetime, but we sure could rack up the debt, buying all those Chinese-made high-tech wondertools we love so well. Thus our manufacturing economy was turned, over the course of a few short decades, into one that relied for 70% of its value on consumer spending.
Are we Americans idiots with our money? Sure. But at least when we had real jobs paying genuine wages we could afford to be idiots. The supposed “best and brightest” on Wall Street turned out not to be much smarter than Average Joe: they figured out that with easy credit and all the money that was diverted from defined benefits programs into 410ks, they could leverage huge amounts of money for very risky investments that promised massive returns. And the rest is recent enough history that I need not repeat it here.
The problem isn’t that these people gambled away all our cash. The problem is that we have nothing with which to replace it but more gambling. We have long since sold all the tools we used to have to actually make things. We are like a carpenter who sold his plane and chisel and saw and blew the proceeds on a trip to the casino. If you are wondering why the “recovery” has been jobless, just think of this man. The Wall Street bailout began by Bush and continued by Obama has simply been like a rich uncle borrowing money from the mob (in this case our biggest creditor, the Chinese) to give to our gambling-addicted carpenter so he can head back to the craps table.
Gutting America’s manufacturing base wasn’t the weather; it was the result of conscious decisions on the part of some very wealthy and powerful people. It was stupid because the American worker and the American consumer are the same person. The rich got their revenge on labor. But they also their comeuppance and had to be rescued.
We need not bring back organized labor to solve this problem. If unions disturb you, then forget about them. There’s a much simpler solution, and none other than Henry Ford understood the fundamentals of it. Ford was no friend of labor, but he did realize that if you want a customer base for your new product–the Model T, in his case—the best way to get one was to build one. So he paid his workers $5 a day, enough to able to afford a Model T on the installment plan.
We need to do something similar but on a national scale. I propose a relatively simple piece of legislation: make it law that if you want to sell a product in the United States you must employ a number of Americans proportionate to your sales. They wouldn’t have to be manufacturing workers; they could be designers or engineers, salespeople or repairmen, but they must be Americans. This law would pertain to both US and foreign companies. No one doing substantial business here would be off the hook: if you want to sell here, you must hire here, period.
Obviously, very small and boutique producers would be exceptions. A guy building custom kayaks in his garage in Finland need not hire any Americans if he wants to sell a few here. But then, he’ll be no threat to the Coleman company’s canoe business.
Naturally, fiscal conservatives will howl that this is a protectionist measure, government interference in the natural workings of the market, a dangerous manipulation, and so and so forth. But then, wasn’t all the union-busting of the ’80s at the behest of the corporate classes government interference? Wasn’t the creation of a massive and risky market in derivatives a manipulation? Wasn’t all that packaging of “globalization” and the “information society” to a desperate workforce manipulation? Isn’t even the idea that the investors are “job creators” when they are busy outsourcing and downsizing and laying off also a manipulation?
More to the point, the free-market fundamentalists have had thirty years to prove their case, that letting them run the economy will lead to unprecedented wealth for all Americans. They have failed to make that argument work in the real world.
Is it protectionist? That I freely allow. But it is no more protectionist than what the Chinese do when they insist that they won’t buy Boeing’s 787 unless a certain portion of the plane is made in China. Since it has become fashionable to hold the Chinese up as paragons of the virtues of globalization, let’s at least be on par with them in terms of protecting what we worked so hard after World War Two to achieve.
A more damning counter-argument is that my proposal would push American companies offshore permanently, that they would just set up shop in Dubai or Hong Kong for good. If they are really that disloyal, let them go. Halliburton, Dick Cheney’s former company, already has. Arguably, the real money to be made isn’t in the US anymore but in emerging economies like China and India. Perhaps so. But those economies still rely on ours as the place to sell all the junk we used to make. The Chinese hold so much of our debt not just because they want a certain amount of geopolitical leverage with us but also to shore up their own most lucrative market.
Besides, the parsimony that follows centuries of hardship isn’t going to be wiped out overnight. Asians are savers in ways we haven’t been since the wake of The Great Depression. The Chinese and other Asian people are also infused with Confucian values that honor prudence and fiscal restraint. Even tried-and-true Madison Avenue tactics won’t make these emerging market buyers go into debt to buy the latest consumer goods the way Americans already do. By making companies that sell here hire here, we would, like Ford, effectively be underwriting a line of credit to the American people, one we work and produce for and that’s based on something real, not one floated on a credit card application and a prayer to High Priest Greenspan.
But it would have an ancillary effect: low-risk investors and banks could reserve some of their money for businesses that would have a solid customer base and that actually made things. They would not feel forced into derivatives and collateralized debt obligations in order to keep up with the market or hedge against its uncertainties. And then perhaps those of us who actually save our money might be rewarded for it instead of being punished with interest rates below the rate of inflation.
Rather than being a radical law, this one would create a foundation for those values that conservatives claim to hold dear: hard work, personal initiative, prudence, patriotism. These values are only meaningful if they are allowed to flourish, if we can create a system in which they are rewarded rather than punished, in which they are not ridiculed as the follies of the overly-cautious but as the best practices of the economically wise.
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