Changing The Value System

The struggle is not against communism. The struggle is against a system that refuses to invest in a future for all of us.

Tom Cotton is on a crusade against China. Donald Trump was on a crusade against China. I’m sure we could find a few others on similar crusades against what is apparently the largest or second-largest economy in the world, without any real examination of what they are doing over there.

As far as I know, China is still a communist country. Yes, they have adopted some elements of market capitalism, but they are still a communist country. They still put bankers to death when they cheat the system. They are investigating Jack Ma’s Alibaba for monopoly practices. I note with interest that none of the China Crusaders are talking about all of the things that China has adopted from the western world. You know, like predatory capitalism.

For a communist country, China is sure making a lot of people rich. China is second only to the United States in the number of billionaires in their country. The top 1% in America owe much of their wealth to China. The Chinese rich owe much of their wealth to trade with America. But the one thing that Mr. Cotton and his cohorts are missing is this: infrastructure. China spends more on infrastructure than any other country in the world.

According to this chart in Statistica, China spent 5.25% of GDP on infrastructure in 2018. America spent 0.52% on infrastructure that same year. There are 36 other countries that spent more of their GDP on infrastructure than we did that same year. China has consistently outspent America on infrastructure for decades. What are they doing? China is building and repairing airports, roads, and bridges, laying fiber, building cities, and creating the hardware required to get the work done. Those people have work to do and they’re getting paid for it. The Chinese have a 44% savings rate.

Us? Our savings rate has been around 6%, with a bump up to 14% during the pandemic. We’re still beholden to banks that can’t stand the idea that we might use the money we borrow to build the means of production. Has Tom Cotton noticed that most of the stuff we buy on Amazon is made in some other country? He has.

According to this article on Vox, Cotton has a big plan to “beat” China. Specifically, Cotton’s plan is designed to:

”…prove that China’s Communist, authoritarian model doesn’t stack up to America’s capitalist, democratic one.”

Mr. Cotton seems to be really, really confused. Or at the very least ignorant. He fails to see authoritarianism in America. He doesn’t seem to understand that Black Lives Matter has been protesting authoritarianism in America. Cotton fails to see how we’ve been using our military might to impose our will upon other countries in order to extract their resources on the cheap, while sending the profits derived from those cheap resources to the top 1%. Cotton can’t even see the authoritarianism he so eagerly supports. He fails to see the ball and chain on our ankles, the American finance industry.

If Tom Coton were really serious about beating Cina, he’d be going after an economic policy that has been fleecing America hard for the last 50 years. He’d get serious about infrastructure spending so that Americans would have construction jobs to earn a wage they can use to invest in their future. He’d get serious about dealing with a strong dollar that makes our products look expensive in foreign countries and foreign products look like a great deal for us. He’d also get serious about educating mechanical engineers. We need mechanical engineers. Everything you touch has been touched by a mechanical engineer.

All of this takes time. And while Mr. Cotton (and most of the elites in both parties) have been cheerleading the top 1% and prioritizing their demands, they have ignored the rest of us. They have forgotten that the trade deficit represents the economic demand that went to another country. They have forgotten that the name of the game is demand, demand, demand.

But the banking system has been sucking much of the excess demand that isn’t sent to China, from our economy. Most of the money we earn pays for the home, then the car, then our education, with interest. Many of us are lucky if we have anything left at the end of the month.

The banking system got big in America. Before every revolution, we see the same thing. We see the banks financing asset bubbles that set up the wealthy to accumulate even more money at the expense of everyone else. This was one of the chief complaints that Karl Marx (and other classical economists like Adam Smith, Henry George, and David Ricardo) had against capitalism. Before every revolution, we see the debtors rebelling against the creditor. Before every revolution, we see wild income inequality. And Tom Cotton likes to talk about liberty as if it had nothing to do with debt.

But it doesn’t have to be this way. We could adopt public banking just like the Red State of North Dakota. Just imagine the postal service as a bank for the unbanked. We could think of the interest paid to the private banks as a private tax. We might consider the possibility that private banks would engineer the economy to keep the people forever in their debt.

We could periodically cancel many of the debts to the banks so that the people would be free again, and we could restore balance to our society as ancient civilizations did. We could set more reasonable limits on the terms of our loans so that people would actually have a chance to pay off their loans during their lifetimes.

85% of the outstanding stock in corporations is owned by the top 10%, you know, like slavery. Instead of that top-down hierarchy, we could set up a national dividend, also known as “unconditional basic income guaranteed” so that everyone earns something from the productivity gains accrued from technological innovation.

There are many revolutionary things we could be doing to fix our economy. But people like Tom Cotton and Donald Trump are too beholden to the wealthy. Cotton and Trump had nothing revolutionary in their thinking or their policies. They are merely dancing around the edges. Honestly, I have no idea why people would even bother to vote for those guys other than their charm. But I do know that it’s time we started to change the way we assign values to different economic systems.

Write on.

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