Reply #100: What it comes down to is Henry Fordism vs Reverse Henry Fordism [View All]

[LongTomH]

Professor Ernest Partridge posted this on his blog and on DU last year: Reverse Henry Fordism.

There are no sellers without buyers.

That's the first law of practical economics. Everyone knows this to be true, whether or not one has ever taken a course in Economics. Everyone except, apparently, a few Ph.D economists who seem to forget this rule when they are hired by the Heritage Foundation, the American Enterprise Institute, etc., from which they migrate, back and forth, between offices in Republican administrations and these right-wing think tanks.

For these worthies, the "first law" is replaced by the dogmas of deregulation, "trickle-down" and market fundamentalism: impoverish the masses, throw money at the rich who will then invest it, and then "the invisible hand" of the unregulated free market will bring forth a cornucopia of goods and services.

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Henry Ford saw the fallacy of such a policy when he raised the wages of his workers. His competitors in the auto industry were aghast. "Why did you do that?," they asked. Ford is said to have replied, "If I don't pay them more, who will buy my cars?"

Get this straight: Henry Ford was, in many ways, not a good man. Hell, old Henry was a cast-iron son-of-bitch. He was a racist and anti-semite who bankrolled the Nazis; but, he had that first law of economics down pat. People with money can buy things; people with less money buy less.

The corporatists and their paid whores in media, academia and the afore-mentioned think tanks have been engaged in a four decade campaign to drive down labor costs, and they've succeeded. People are afraid to ask for a raise and more willing to take a pay cut to save their jobs. More of us have lost a good-paying job and had to settle for any job, even at a fraction of what we made before. And we're being told we're lucky to have any job!

Add in the psychological factors: Even those of us hanging on to a job at a decent salary have seen our fellow workers quietly escorted out the door in headcount reductions to save company profits for the next quarter. How many people on this forum know people who've gone through two or more jobs in the last decade? How many know someone who has been unemployed six months, a year or more?

People are frightened, and frightened people are afraid to spend money. They're especially afraid to get in debt for a large purchase, say for a new car or home.

That's why I don't think car sales are going to 'come back' any time soon. Check out the article in the NY Times: Job Losses Hint at Vast Remaking of Economy. It includes statements by a an economist who predicts a permanent restructuring of the economy:

“These jobs aren’t coming back,” said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. “A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

Face facts, gang! They've screwed us - and in the process - screwed themselves. But, I don't think that last fact has settled in yet!