Tag: productive class

We’re all seeing the stream of statistics concerning America’s productive “middle” class (i.e., people who work real jobs): their net worth is down 40 percent, barely half of Americans have $500 in savings, there are more Americans on welfare than have permanent, full-time jobs, more American businesses are failing than being created, and so on.

While all of these things may be true, and while they do help us to see the problem, they don’t help us move forward. Worrying and complaining, no matter how ardently we engage in them, leave us standing in the same mess where we started.

But let’s start by getting some bearings.

The American Economy Since World War II, in Large Strokes

World War II was a reset for the American economy. With the other industrial powerhouses (Germany, England, France, and Japan) in rubble, the US, Canada, and Australia were the least damaged modern economies, and of those, the US was by far the largest. So, the 1950s and ‘60s were great times for productive Americans, particularly in any field associated with manufacturing.

But those other economies didn’t remain in rubble for long. Soon enough, their factories were rebuilt, and by the 1970s, they were competing with the biggest American manufacturers (particularly automotive and steel), who had grown complacent and arrogant. The car companies, as some of us will recall, were so arrogant that they developed policies of “planned obsolescence.”

During the ‘70s, Nixon and Kissinger re-founded the dollar, moving its base from gold to the oil trade. But still, inflation raged and manufacturing declined badly. By 1980, interest rates had been pushed to 20 percent in an effort to kill inflation, and so many factories had closed that there was talk of a “rust belt” running from Chicago to New York.

Then came something new… something called the FIRE economy. (FIRE stands for Finance, Insurance, and Real Estate.) And this new economy worked quite well between 1980 and 2007. The problem was, it was based almost entirely upon the temporary advantage held by the US dollar.

For economic success to endure, it must ultimately be based on production. You must produce things that other people are willing to pay for.

The FIRE economy did produce some things worth paying for. For example, online investment technology had real value, but it was value that didn’t extend very far. The first few products were very attractive to people, but adding a third and a sixth and a tenth online broker didn’t create much additional value. (Whereas a tenth automobile has almost as much value as the first.)

And even more basic than that is the fact that the FIRE economy was ultimately based upon debt. You can see this illustrated in this graph:

In essence, the US economy from roughly 1980 to 2007 depended upon people (mainly foreigners) buying dollars, even though they were declining in value. Obviously, this is not a viable long-term strategy.

Since 2007, the Federal Reserve has been printing money (wildly) to prop up Wall Street, while Main Street slides toward oblivion. It is supremely clear that the US government—regardless of the smooth words we hear from politicians—has defended the bankers and kicked the productive class to the curb.

So, this is where things stand. The question that faces productive Americans is this: What are we going to do about it?

What Is to Be Done?

The great trap embedded in the democratic ideal is to imagine that complaining will conjure magic; that if you complain enough and in the right ways, some ‘great leader’ will rise up and fix your problems for you. Let me be clear on this: All such thoughts are sucker-bait.

Your politicians—both Blues and Reds—have already sold you out. They’ve picked their sides, and they’re going with Wall Street. You’re on your own. I’m sorry if that’s hard to accept, but it’s true all the same.

So, if you actually work, your first challenge is accepting the fact that you’re on your own. Without succeeding at that, there can be no progress; you’ll remain on the ship while it goes down.

Once past that point, however, a world full of possibilities opens up to you.

The truth is that the American productive class is composed mainly of decent, capable people. They’re not suffering because there’s something wrong with them—they’re every bit as talented as their parents and grandparents were—but because Washington controls their lives and considers them fit only to vote, fight in wars, and to create more debt (aka buy stuff they don’t need).

But once you decide to ditch that script, as terrifying as it may seem, life gets fun. There are dozens of options to consider, and you don’t have to pick just one:

• Start growing your own food. You’ll get better quality and save money.

• Start side businesses. Become a part-time entrepreneur, run a business out of your garage, sell things at local markets, become a free-lance welder, etc.

• Start driving for Uber or Lyft, or start renting out spare rooms on Airbnb. And these three are only the best-known names; there are many others like them, and some of the others may be even better for you.

• Get into the Bitcoin economy. This is where some of the hottest action is, especially if you have a bit of technical aptitude.

• Start 3D printing. They call this “a factory on a desktop,” and it’s starting to revolutionize the world. Or join the related “maker” community.

• Start building drones. It’s actually cheap and fairly easy to do nowadays, and they don’t have to be used for spreading death and slavery, like military and surveillance drones.

• Start building robots. Technology has advanced to where custom robots are possible and effective.

• Join or create an intentional community. Intentional communities have a long and fascinating history. It has been a checkered history, but not a dull one. (I covered this in issue #16 of my newsletter.)

• Offshore your businesses. Most of the big corporations do it, so why not you? Sure, you’ll need some professional help, but it’s probably worth it. The big thing about offshore structures isn’t saving on taxes, nice as that may be, it’s escaping the paperwork that tortures small business owners: tax accounting, dozens of forms, endless reports, etc.

• Stop wasting your valuable time on the TV habit.

• And while we’re at it, stop being afraid of everything, including yourself. Consider homeschooling your children. Take your life back into your own hands.

Getting help is easy. There are Casey Summits, offshore conferences, prepper shows, shows with a slice of everything, and more. On top of that, there are dozens of good books, magazines, and websites.

Gathering information is mainly a matter of time; that’s easy enough. The real magic lies in the next step: Breaking your inertia and acting.

Nothing changes until you act. Everyone is uncertain, and everyone is scared, but only those who climb into the lifeboats will make it safely away from danger. Mere thinking and talking will solve nothing. You have to act.

So, Ms. And Mr. Productive American, pick your spots and stop going down with the ship.

Paul Rosenberg
www.freemansperspective.com

This article was originally published by Casey Research.