Electro-Robot (Screaming Hammers of Hate) must work in white collar work. The problem with basing an economy on paper shuffling is that 'value' is not created in the same way. The finance sector of capital outweighed the productive economy until recently. As you can see, financial 'value' can be destroyed overnight ... while it would take years to burn and destroy every car plant in the U.S. (Of course, this is what the ruling class tried to do...) The other side of the financial economy is that it survives on debt. Our whole economy is the largest debtor in the world. Debt does not create anything of value, except monetary values for the bankers. It just results in debt service.

Creating actual products that have use-value is a reliable source of jobs and goods. Given global climate change and peak oil, assigning manufacturing to 'poor' countries will become more and more cost inefficient. It is also a large source of unregulated pollution. This 'reverse' globalization has already started. The weakness of the dollar, in addition, has propelled 'exporting' to a new role. Of course, to export, you need something to 'export.'

Of all our intellectual products, software is the one that enables the productive economy the most. However, Disney films, Game Boys and the Jonas Brothers are not products that will survive tough times - as they are entertainment. Just as people will not be running out to restaurants or signing up for yoga like they did. Our overblown service sector was always based on excess fumes from the cash in the financial sector.

You can live in a modern version of the Roman Empire, that only 'consumes' and 'overconsumes' what the rest of the world produces, or you can base the U.S. again on making things that citizens can actually use. Manufacturing, agriculture and having real products are the stable source of wealth - not banking.

If they were willing to invade Iraq, why were they not willing to pass legislation to undo all of the terrible things the Dems singlehandedly did? Why did we not even hear a peep about this from them? Right up until the shit storm started, Republicans were telling us the fundamentals were fine. Are they complicit too OR completely ignorant?

Excellent post. I tend to think most of the deep-seated stuff began in the 70's when management side-stepped the unions by moving jobs south or overseas, and the power brokers, not to say a good portion of the gullible American pubic, put their eggs all in the consumer's basket over the worker's (not to mention management's over the union's). Thus, it became more important that someone could buy a $20 piece of crap electronics device at Wal-Mart than that same someone was making a decent wage at the same store. It's also interesting to note that this "cheap labor" principle as applied in the recent IT outsourcing boom has already begun to bite the American economy in its ass. It's not for nothing that countries like China and India are now consuming oil, and thus driving up gas prices, at the rate of Americans, nor the fact that China has become an economic superpower.

But other than pushing for worker's rights abroad and applying some sort of tarriff/protectionism policies, what can be done? The cruelly funny thing is that management won the war against the unions by portraying guys like Jimmy Hoffa and his mob buddies as guys high on the take. That they were, and some of them even had rackateering charges to prove it (not to mention violent pasts), but I believe history has shown that those atop the unions were absolute pikers in the graft department compared to our current crop of speculators, traders, CEOs, politicans and lobbyists.

Anyway, kudos to Mr. Leonard for writing an article that wasn't more of the same People magazine-like obsession with Sarah Palin. Let's keep our eyes on the ball, folks.

Pope Benedict XVI today said that the global credit crisis shows that the world's financial systems are "built on sand" and that only the works of God have "solid reality".

Well, that's certainly some useful, practical economic advice, huh?

http://www.timesonline.co.uk/tol/comment/faith/article4893190.ece

The problem is the stupidity of the american people and that includes all age groups.

Saying we don't make enough steel or tv sets is gibberish. those things are made in low cost countries ALL low cost countries. They don't make tvs or steel in Belgium either. the idea that we should return to an economy that builds locomotives is stupid in the extreme. fact is fact. we are a service and financial and intellectual property economy. that is the problem that needs addressing not some idiot faux Marxist babble that we need to hand out overalls and pipewrenches.

and anyone connected with this fiasco should be turned over to the american public ......... they don't have to get their hands dirty .......... we'll deal with them.

Well, Marx postulated the declining profit as a mathematical equation. It hasn't been taught in universities despite the so call leftist slant of the faculties. For a while it seem the law has been repealed, I guess the globalization and degradation of environment has masked it, but now it has come back with a vengenance. A house of cards in the big casino.

"Our problem is not that we've allowed our economy to devolve into little more than a sophisticated form of three card monte; it's that the underlying fundamentals of our economy, thanks to globalization and free market fundamentalism, created a situation in which said transformation of our economy was a NECESSITY for the US to maintain even a semblance of prosperity. We've been running on fumes for decades now, to put it mildly."

Net new wealth comes into the American economy only when we (a) extract new resources from the ground or (b) make breakthroughs in technology. All other economic activity is so much zero-sum shuffling of existing assets among pockets. Though plan (a) sufficed when the nation was young and still exploring its physical resources, most new wealth in a mature economy depends on plan (b).

If there are going to be jobs and new wealth once again, both parties need to get over their qualms about technology to allow the country to innovate again. God will not punish us for using stem cells, and neither will Gaia be offended if we engineer her species' DNA.