1.27.2008

New World Order, Or Same Old Feudalism?

From the last post, I began writing about the greater consequences of outsourcing, economic recessions, and making the same mistakes that led to the Great Depression. You're now, undoubtedly either asking yourself "So what are the possible outcomes?" or you are preparing to read this full well knowing your own opinion about it, and are willing to agree, or rip my theory to shreds. In any case, I welcome it.

So what happens if the US sinks into a massive recession to the point of Depression, and what are the great Global Ramifications?

First and foremost, I think it is understood that while our dollar is slipping below the currency surface, a recession will only exasperate the problem. The question isn't focused on what will happen to the dollar, but rather will the dollar value become so low to the extent that the unimaginable would happen?

I have two main theories, with three possible outcomes here. The first deals with outsourcing directly, and also notes the contribution outsourcing has made towards an inevitable collapse. When US companies began seriously outsourcing to countries such as India, the companies made more money, and the country they outsourced to made more money. After 2002 India's GDP rose to 8.5%, which was the influx of wealth India needed to help stabilize its economy, and begin creating a true middle class. This all sounds very good, a win-win-win situation. And so it was, and has been, in the short term. But since 2002, India has begun outsourcing - outsourcing, an innovative idea for an up and coming country. What that means however, is that the situation is no longer an actual win-win-win situation. It was only a matter of time before the inundation of US companies filled with fiscal power and prowess turned the tables and helped the economic growth of the country it outsourced to. Thus turning "cheap labor" into "not-so-cheap labor".

This has helped, in its own way, create part of the economic problems we face today. In a short six years, outsourced labor has become a hot button issue for both employees and top level employers. Top level employers, also known as CEO's with exorbitant salaries who are routinely rewarded for such business savvy moves as outsourcing, fight for outsourcing for obvious reasons. Then they try to convince us, the laid off employees with no job, and a field of expertise that has been all but completely removed from the country, that it is for our own good. The employees, or "us" oppose it for equally obvious reasons. We want our damn jobs.

That said, outsourcing has its pro's too, it does, to a small extent, keep product prices lower. Of course, it also means lower quality in many cases, and the prices need to be low, otherwise we couldn't afford it. If the companies stayed at home, paid their CEOs less, and hired more employees with what's left over from the whopping new capital gained, not only could we afford better quality products at slightly higher prices, our economy wouldn't be dying at all. (Remember the distribution matters when trying to prevent recessions and Depressions!).

What does this mean? Well, for one, it could very well mean that the US dollar will become so weak that other countries, with stronger economies will begin outsourcing here, and we will become the new "Cheap Labor". If the recession or Depression is bad enough our compensation expectations will drop with the dollar, throwing average earnings back several decades. "But, but, but...won't that mean jobs will come back to the US?" You're asking. Yes, but not the way you might think it would. Remember, India is already re-outsourcing US contracts back to the US. US companies won't abandon contracts and factories overseas just because the labor here is automatically cheaper. They will continue with their own contracts, which will be sent back to the US, for even less pay. We will be working for the very same companies we were before, based in the US, for a fraction of the salary.

The corporations will have taken our jobs and sold them back to us for twice the price and all for the sake of a greasy buck.

In which case, my first scenario encompasses the international crossing of outsourced companies, with the top earners based in their home country, and everyone else seen as the new wage slaves. Creating our very own Aristocracy 2.0, just in for the new millennium!

The second possible outcome, of course, is that our employment options become so dreary, and so bleak that the US corporations can come galloping in on their White Horse, in Shining Armour, gallantly saving the day. At a reduced wage, of course. By that point as long as the wages are better than what we've got, Americans will take it. We'll be right back where we started from, only with a weaker dollar. The reason I bring this possibility up, is because of the recent complaints about outsourcing from companies. Issues such as poor customer service ratings, below standard product quality, and hassles trying to get the products back into America, and on the shelves so the consumerist can gobble them up at a not-all-that-reduced price. Companies want back in, but they don't want to pay the going rate. Therefore, they must force the issue.

That could be the plan of the government as well, who undoubtedly is more concerned with big business, than "We the People". Or, the government could really, honestly be that blinded by the optimistic hope of America's power being so thorough it can weather any financial crisis. With Bush at the helm, any outrageous idea is possible. (Rational ideas, policies, and theories have no place in this government.)

If this is the case, and the stimulus package is the best the government has to offer, and it continues to repeat mistakes from nearly a century ago, we can count on a "World Without Money". Which will become unmistakably, assuredly, and ever so certainly desolate.

Which brings me to a conclusion tonight. Watch out for "World Without Money" coming up next...



{Note, all sources have been previously referenced in the first post, Ramifications of International Market Upheaval}

3 comments:

People Power Granny said...

You are very thorough in your analysis. Let me know if your theories become reality. I'll remember. In the meantime, would love to have you offer my site as a link on yours, if possible.

an average patriot said...

Anok
you had me curious as to what you've been working on. Been watching flies mate huh? As you said, the stimulation package will stimulate nothing and eventually the point of diminishing returns will be hit and it will not be far off. Bush has set up the perfect storm here and around the world and it will not be avoided.
This like everything else Bush has done will dwarf anything the world has ever seen. The more I learn the more concerned I get! oh yeah I just heard that while the chief idiot is telling the Senate to quickly pass the package to supposedly save us the Senate is increasingly wanting things added and becoming wary. This will be another mess!

Anok said...

I have seen flies mate actually...it's the bizzarist thing.

I will keep my eyes peeled - not for mating flies - but for all the earmarks in the package. I wonder what thats all about.

People Power granny, thanks for stopping in! If my theories become reality though, we will all be in very deep trouble. You'll know....

This is the sort of thing I'm hoping I'm wrong about.