Saturday, January 12, 2008

Let Them Eat Cake

"At first sight, the resemblances across 130 years may not seem obvious. ... This is the story of how an over-extended empire sought to cope with an external debt crisis by selling off revenue streams to foreign investors. The empire that suffered these setbacks in the 1870s was the Ottoman empire. Today it is the US. Yet we need to recognize that these 'capital injections' represent a transfer of the revenues from the US financial services industry into the hands of foreign governments. This is happening at a time when the gap between eastern and western incomes is narrowing at an unprecedented pace. ... It remains to be seen how quickly today's financial shift will be followed by a comparable geopolitical shift in favor of the new export and energy empires of the east. ... Although many people will be surprised by the figures, Americans have long complained that average incomes have been stagnant in their country", Niall Ferguson at, 1 January 2008.

"Tata Motors' emergence as front-runner to buy Jaguar and land Rover from the ailing Fod brings one question uppermost to a commentator sitting at a wealthy Western desk: Precisely which economic sectors can be relied upon in the future to provide jobs for Westerners at wages higher than are obtainable in the Third World" ... Since the majority of location-dependent jobs in Western countries are low-skill it therefore follows that if governments wish to protect local living standards, they need to discourage low-skill immigration. Except in Japan, they have not been doing so; both in the EU and the United States low-skill immigration, frequently illegal immigration, has gotten completely out of control and is immiserating the working class. ... From the summary above, it is pretty clear that income levels in the West are converging with those in the more competently run emerging markets. The bad news is that in the years ahead this is likely to happen through an absolute decline in Western living standards. ... By 2030, it is possible that the median real income in the United States and Western Europe may be no more than 50-60% of its level today", Martin Hutchinson (MH) at, 7 January 2008.

I think the average American male's earnings have fallen 35% since 1973, putting me at odds with official US statistics.

I have been saying things like MH for about 25 years. MH's position has significant implications for our educational establishment, i.e., we don't need most of it. Bertolt Brecht wrote "The Solution". It says in part, "Would it not be easier In that case for the government To dissolve the people And elect another?" It seems that's what Uncle Sam is doing.

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