Globalization is killing the Globe: Return to Local Economies.
Globalization is killing Europe, just as it's already wiped out much of the American middle class.
Spain and Greece are facing immediate crises that many other European nations see on the near horizon: aging boomer workers are retiring with healthy benefit packages, but the younger workers who are paying for those benefits aren't making anything close to the income (or, therefore, paying the taxes) that their parents did.
Globalists/corporatists/conservative "free market" and "flat earth" advocates say this is a great opportunity to cut benefits for the old folks (and for the young folks in the future), thus bringing the countries budgets back into balance, and this story is the main corporate media storyline.
But it overlooks the real issue (and the real solution): how globalization is killing these nations' economies and what can be done about it.
From the days of Adam Smith, classical economics pointed out that manufacturing and extraction are the only two ways to "create wealth."
"Wealth" is different from "income." Wealth is value, which endures at least for some time. Income is simply compensation for work. If you wash my car for $10 and I mow your lawn for $10, we have a GDP of $20 and it looks like we both have income and economic activity. But no wealth has been created, just income.
On the other hand, if I build your car, I'm creating something of value. And if you turn my lawn into a small farm that produces food we can all eat, you're creating something of value. Not only do we have an "economy" with a "GDP," we also have created wealth.
A stick on the ground has no commercial value, but if you add labor to it by carving it into an axe handle - a thing of commercial value - you have "created wealth." Similarly, metals in the ground have no commercial value, but when you add labor to them by extracting, refining, and forming them into products, you "create wealth." Even turning seeds and dirt and cows into hamburgers is a form of manufacturing and creates wealth.
This is the "Wealth of Nations" that titled Adam Smith's famous 1776 book.
On the other hand, when a trader at Goldman Sachs makes a "profit" trading stocks, bonds, or currencies, no wealth whatsoever is created. In fact, to the extent that that trader takes millions in commissions, pay, and bonuses, he's actually depleting the wealth of the nation (particularly to the extent that he moves his money offshore to save or invest, as many do).
To use the United States as an example, in the late 1940s and early 1950s manufacturing accounted for a high of 28 percent of our total gross domestic product (and much of the rest of the economy like agriculture that, in a classical sense is "manufacturing" wasn't even included in those numbers), and when Reagan came into office it was at a strong 20 percent. Today it's about ten percent of our GDP.
What this means is that we're creating less wealth here, because we're not making much anymore. (And the biggest growth in American manufacturing has been in the military sector, where goods are made that are then destroyed when they explode over foreign cities, causing even more of our wealth to vanish.)
The main effect of the globalism fad of the past 30 years - lowering the protective barriers to trade that countries for centuries have used to make sure their own local economies are self-sufficient - has been to ship manufacturing (the creation of wealth) from developed nations to developing nations.
Transnational corporations love this, because in countries with lower labor costs and few environmental and safety regulations, it's more profitable to manufacture products. They then sell those products in the "mature" countries - the places that used to manufacture - and people burn through the wealth they'd accumulated in the earlier manufacturing days (home equity, principally, along with savings and lines of credit) to buy these foreign-manufactured goods.
At first, it looks like a good deal to consumers in developed nations. Goods are cheaper! But over a decade or two or three, as the creation of real wealth is reduced and the residue of the old wealth is spent, the developed nations become progressively poorer and poorer. At the same time, the "developing" nations become wealthier - because those are the places that are producing real wealth.
Which brings us to Spain and Greece - and the problem of all developed nations including the USA. So long as globalism continues apace, the transnational corporations and their CEOs will continue to become fabulously wealthy. But, more importantly, they also acquire the political power that comes with that control of economies.
So they tell us that instead of putting back into place tariffs, domestic content laws, and other "protectionist" policies that built America from the time the were first proposed by Alexander Hamilton in 1791 (and largely adopted by Congress in 1793) until they were dismantled by Reagan/Bush/Clinton/Bush, we should instead simple "accept the reality" that we're "living beyond our means" and we have to "cut back our wages and social programs."
In other words, they get richer, our nations become poorer, and national sovereignty is reduced.
Nations - and in large countries like the USA, even states - must again rebuild their manufacturing base and become locally self-sufficient, so their own consumers are buying products manufactured by their own workers.
"But won't that make Wal-Mart's stuff more expensive?" whine the flat-earthers.
Yes, it will. But most Americans (and Greeks and Spaniards) would gladly pay 10 percent more for the goods in their stores if their paychecks were 20 percent higher. And manufacturing paychecks have always been higher, because manufacturing is where "true wealth" is generated (thus the basis for most union movements, which further guarantee healthy worker income and benefits).
The transnational corporations benefiting from globalization are also, in most cases, the transnational corporations that own our media, so even the word globalization is rarely heard in reports on economic crises around the world.
But globalization is the villain here, and one that needs to be taken in hand and brought under control quickly if we don't want to see virtually the nations of the world end up subservient to corporate control, a new form of an ancient economic system known as feudalism.
By Thom Hartmann.
Thom Hartmann is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program on the Air America Radio Network, live noon-3 PM ET. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People," "What Would Jefferson Do?," "Screwed: The Undeclared War Against the Middle Class," and "Cracking The Code: How to Win Hearts, Change Minds, and Restore America's Original Vision."
Source: http://www.opednews.com/articles/Globalization-Is-Killing-T-by-Thom-Hart...
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Rudy – Cuban Gynecologist and American Autosalesman – is the latest YouTube sensation, whose unbelievably cheesy local ad for T.D.M. Auto Sales out of High Point, NC hit national fame when it was featured on Leno as a "Bad Ad."
Better watch it, as it’s badness transcends writing – Rudy’s fragmented English, his desire to "FREEDOMIZE" the used cars from the lot, and the overall poor production values look truly homemade, as if Rudy rented a VHS-camera from 1985 and had about an hour to film his commercial, to be aired at 3:35am on community access.
And this badness is precisely what makes Rudy’s ad so popular – it stands in stark contrast to the highly polished, focus group tested, marketing psychologist designed ads for multinational corporations we’re now inundated with. Rudy’s ad is so popular because it is profoundly nostalgic, harkening to a time when poor production values and cheesy slogans were the norm, a time when local businesses advertised – when local businesses actually existed at all.
Rudy’s awful ad, in short, is so popular because it is totally "Main Street" – it’s independent, it’s local, and wholly innocent of the flagrant corporate greed that has given rise to the manic populism on the left and right. Joe the Plumbers, Palinistas and Bay Area Organic Farm Box Foodies can unite around Rudy, the Main Street everyman fighting to liberate local business against the evil multinational corporate regime!
As the teens begin, Rudy stands for the movement towards Main Street, towards local economies, local community, and local values. In the face of raging distrust of corporations and the federal government, localism is no longer provincial, it’s no longer cheesy, but cool. If the 2000s were about globalizing, 2010 appears it will be the year of going "local," about returning to the comforting shelter of the times by gone that probably never existed in the first place. It’s going to be Rudy’s year – and perhaps decade.
Here’s the problem, though. Is Rudy’s ad actually local? And by extension, what does it really mean to "go local"?
Rudy’s ad wasn’t designed by Rudy, but outsourced to two self-proclaimed "Internetainers", Rhett and Link, who look as if they stepped straight out of a Mac ad on their highly polished website.
The duo – who have had a TV show, and have made web videos for Taco Bell, Hummer, Cadillac, and other major, multinational corporations – appear to have a knack for getting millions of hits on YouTube, and to "entertain first, advertise second". In other words, Rhett and Link are professional marketing humorists, who produce funny content which also happens to really advertise products.
So what would these guerrilla marketers for major corporations want with Rudy?
While the "Internetainers" are from North Carolina – like Rudy – the ad isn’t authentically local, by their own proud admission. Rather, Rudy’s ad is part of a larger – and very successful, in terms of number of hits – ad campaign sponsored not by Rudy, but by Microbilt Corportation, who wanted a series of "intentionally ‘local’ feeling commercials (complete with bad edits and ridiculous concepts)".
In other words, the ad is a simulation of how a local ad is – it looks like one, is for an actual small business, and Rudy really is a Cuban Gynecologist turned car dealer. Yet, unlike a "real" local ad, this one is intentionally raw and unrefined by design, like a pair of $80 ripped jeans from the Gap. Further, the ad appears not just for Rudy’s potential customers, but is designed for a national audience, to promote Microbilt – a national corporation which makes its business supporting small and medium size businesses.
And while Microbilt may encourage local business, its ad campaign vividly illustrates a real danger of the new "local" zeitgeist: "Local" is not a reality, but a feel, a style, not a substance.
Local is an image, a myth, rather than a way of living.
The question Rudy’s ad raises: What is local? What would it look like to return to Main Street, not just as a feel, as an act of mythic nostalgia, but as a living reality?
Take for example the T-Shirt of an independently owned coffee shop in Oakland, CA, for "Oaklandish," a "locally grown" clothing brand you can buy only at independently owned non-chain gift shops or at a special van parked at the Farmer’s market. The brand emerged, according to the creator, out of a sense of "nostalgia," in an effort to capture the unique nature of living in Oakland – "these oak trees; the climate; this Mediterranean city; the mellow vibe."
And Oaklandish, true to this sentiment, is Oakland owned, the designs developed by local artists, and all the T-Shirts printed locally, by hand. The designs are also very specific to the area and the culture: Beyond image, the company "systematically contributes to other organizations who are doing positive work in Oakland," and has won awards for this service to the community, including one from the City of Oakland in 2002 for Cultural Funding.
Oaklandish is an image and unlike Rudy, a reality. Oaklandish appears the prototype of a fundamentally local organization, based in Oakland, and dedicated to Oakland. They appear to be the antithesis of the Big Boxing of America, which has steamrolled the unique spirit of individual communities, in favor of one big, homogenized strip mall.
Yet, the t-shirt – designed, hand-printed, and sold in Oakland –was "assembled in Honduras" of US fibers, just like many of the shirts one might find in one of those Big Boxes.
Is this local?
And is it even possible, in our now global market place, to run a truly local company – with the means of production and distribution all in one locale?
Is going local a modern myth?
"I don’t think it’s possible to run a totally local apparel company," Oaklandish CEO Angela Tsay wrote in an email. "The cotton would need to be grown here, the fabric dyed here (would the dyes have to be made locally?), and so on."
She brings up a valid observation: How much of a company needs be local for it to be officially "local"? Does Oaklandish need to gather cotton from Oakland? Does Oakland even have a climate that could grow cotton? Where would they grow it – by the ball park? (I don’t think the Raider Nation would be happy with this). Is this even possible – let alone profitable – to be a 100% local business?
Despite practical constraints, Tsay says that "we do think local procurement and production whenever possible," pointing out that they use local seamstresses for some work, and use garments, when economically viable, from San Francisco and Los Angeles.
Tsay would like more production in Oakland, but doesn’t "think there is any local plant that could do this right now." Oaklandish has a "pipedream" of opening its own Oakland-based garment factory, but that too, is "years down the road."
While Oaklandish wants to go more local, and keep more of the means of production in Oakland, Tsay isn’t "sure that the market will bear it." My shirt, she explains, is one of the more "straightforward" garments, and thus, they use assemblers in Honduras and Mexico to sell them at a "lower pricepoint." (The shirts are already $28 bucks). Much higher, and people will stop buying, as was the case when they tried to sell organic shirts, and "people wouldn’t pay the extra couple dollars."
Much higher, in other words, and this local business – like all businesses – isn’t going to be able to stay in business, especially in an economy where people feel pinched. Tsay, CEO of a company which promotes "Local Love," seems uncertain that her customers will pay more for a more local product: "We’ll see if people will really put their money where their localvore mouths are."
And while being a fundamentalist localvore – who will only buy products produced and sold in a 10 mile radius – may be impossible, perhaps that’s not the point. Going local isn’t just about where your products are from, and who made them – it’s not just another consumer choice.
Rather, going local is fundamentally about nostalgia, about regaining a sense of community lost, the human connection we no longer feel – or maybe never felt – as we live, work, and shop in an increasingly anonymous, isolated society.
Going local is about building community, about building a more personal, humane culture. Let’s hope this can be a reality.
By Adam Bessie.
Source: http://dailycensored.com/2010/02/06/myths-of-main-street-what-does-it-re...