Where Have All Our JOBS Gone?

In the days of the hippies and the Vietnam war protests there was a song frequently sung by the protesters called "Where Have All the Flowers Gone?" It was a hit for the group "The Kingston Trio" and was based on a Russian poem called "And Quietly Flows the Don." The gist of both the song and the poem were that all things have both a cause and an effect and are cyclical in nature. In the song, the first question posed was "Where have all the flowers gone?" Answer: "Young girls picked them everyone." The next question was "where have all the young girls gone?" Answer" Gone to young men, everyone" followed by men to soldiers, soldiers to graveyards, and graveyards to flowers illustrating both the futility of war and the cyclical nature of all things using the flower as a metaphor for life. Makes sense, doesn't it? However, when the same question is posed about American jobs, too often the political ideology kicks in and the blame game begins. If you're a conservative, you blame the UNIONS. If you're a liberal or marxist, you blame big business and Wall Street. In either case, you'd be both wrong and RIGHT. To blame either faction as the sole cause of the eradication of the manufacturing sector of our economy would be an oversimplification and misinterpretation of the events that transpired to bring it about. In the period following the end of World War II to about the mid 1970's, roughly two thirds of the finished manufactured goods sold all over the world were made in the United States. During this period, we had relatively non-existent unemployment because anyone willing to WORK could find a job. Not only could one FIND a job with relatively little education or experience but one could support himself and his family in a respectable manner on what he earned from working at such a job. It was also possible to work that same job for twenty years or so and retire from it with a gold watch and a pension that, together with accumulated social security benefits, would allow one to live a relatively secure and comfortable retirement. To understand how we went from being the world's largest producer of finished goods to one of the world's largest consumers, you have to look at organized labor, progressive politicians, and the wolves of wall street. 'm not writing this solely for the purpose of bashing labor unions. Unions have done a lot of good things for the American worker. Without Unions, there would be no 40 hour work week, sick days, maternity leave, worker's comp, child labor laws, and a variety of other laws we take for granted in the modern workplace. At their inception, Unions were comprised of men who WORKED in the industry whose workers they represented. They were true peers of their fellow union bretheren, and as such, represented their interests with diligence and empathy. By the late 1950s however, unions had been corrputed by both organized crime, and management that had no relationship to or understanding of its' members as they had been hired directly out of college without having EVER done a hard day's work in their lives. In the 1940s, the unions had been infiltrated by organized crime families who used their dues pools and retirement pension funds to build casinos in Havana and Las Vegas. In the election of 1960, Kennedy family patriarch Joseph P. Kennedy used this relationship to secure the election of his son, John F. Kennedy, to the presidency. From that time on, Union leaders saw the power and profit potential inherent in politics and became more concerned with their personal and political ambitions than the welfare of their members. Unions used their newfound legislative clout to get laws passed the strengthened their position in collective bargaining and to extort higher wages and greater benefits including "cadillac" health care benefits and stock options for their workers. This went on for a time until the cheaper imported manufactured goods began entering the country and finding their way onto store shelves. Free market forces put the American manufacturers in an untenable position between a rock and a hard place and they realized they could not continue in business if they couldn't be competitive in pricing their products. However, due to their high labor costs and union contracts, they could do nothing to bring down their manufacturing costs so they were hemorrhaging market share to the cheaper imports. This resulted in declining sales, declining profits, and declining share values. More than one manufacturer was run out of business altogether, but some found a way to shake the union yoke once and for all and still remain profitable and this is when the "Wolves" of Wall Street started to howl. In the Reagan era the 1980s, wall streeters coined a new term America's financial lexicon. This term was "maximizing shareholder value." It was this concept that gave rise to the corporate raider portrayed to perfection by Michael Douglas in the character of Gordon Gekko from Oliver Stone's classic movie "Wall Street." What the corporate raider did was seek out companies that had been declining in profits and share prices, but still had sufficient cash and assets to make the acquisition worthwhile. Raiders however had no intention of running the business once they bought it. Their purpose was to dismantle these corporations and sell off their assets because the companies were more valuable for their parts than for the corporation as a whole and functioning business. They would "maximize the shareholder value by buying the shares at or above market price thereby removing the shareholders from the business model. They would then either work with the existing board of directors to liquidate the assets of the corporation like its real property, inventory, fixtures and equipment or replace them with a slate of officers chosen by the liquidator specifically for this purpose. Employees would be immediately terminated because the board only has a fiduciary duty to shareholders not to employees, and the equipment would be sold off, normally to an overseas concern. The dirty little secret to this whole process is that before the takeover, the boards of directors would organize another company overseas in a country that was more hospitable to business and when the equipment and fixtures was sold, it would be that company, secretly owned and operated by the same board of directors, that would purchase the equipment and fixtures. The company would then set up a new company to import and sell to retail the products now manufactured overseas, and it's profit would come from the wholesale to retail sales model now in place. By this slight-of-hand, the corporations effectively reorganized, removed the union and the high labor and operating costs they would have paid in this country, and with a more streamlined business model in place, could realize greater profits than were realized prior to the "liquidation." New company name and no manufacturing jobs means no more UNION obligations. This process was repeated throughout the 1980s and 90s until the manufacturing sector of the American economy was all but EXTINCT, and it's not limited to manufacturing either. Try calling customer service for your credit card to airline today and you'll probably be talking to someone in New Dehli, India. Apparently it's cheaper to pay the long distance charges and the Indian wage than it is to pay Union scale wages and benefits in the customer service industry. The loss of the jobs was not the goal of either the unions or the progressives in government. The INTENT of the unions was to use government power that they bought and paid for to effectively steal the corporations and their profits from their rightful owners, the shareholders, as we saw in the rape of GM and Chrysler by both the UAW and the US Government acting in concert. The LOSS of the manufacturing jobs and resulting boom-bubble-BUST economic cycles was an "unintended consequence" of the progressive political and social agenda. Seems, however, that most, if not ALL of those progressive political and social agendas are fraught with the damages from the "unintended consequences" on progressives who don't think past the end of their upturned noses when implementing their ideologically driven, but poorly reasoned, agendas. At the beginning of this piece I referenced the song "Where have all the flowers gone/" I chose that song not only to illustrate the cyclical nature of events, but because it has a most appropriate tag line for our current economic and political situation. That line is "When will we EVER learn?"