Good Morning all of you free thinkers out there; your King of Simple News is on the air.

Continuing with my Show-Stopper series this morning, I’m reminded that most people seem to have a mental block when it comes to considering just where employment materializes from. The average person doesn’t believe that it’s possible for the labor force to grow larger than the job base in the United States. But then, the King of Simple readers aren’t the average people because the average person doesn’t read!

Since writing this Show-Stopper series, I now believe that employment is in fact the element that will effectively bring down the tent.

EMPLOYMENT:

The basis for the United States economy and also the source of the underlying tax collection is stable employment. In the back to back years of 1994 and 1995, President William Jefferson Clinton signed first the North American Free Trade Agreement (NAFTA), and then the World Trade Organization Agreement (WTO) into law. The promise was world prosperity; the reality was the guaranteed loss of the most important Middle Class jobs in America and the eventual loss of Middle America itself. In keeping party line politics at bay here, it is important to realize that both Bush Presidencies supported NAFTA and the WTO.

The suggested method for arriving at global prosperity was for the U.S. to shift from an agricultural and manufacturing basis to that of a “service economy.” Unfortunately for Middle America, there is no such thing as a service economy. Rather than reap the suggestive status of lounging around the pool drinking banana daiquiri’s, Middle America has now found themselves, cleaning the pool and serving the drinks.

It is important to realize that jobs are not simply created out of thin air to match our growing population and the increasing need for tax collection. “Real jobs materialize by filling real needs; not from the social whims of mortal man aimed at producing unlimited growth.” ― Mike Folkerth

“Most employment now is merely pushing paper around. The actual work needed to keep a stable society running is a very small fraction of available manpower.” ― Dr. M. King Hubbert, American Geophysicist, October 5, 1903 – October 11, 1989

Acting contrary to sound economics, the entry into NAFTA and the WTO sought to “level the global playing field.” The entire proposal of competing with nations whose workers average incomes are 60 times less than those of their American counterparts was delusional. The scheme amounted to nothing more than greater profits for American Corporations and provided a legal exit for our elite to escape the fate of our failed growth economy. Middle America had plainly outgrown their usefulness in a developing and mobile global economy.

Unfortunately, the jobs were gone long before the reality of the situation was realized. A false tech boom that collapsed in 2000, followed by a phony housing bubble that folded in 2007, masked the true consequences of globalization for the period of time necessary to accomplish the wholesale destruction of base Middle Class employment.

At the same time, export nations with near slave labor, few labor laws, little to no environmental controls, and top down governments; benefited immensely. To such a degree in fact, that Communist China has now become our primary lender.

Had it been suggested not so long ago that Communist China would be loaning the most powerful nation on earth the money to continue to tread water, the proposal would have been laughable. We now understand that there is nothing funny about it.

China, India, South Korea, and other low cost export nations have benefited tremendously from both the American job losses and greatest U.S. trade deficits in our history. Interestingly enough, Japan and South Korea are fast becoming the new victims of a world where cheap labor is king.

At the same time that America is losing jobs by the millions, we are simultaneously incurring the greatest amount of debt creation in the history of this nation. To repay that debt will require increases in tax collection beyond anything ever experienced in our nation’s history.  

To increase tax collection to this new level would necessarily require job creation at a pace that will not only put the millions of currently unemployed and underemployed back to work at higher wages, but at the same time, it would also be essential to experience additional job growth at hyper levels. Remember, “Real jobs materialize by filling real needs; not from the social whims of mortal man aimed at producing unlimited growth.”  

Bear in mind, we couldn’t pay our previous debts while at full employment. We are now simply and shamelessly supporting our prosperity by borrowing against our children’s futures.

 “All attempts to reduce the deficit, balance the budget, or pay off the national debt are futile. The deficit and the national debt represent the subsidy the government has paid in its attempt to keep growth and unemployment at the level of social tolerance” ― Robert L. Hickerson, March 1, 1995

Another sobering reality that has materialized from our so called “service and information economy,” is the very real and easily verifiable fact that nearly 50% of Americans today no longer have sufficient income to be required to pay income taxes. This means that we certainly can’t count on that half of the folks to help us out with the tax collection problem stated above.

It also means that fully half of Americans have little or no disposable income (income left over after paying for the essentials) to spend into the greater economy. This group of non-taxpaying people continues to grow in numbers by leaps and bounds. We have reached the sad statistic, where through transfer of wealth, the lower 60% of the population now own only 4% of total American wealth. The bottom 40% own less than 1% of the wealth! Wealth disparities of this magnitude are absolutely unsustainable in a free market economy.

The only three sectors of our economy that have grown over the past few years are education, medical care, and government. Note the commonality of these three growth sectors; all are tax based.

The president’s new economic plan calls for unprecedented growth in all three of the above mentioned sectors, which would then necessarily anticipate unprecedented tax collection to support that growth.

Add to this the reality that the combination of legal and illegal immigration adds a conservative 1.6 Million new job seekers to our already jobless society each and every year. These newcomers then compete against the current millions who are unemployed and underemployed. The dog is now in full pursuit of his tail.

There is yet another issue that will continue to affect employment in the United States, that of technical innovation. The combination of continual labor reducing technology, coupled with tariff free world trade, has thrust the United States well beyond the potential for maximum viable employment.

It is my stated opinion that the U.S. will never again realize full employment while at the same time attempting to pursue the false economic promise of globalization. This possibility is further challenged by the constraints of a so called “service and information economy” that constantly experiences elevated job competition through liberal immigration policies and a surplus global workforce. You can write that on the wall.

So the question for this section, while considering the above facts, is, “From where will the real job growth materialize that could possibly drive our economy and job base to the necessary hyper levels?”

“The promise of competing in the global economy is a hoax perpetrated upon the working and unemployed people of this country because over time a nation needs to buy and sell overseas in roughly equivalent amounts. Increasingly desperate means will be used by those who think we can continue to have business as usual.” Robert L. Hickerson ― in a paper published March 1, 1995