The Race to the Bottom

We are racing to the bottom. That is what we are doing as a society, be it on the local, state, national, or world scene. As a society, we no longer strive for excellence. We are heading at breakneck speed towards Third World status.

Particularly in the Hickory area, we have bought into every aspect of this economic concept and it has taken a decade, but we have ruined our economy in this area and until we shift our focus, we are not going to improve.

In studying the dominoes that brought us here, I see a chain of events deeply associated with the long time business model of the area. We had built a vast manufacturing based economy that lasted decades until the 1990s. At that point, we had achieved full employment, which led to hyper-competition for labor during those years. Labor is the number one cost of a company's business expenses and the business owners and management looked at how they might be able to squeeze the labor model and increase their profit margins.

Along came the year 2000 and the stock market bubble involving high tech stocks. Much of the bust involved data communications companies, such as Global Crossing and Level 3 Communications, who were wiring the world. When the bust occurred, these companies drastically slowed down that wiring of Fiber-Optic cable and guess what? We had local companies such as Alcatel, Corning, and Commscope that were riding the crest of that wave. That is when our local economy hit the fan.

Up until June of 2000, it was thought that this Cable Industry business model would not end, but it quickly came to an abrupt and screeching halt. We all remember those days, when the first layoffs started in early 2001. No one thought it would last forever and it might not have, if it weren't for that infamous day in September, 2001.

What also coincided with this period of time was the influx of Hispanic workers into the area. When many laborers left their jobs working in textiles and furniture, working for $10 per hour, to go work for the cable companies making $15 to $20 per hour, the owners of those businesses looked for cheaper and more effective ways to control labor costs. That is the period of time when the State of North Carolina started turning a blind eye towards the massive in-migration of Hispanics into this community.

Now I know that the slacked-jawed amongst us are going to complain about me pointing out the obvious, but what I would like for you to realize is that I don't blame Hispanic Immigrants for wanting to come here. I have worked with many industrious Hispanics over the last 13+ years, since my days working at Bald Head Island. All they want is to improve their circumstances and be able to help their families.

What bothers me is the way that government and industry went about implementing this process. And what I at one time thought was a process, I have come to realize was all along a full blown scheme. It seems that there was no plan other than to bring foreign labor into our area to change the labor equilibrium by increasing the supply of labor. The purpose of which was not to fill labor capacity, but to suppress wages.

In this early 2000 period, we saw the perfect storm occur, because when the tech bubble burst, then additional labor supply increased at a time when the economy began slowing, causing demand for products to slow and thus demand for labor to slow also. The chase to the bottom had begun.

Instead of the old system, where migrant labor was sent home when their service was no longer needed, our government turned a blind eye, because in my opinion, many business owners wanted to continue to maintain their profit margins during the economic crunch.

That is where I am coming from. Business owners have failed to realize that their mindset that revolves around short term economic gain has created a cultural climate of long term economic pain for the middle class laborer. That is what I spoke of when I wrote in the article Getting Back on Track -- Creating a Legitimate Financial System, "A transformed investment model should take into account what impact an investment has on the community. Any investment needs to have a positive impact on what Catherine Austin Fitts terms the "Financial Eco-System" as well as yourself. If you make money, but everyone around you goes broke as a result of your investment, have you truly increased your own wealth (standard of living)?"

First, we saw NAFTA implemented and its effects on our economy. The blind eyed acceptance of illegal immigration into our economy saw a drastic reduction in the standard of living of the middle class, but people were able to keep their jobs for the most part, at that time. The next leg down came when the agreements in accordance with the World Trade Organization started being implemented fully. That next leg down was shipping labor demand capacity overseas.

What this has led to is built in excuses for business owners. "I had to hire illegals, because Americans won't do the work." "I had to hire illegals, because my competitors are hiring them and I can't compete." "I had to hire illegals, because they will do the work and they don't expect the money the lazy Americans expect." "I had to ship my labor overseas, because I can't compete against my competition."

The deal is that this is what industry wants and the Rich get Richer and the Middle Class and Poor get Poorer in this race to the bottom. Americans ARE willing to do the work, but they expect to be compensated fairly. Businesses are always going to have to compete. They certainly seem to expect labor to compete. Instead of asking government to not move us toward World "Free for All" Trade, they decided to utilize and abuse, not only people that were loyal to them in their country, but also take advantage of the illegals by low-balling their labor costs. They also decided to further allow the oppression and abuses that take place in many of these Third World countries and systems that they have sent those jobs to.

What good has any of this done? Our community has been decimated and the low skilled labor is cornered and has nowhere to turn. The cost of living continues to rise and yet income levels are stagnant or depressed. How are people going to make ends meet? Many older businessmen and governmental leaders, who pushed this race to the bottom, are at a loss as to how to even stem the tide of the drain that has been placed upon our community, while at the same time they are unwilling to accept any type of efforts that may be deemed 'Too Risky."

What does this mean to the quality of life in our community? Where will government income come from? Where will businesses find customers for their products, when much of the population can't make ends meet? How will we begin to grow the economy again?

The Prophet (HaHa!) Ross Perot from the 1992 Presidential Debate (He says 15 years):



The effects of NAFTA on the indigenous Mexican Population and the USA:



This is what I mean when I make the statement, Cheap begets Cheap. Everything in our community, when it comes to investment is about frugality. We don't need to be frugal. We need to create value. We need to make a profit. People have mistaken cost cutting measures with making a profit. You can cut your costs to ZERO and that doesn't mean you are going to make a penny. Many times you destroy your customer base by cutting costs at the expense of quality. Let me ask. Who is going to be more willing to ensure that they create an excellent product, an employee you are willing to invest in or an employee that you keep dangling on a string?

As a community, a state, and a country, we have to get back to the idea of excellence. Excellent products, excellent performance, excellent people, and excellent communities. We do that through respect and equality in the administration of justice. You can't look to take advantage of people by scheming them. It can't be about Dog eat Dog. It has to be about loving thy neighbor and helping thy neighbor and I don't mean that under the context of Unilateral Disarmament by being the so-called "bigger man." I mean that as in building relationships of trust, because once trust has been breached, it is hard to ever regain. But, is that not the valuable lesson that we have all learned. Whether we like it or not, we need one another to further our own personal growth.

If we get enough people to buy into the concepts that I describe above, and marginalize those unwilling to participate and play fair, then I truly believe that we will turn our economic lot around.

Communities encourage citizens, businesses and organizations to check out Google application

LENOIR - The communities of Lenoir and Hickory, counties of Catawba and Caldwell, and the towns and cities in between and close by were one of 1,100 communities to submit an application for the Google Fiber to the Home (FTTH) Request for Information (RFI) on March 26.

"Our application is www.googlehickorylenoir.com and it has become our resume to Google," said Lenoir City Manager Lane Bailey. "The resume tells our story on how this project could help transform our community into a technology hub in the south, add to our economic development tool box, enhance community organizations, assist the medical community, and provide endless education opportunities for citizens of all ages - from school children to retirees."

The experimental network that Google would build would provide a broadband connection that is more than 100 times faster than the current connection. Communities along the U.S. 321 corridor, which is also part of the North Carolina Data Center Corridor, joined together to submit an application to Google. The momentum began while building the resume between mid-February to late March when community meetings were held, focus groups met, and government agencies worked together to put together the Google FTTH request. The momentum continues as citizens
read the online resume that includes the community's story on how this project could transform the area, demographics, business opportunities, community organizations, and how the community has continued to persevere during extremely difficult economic times.

"There is a lot to learn about our communities on the resume and whether or not you have an interest in the project or do not know how it wouldenhance our community, we encourage everyone to take time to visit the website to learn more," added Bailey.

To stay up to date on the Hickory/Lenoir Google project, join the more than 6,400 fans on the Woogle Hickory Lenoir Facebook page or check the websites of the surrounding local governments.

According to the Google, a community will be chosen by the end of 2010.

Ray Cerda for Catawba County Clerk of Court Endorsements

I have read where Ray did not attend the Reagan Day picnic on Saturday and many people felt like he was not honoring those who attended by debating Ms. Bogle. He did want to be there, but he was attending a campaign workshop for veterans in Washington, DC put on by a veterans non-profit organization. These arrangements were made a couple of months ago and it was announced three weeks ago in the Hickory Daily Record. Ray has multiple avenues to contact him with questions as you can see if you click the picture below.

Below is a list of local community citizens who are supporting Ray Cerda. Click the picture to enlarge.

U.S. Unemployment: Rich = 3%, Poor = 31%

Unemployment for Those Who Earn $150,000 or More is Only 3%, While Unemployment for the Poor is 31% - (Washington's Blog - April 24, 2010)

Notes from this article

In the face of one of the worst economic environments in memory, those in the highest income groups had nearly full employment levels, with just a 3.2 percent unemployment rate for households with over $150,000 in income and a 4 percent rate in the next-highest income group of $100,000-plus.

The two lowest-income groups -- under $12,500 and under $20,000 annually -- faced unemployment rates of 30.8 percent and 19.1 percent, respectively.

Official figures put unemployment in the United States somewhere between 9 and 10 percent. But the official figures use a very different measure for unemployment than was used during the Great Depression and for many decades afterwards.

This article also points to what former U.S. Labor secretary Robert Reich states as the permanent destruction of jobs in America:

This means many Americans won't be rehired unless they're willing to settle for much lower wages and benefits. Today's official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay as a condition for keeping them. Or they've lost higher-paying jobs and are now in a new ones that pays less.

Yet reducing unemployment by cutting wages merely exchanges one problem for another. We'll get jobs back but have more people working for pay they consider inadequate, more working families at or near poverty, and widening inequality. The nation will also have a harder time restarting the economy because so many more Americans lack the money they need to buy all the goods and services the economy can produce.

An excellent summarization of the unemployment issue done by Washington's Blog last August - The Rising Tide of Unemployment in America: How Bad Will It Get, And What Can We Do?

The Hound knows that it rolls downhill. Many Executives want to make sure that they don't feel the pain and so they do whatever they can to preserve their own standard of living many times at the expense of others. It seems to me that the best managers have a firm understanding that they must put some skin in the game by cutting their own salary also.

Those managers who choose not to be a part of the team will be able to stem the tide of the negative economic climate over the short run, but eventually they will see their leadership fall into misfortune. The average laborer has to accept the way things are in this current economic debacle and keep moving forward. It is a matter of survival.

When we take a look at what has been happening, we see that people who were previously in the $50k to $75k range are taking paycuts and/or having to take on more responsibilities as fellow employees are laid off or reduced through attrition. People who are laid off and looking for new employment are expected to fall to the next tier down in income level. Someone that was making $50k per year has to take a $35K job, a former $35K wage earner is now working at a $25K job, and someone previously making $25k has to take a $20K job, etc.

People are left scrambling, because their expenses are the same or higher. The mortgage is the same, the car payment is the same, Insurance is higher, utilities are higher, fuel is higher, food is higher, etc. So people are going to have to find little side jobs to supplement their income and usually these are low to no skill jobs.

Where does this leave the Unskilled Laborer? The rest of us are underemployed and we are soaking up jobs that used to go to those with lesser skills. It means that they have little, if any, prospects to find full time employment. It means most likely that they will have to depend on Government and Society to help them get through life. And, in the end, that will mean more of a burden on the rest of society as we have to help those who essentially will be permanently unemployed.

Getting Back on Track -- Creating a Legitimate Financial System

The second wave of the World Economic Depression is upon us, states Webster Tarpley. I certainly don't agree with all of Mr. Tarpley's conclusions, because he doesn't seem to think Franklin Roosevelt ever did anything wrong and he seems to despise all that was Ronald Reagan, but I listen to his articulate points of view, because much of the historical context from which he speaks are very logical and well thought out.

He has spoken thoroughly on the subjects of the current economic crises faced by Greece and Iceland. He states that what we are seeing is Hedge fund mayhem -- Hedge funds vs. World Civilization. I don't see how anyone can disagree with this, especially when we see Goldman Sach's fingerprints all over these scenarios that have unfolded.

We have seen what has happened with the ratings agencies who are supposed to tell us how worthwhile investments are supposed to be. How many times over the last few years have Moody's and Standard & Poor's told us that these Country's and Corporate interests were fine, that everything was fine, only to wake up the next morning to see a tidal wave wash over companies where they have told us that everything was just fine. Look in hindsight at the health of Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, Fannie Mae, and Freddie Mac. Where were these ratings agencies? They certainly don't seem to have much more of a clue than anyone else.

First of all, the accumulation of Financial derivatives that have created the economic debacle we are in needs to be reigned in. In my opinion, no one can legitimately intimate how these financial instruments benefit society. We have seen this time bomb go off and it is impeding the creation of capital. We need to begin fully regulating all of these instruments and the hedge funds that are so heavily invested in them.

Many of these Derivative instruments are nothing more than legalized gambling. Would you want your country or society invested in a Las Vegas Roulette wheel?

There needs to be a few things done in my opinion:

1) We need to Nationalize the Federal Reserve System.

It is obvious to me that the Fed has abrogated it's responsibility in overseeing Holding Companies and Financial Institutions. Once the Fed is nationalized, then we need to inspect the various Financial Institutions to discover where fraud has been committed in dealing with the derivatives issue and then render those contracts null and void. We must clean up this derivatives system in order to restore the viability of our financial system.

2) I agree with Tarpley and others who believe in a few simple steadfast underlying financial benchmark rules:

a) No more Adjustable Rate Mortgages.
b) No more Pay Day Loans and Usary laws need to be reinstituted and enforced.
c) Full regulation of Collateralized Debt Obligations (CDOs) and outright banning of Credit Default Swaps.
d) Limit the size of banks in some manner. We need to get away from the too big too fail scenario.
e) Reinstitute some form of Glass-Stegall to insure that Holding companies are limiting risks.
f) There should be a reserve requirement that obligates a financial institution that creates an instrument to hold a certain percentage of that instrument.
g) Institutional trading should be taxed (I believe at 1%). The "Too Big to Fails" created this mess. They need to pay to clean it up.

3) When it comes to fixing the local community economies in the United States:

a) It is time to institute fair trade policies at the national level. No more "Free for All" trade.
b) Create a local stock exchange, in which inhabitants of a community can invest in local businesses for capital generation.
c) Create a Micro-Lending syndicate in which entrepreneurs can obtain small capital, short term loans.
d) Invest in local educational infrastructure by creating partnerships with local businesses to offer mentoring and scholarships.
e) A transformed investment model should take into account what impact an investment has on the community. Any investment needs to have a positive impact on what Catherine Austin Fitts terms the "Financial Eco-System" as well as yourself. If you make money, but everyone around you goes broke as a result of your investment, have you truly increased your own wealth?
f) We need to move away from trying to control symptoms of our structure of governance and finance and move towards relating the framework of the structures to modern society.
g) Don't let politicians try to buy you with you and future generations money, after all it is our money not theirs. It is time for accountability and for investments to be logical. Investments should create value.
h) It is time to get unreliable information and data out of our lives. Turn off the TV and start delving into information yourself to get a more well-rounded picture of the subject of study. Corporate media outlets have an agenda and agendas impede intellectual growth.
i) Decrease your debt. Debt comes with strings. The less debt one has, the more liberty one has. Invest in tangible non-perishable assets, such as non-perishable food and food production systems, water filtration, and methods to get off the electrical and financial grid.
j) The greatest investment that one can make is in their being - mind, body, and spirit.

Do You Believe in the Pledge of Allegiance or is it just a ritual? Why do you say it, if you don't believe what it stands for? I would certainly respect you more if you don't say it, because you don't believe in it.

Because you know what it says, "I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all."

If you don't want to live in an Authoritarian-Banana Republic with Cronyism underpinning our Financial and Cultural Framework, then you better realize that we are going to have to take drastic measures, because we have gotten way off track. You need to realize that it rolls down hill. You might think, in the back of your mind, that you are a top dog and you will be alright; because you can take advantage of people on some level, but there will always be someone bigger and the time will come when they will roll right over you and not even think about it, like some don't think about the repercussions of what they are doing now.

If you want to save our republic, then we must have equal justice for all and the first step towards getting back on the right track is saving our financial system and demanding accountability from those in positions of power, from top to bottom, relating to that system.

Do you enjoy "Dog eat Dog?" Without equal justice for all, we are afforded a World of "Armageddon Rules" -- there are none!