Clinton once had a line “It’s the economy, stupid”, and one longs for someone to teach economics to the present administration.

I was always a union supporter, and many of my family and friends belonged to unions. But you know what happened to a lot of textile jobs in the northern states in 1950’s and 1960’s? They were moved to the south. My uncle’s small business would have gone broke except he was smart enough to retool his knitting machines and retrain his personnel to make small parts as a subcontractor. Yet most of the larger mills closed.

So the next time you watch and cheer “Norma Rae”, remember they got the jobs lost in Massachusetts.

Of course, now Norma Rae’s mill is probably closed now, and these jobs are in China, Honduras, or Indonesia. We used to check for the union label, but now it’s even hard to find clothing made in the USA. Ironically, here in the Philippines, we have the same problem: our wages are too high for many companies to invest here, and the corruption siphons off enough profit to make other countries look more attractive. So our people move elsewhere, to work in factories in Korea or Taiwan; yet even places like China and Saipan are losing jobs to places where people will work for an even lower wage.

This is nothing new, as I found out when I studied the Luddite movement.

… the conventional picture of the Luddism of these years as a blind opposition to machinery as such becomes less and less tenable. What was at issue was the `freedom’ of the capitalist to destroy the custom of the trade, whether by new machinery, by the factory system or by unrestricted competition, beating down wages, undercutting his ‘rivals and undermining standards of craftsmanship.

Seems like the poor people can’t win a break: which is why Economics is called the “dismal science”..

What is needed is compromise.

That brings us to the kerfuffle in Wisconsin.

The demonstrations in Wisconsin are not about poor people living hand to mouth and striking for a living wage, but about middle class folks with government jobs who object to a small cut in their benefits/wages.

The bad news: To manage the budget, the other alternatives for the governor is to lay off folks, or to raise taxes, or have the state go bankrupt.

The Union sees this as fighting for it’s life, but they seem to be unaware or unconcerned about these other things, which makes them look grasping and greedy in a time when a lot of folks have been laid off and are struggling to make ends meet.

This isn’t about Wisconsin, you know. In today’s over-politicized US, it’s about who wins and who spins the problems to win the next election. From the UKTelegraph:

Depressingly, Obama’s calculation seems to be that he can talk a good game on the deficit and spout vacuous slogans like “winning the future”. He’ll leave it to Republicans to propose swingeing cuts in entitlement programmes and then suffer a backlash from frightened voters at the polls in 2012

So instead of the president’s team looking at what is needed to improve the country’s economy, and then working out a plan to cut the debt, they are getting out all of the usual suspects to encourage the demonstration.

If a small cut in benefits or wages is needed to improve the economy, the unions should go along with it, maybe with the addendum that they would reexamine the cuts in X many years.

Unions have done this before, but that was in private industry, where everyone knew shutting down the plant was an option. But who is going to have the courage to say the alternative is to shut down the schools and offices?

Reality check, please.

Can’t lay off teachers, you say? Well, my first grade class had 62 kids and was run by a 21 year old nun who was still working on her degree. So yes, it can be done. And I know a lot of good Filipino teachers who would love to work for $26,000 a year teaching in Wisconsin. (Starting salary is $26000, average salary is $46,000 and average class ratio is 14).

And the dirty little secret is that a lot of the government offices that process data could be outsourced to Makati or Bangalore, as many private industries have done to cut costs.

Presumably the reason President Obama is supporting these demonstrations is that the federal budget is next on the list if the states succeed. Again, from the UKTelegraph:

The protests in Wisconsin coincided with Obama presenting his new budget in Washington…

He (Obama) cast aside the tough measures recommended by the bipartisan Deficit Commission he appointed and failed to tackle what everyone knows is the main financial drain – the big “entitlement” programmes of Social Security, Medicare (for the elderly) and Medicaid (for the poor).

Cutting these entitlements would hurt people, and those hurt would vote for the Democrats.

….or maybe not.

I live on “entitlements”, but the irony is that now I’m sending part of my social security money to help my son make ends meet after he was laid off.

So cutting my retirement means less money, but I would be willing to accept that if it meant more jobs so my son could work and maybe support me in my old age.

But there is another problem for those of us living on retirement: The danger of inflation.

I also have savings. My bank savings are “safe” but get little interest, my small investments in bonds etc. get a good yield, but are going up and down with the stock market.

So, no I don’t want my social security lowered, but better to get a slightly smaller check and not lose all my savings due to a stock market collapse, or worse, to lose the real dollar value of my savings from inflation.

The real danger is inflation. I remember the Carter years. I left the US with a year’s salary in my savings to work overseas as a missionary. When I came back, I found that even though I was getting six percent interest, that inflation was 18 percent. Not only had I “lost” money by faithfully putting money into savings, but now that money could buy a lot less than six years earlier.

One of the Tea-Party protesters allegedly held a sign saying “Teach Economics 101”.

That should be what the President needs to do.

Because without the president explaining and trying to compromise instead of playing politics, the only people who can explain economics to the common man are those like Rush Limbaugh, heaven help us.


Nancy Reyes is a retired physician living in the Philippines.

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