What America Needs – But Is In The Process of Destroying

Friendshoring Vs Protectionism

One of the greatest threats to America and its prosperity, is protectionism. Does America want to create wealth for the few, by increasing share value and stock prices, and do Americans in turn simply want cheap goods and services, — or does America want a stable workforce, good paying jobs and financial stability?

Many people will of course say, that they want both.

But the reality of the situation is that in order to have both, requires some massive changes in where wealth is located. If the 1% of the richest Americans retain 85% or more of the wealth, as is now the case, then undoubtedly the inequality in wealth will mean that while products may well be cheap, the stability of society and especially the security of people generally, specifically those who are not the 1%, will suffer.

Without decent jobs and societal security, nothing else will be secure. The anger of the middle-slipping-class, as I call it, is increasing as they feel threatened. Job security is decreasing, while new skills require up-skilling, education and the learning of new technologies that can provide the kind of jobs that offer better pay, more productivity, and where capitalists can see stability in the market. For the middle class, security, benefits, decent pay, access to education and health care, along with affordable housing is possible, but only when wealth in invested in infrastructure, training education, and health care where the middle class can retain decent jobs through investment in new technologies that require a trained workforce.

As long as the fake economy, where the concentration of wealth is held by the 1%, is not shared, – where less than 10 or 12 percent of the general adult population is all that can afford to invest in the stock market, for example, then the creation of wealth will stay concentrated in the hands of the very few. And investment will continue to be both concentrated, and move out of the United States.

By America relying on supply chains that are globalized and essentially offshore, it provides the stock market and investors with the highest benefits and profits. Profits for those with capital and a concentration of that wealth increasing in large companies, whose employment is increasingly offshore as well. But the downside of this has become more than obvious. While corporate elites, industrialists and technology companies, global in scope, have become increasingly enriched, the middle class has been in the process of being hollowed out.

A service economy doesn’t produce wealth for the middle class, it actually does the opposite. And by offshoring and allowing corporations to increasingly concentrate wealth in the stock market, in a financial sense, while looking good on paper,- actually creates very little in the way of income for those outside of the 1%.

Massive tax cuts for the rich does not equate to increased wealth for those in the middle class or obviously, the poor either. Trickle down economics is an abject failure. By investment in infrastructure and by near-shoring and friendshoring, — the means of integrating production, skills and resources from and in other countries — friends — the U.S. supply chains then have a reduced reliance on offshore parts and components.

This is why China is now producing most consumer goods, enriching the 1%, creating cheap products for Americans, yet diminishing investment in American jobs and the industrial base within America. Friend-shoring does not mean persuading (or worse, threatening foreign companies to locate in the United States). Friendshoring approves stability as allies sharing resources for the development of ‘homegrown’ industries and products improves job creation, reduces the reliance and the distances in the supply chain and improves the development of industries that produce added-value to the products made at or near home, for both parties.

Geopolitics then becomes less of an influence, or threat.

Unfortunately, America now has a transactional leader. But worse yet, he is a self-interested transactional leader. One who believes in benefitting the 1% at the cost of the poor and ultimately the quickly eroding middle-slipping-class. The concentration of wealth means that housing prices increase, health-care costs increase, poverty and dependence on the social safety net increases and the inequity of taxation continues to erode the amount of money that everyone but the 1% have access to.

It also increases dependency by the middle-slipping-class and the poor on cheap goods, made offshore, benefitting the 1%, who pay no tax and invest solely in the global stock market.

The financial markets become more restrictive, interest rates continue to increase and the purchasing power of the general public decreases, further driving sales for cheap products, for example those made in China, Vietnam, Malaysia, India, etc. etc.

It becomes a vicious cycle of dependency on foreign markets and increases the damage that occurs when disruptions occur due to geopolitical problems, — and increasingly as climate change and its attendant problems occur. Pandemics and new zoonotic virus transmission, also increasingly endangers long and distant supply chains.

Friendshoring Requires Friends

The problem for the United States, is that when the leader of the United States is a self-interested kleptocrat, he quickly destroys any friendship that existed or will exist. The application of tariffs will lead to increased cost to the taxpayers, counter tariffs will increase costs and increase inflation, along with the removal of foreign investment and a continuance of the enrichment of the 1%, at the expense of, you guessed it, the middle class.

Allies, will quickly realign their interests to ensure that they, as a group of allies, exempting America, retain the ability to stay financially secure, whilst creating new growth within the group. This in turn will mean that America, without friends will increasing find itself isolated, resulting in less geopolitical and financial influence. Financially, those countries, without any influence or invested interest in the United States, will create their own financial standard, (as is being attempted currently by the BRICS alliance) and move away from America’s financial hegemony created by the U.S. dollar having been the defacto global currency standard.

That is the point at which all the chickens will come home to roost, and America, without geopolitical power, or the currency of choice will need to pay the piper. That being, a massive national debt which currently exists and will be made increasingly worse by Trump and his ilk. A deep recession or depression is then a likelihood in America.

Trump doesn’t care about allies, and in reality, he doesn’t care about Americans either. He cares about power, wealth, manipulation, threats, and if they fail, using the might of the U.S. military to assuage those who can be threatened into compliance. Trump cares about corporate profits and enriching the 1%. He will continue to rapidly increase the national debt while taking and making personal and profits for other oligarchs until he has left office.

And, if and when the economy collapses after he has left office, — well his wealth will still be retained, and likely invested offshore, while Americans will be left in a distressed economy, depressed financially and incapable of changing the situation for a considerable period of time.

In addition, it will have no friends, no alliances, and no other nation willing to trust America in the future.

That is the America that Trump is creating, and we, those outside the U.S. will want no part of it.