Ignore the Cassandras in the Media: The Economic Future of the U.S. Looks Bright
An old joke is that pessimists see a glass that is half empty, optimists see a glass that is half full, and engineers see underutilized capacity. I am throwing in with the optimists and engineers. The chokehold of extremist neoliberal U.S. and global economics has run its course and isn’t working – in fact hasn’t worked for most Americans at any time in the past. Furthermore the cultural decadence and political proto-fascism that has been the logical conclusion of a value system of greed, narcissism, and sadism, is no longer acceptable to the broad mass of American residents.
Following a post-War Capitalist golden age, a world-wide economic dark ages commenced with conservative industrialists’ counter to the 1960s-Enlightenment movement. In reaction to perceived threats from left-wing radicalism, an economic right wing circled their political wagons as expressed in the Powell memo. Due to macroeconomic trends pertaining to oil and offshore manufacturing, labor lost the clout it had gained during the “golden age.” The power of industrial reactionaries reached a zenith with installation of Milton Friedman’s radical, irrational, economic theories as the dominant modus operandi of corporations. Public policy and the cultural zeitgeist adapted to the brutish, coarse values of fanatical neoliberalism; the working classes were thrown overboard and forgotten.
Macroeconomic trends – indeed survival of humankind – are driving the future of global economics. It has suddenly become apparent that a “just-in-time” global supply chain is so tenuous that the time has come to build manufacturing operations nearer to assembly facilities. If anyone thinks we live in a digital world, they haven’t seen anything yet. The “green revolution” will drive an exponential growth in digital devices. The impact of a disruption in chip supplies from Taiwan is forcing a return of manufacturing to the U.S. Intel Corporation is investing in plants in Ohio and Arizona. Also, that company’s massive investment in R&D (a huge expenditure on their income statement) will make it more competitive with the Taiwanese – the leader in chip manufacturing.
Along with Intel, companies such as Tesla, Qualcom, AMD, and Apple, will displace some of the older blue chips in manufacturing such as GM. Furthermore, disrupters and startups on the scene will become household names in the future (e.g., Unity Software, Rivian, Lucid).
The truth of the matter is that the current economic downturn in the U.S. and inflation hysteria aren’t due to the old Econ 101 adage of too much demand chasing too few goods. For decades, the global economic system has been beset with excess capacity, excess labor, and excess capital. The world-wide economic system has the capacity to produce so much unneeded junk that deceitful marketing can’t be made deceitful enough to make people want it enough to take up slack in manufacturing capacity.
What we are now seeing is a reallocation of resources. Like water seeks its own level, capital flows toward ROI. That will not be in throw away plastic junk for Walmart. Rather, it will be in electric vehicles, solar panels, 5-G, entertainment, metaverse, and a host of digital advancements not yet conceived. Furthermore, the U.S. population is on the verge of shrinking due to a low birth rate, shortening of life expectancy, and fascist-racist, right-wing (think Republicans) shut down of immigration. But immigration must happen, will happen, and will cause a marvelous intensification of multiculturalism. We will be reallocating labor (to the U.S.), manufacturing (to the green revolution), and capital (closer to home).
The massive CHIPs bill that was passed by Congress is an exciting step toward robust economic growth and a greener environment. If indeed Senator Manchin is on board with the climate bill as he says he is, we can say that although we haven’t turned the corner, we are approaching the corner and will turn it in the near future. As an antithesis to the old neoliberal regime, these bills are a synthesis with a lot of ugly tax benefits and other goodies for the old industrialists and Wall Street financiers. Nevertheless, in regard to the disgusting tax codes, consciousness among the people is rising and politicians are feeling the heat.
The Cultural & Values Revolution we Need
What we also must reallocate are the benefits of abundance. A powerful, corrupt, greedy, power elite has become increasingly bold at leveraging political power in directing an increasingly disproportionate share of the value produced by the economic system to themselves. However, Americans are highly tolerant of wealthy people and their machinations. Nevertheless, at the point the super-rich poke the bear too much it will react (the American bear, not the Russian bear in this context).
Broad affluence and opportunity among the bottom four SES quintiles (bottom 80%) leads to higher educated and a more democratic populous. That is exactly what the current power elite wants to avoid. That is why we have seen hyper-inflation in college tuition and the elimination of low cost and even free college (like benefitted me in the 1960s and 70s).
The wealthy elite and the dark forces of politics (i.e., the Republican Party) are underestimating Americans’ broad support for universal human rights and basic fairness. My guess is that the Trump movement includes a large proportion of individuals damaged by the destructive conditions induced by the tilted economic system. It takes a fascist con man like Donald Trump to mobilize what is actually a small proportion of Americans who are decent but confused, angry, hurting, and aggressive into a political movement with some clout. However, the horrific outcome of that is becoming increasingly obvious.