A Nation of “Two Heads”: The Government vs. The Multi-Headed Medusa of Powerful Industries

As we have witnessed the endless twists of health care and financial reforms this year, my impression on this country’s politics is, this country is not “One-Headed.”

The United States of America is more like a nation of “Two Heads”: the “Government” and the “Industrial Medusa” that consists of many small heads of powerful industries and their bands of lobbyists, including financial, pharmaceutical, health care, oil industries. The Government has the role of policing the nation; the Industrial Medusa manipulates the Government, media, and the public to set the social structure in their favor, in ways to minimize the nation’s regulations on them and maximize their money earning, profits at any costs, even at the destruction of their country and economy which nurture, feed them with money.

Over the last decades, it has been this “Industrial Medusa” that has won the game with the Government by manipulating, bribing, dominating it to structure this country’s social, economic structure best for their benefits. Taking undeserved money from the public through malicious business practices means that the public is losing money and becoming poorer. Loose or few government regulations on this Industrial Medusa has caused the misallocation of money resources in this society that has been drained from middle and poor classes’ pocket money for living necessities and poured into industrial riches’ pockets to support their unprecedented luxurious lifestyle. The outcomes of Industrial Medusa’s social misconducts have been not only the current short/mid-term recession but also disappearing middle class, deepening poverty of low-income class, and the weakening US industrial structure and competitiveness in world markets. This is exactly what has happened in this country and will continue so if the Obama administration’s reform efforts fail in vain.

Now, there is this fierce battle (and sometimes compromising) game of obtaining the dominance between President Obama/Government (which have been scarred by the endless dissonance and betrayal among their own folks, Democrats) and the Industrial Medusa. It has never been this close for the Government to take this dominance from the Medusa. Despite many current problems and flaws, the nation should remember that it has been only the current President who came this close to the reversal of chronically ill-designed US power game. Productive, healthy criticism will help the Government win the battle. But, just criticizing for the sake of criticizing will unnerve, deprive the energy and passion out of the President /Government and empower, help the Industrial Medusa win the game and maintain their dominance in US politics again. We should understand that the current troubles with financial and health care reforms are rather the indication of how tough, powerful the industries’ influence on US politics than the weakness, flaws of the President’s political skills and unfolding policy agendas. Politics, as usual, is a complicate game.

Below are the blogs of how these industrial interests are twisting the current reforms.

http://www.huffingtonpost.com/peter-dreier/waffling-democrats-health_b_376578.html

http://www.huffingtonpost.com/robert-reich/how-a-few-private-health_b_388788.html

http://www.huffingtonpost.com/2009/12/11/house-passes-financial-re_n_389267.html

http://www.huffingtonpost.com/2009/12/11/pharma-deal-shuts-down-se_n_388895.html

US Self-Sufficiency, No Trade, Global Isolation / Protectionism, and Collective Sliding into Poorer US.

The night before Thanksgiving, there was one person’s comment to my Huffpost comment that insisted on the isolation of US economy from the world, protectionism, and the lie of globalization.  As there must be a lot of people who share the same opinion as this person’s, I want to clarify their misunderstanding as much as possible. The contents of the comment is listed as below:

danarothrock replied on Nov 25, 2009 at 16:55:50

“Tarrifs were not the main cause of the 1930s depression. The cause was the exact same financial casino gambling that brought us down this time. Hence, the Glass-Steagall Act, which was repealed in 1999.

America grew strong in isolation and protectionism. We produced almost everything we needed, except rum, coffee and bananas.

Globalization – “Flat Earth” – has been the theory that has destroyed the economy of this country and several other countries. We are on the losing end of every “Free Trade” agreement. We are trading jobs for foreign workers. The Ex-Im Bank and Overseas Private Investment Corporation (two agencies of the US Treasury) are funding $billions every year for American companies to move overseas. 67% of American corporations have plans to increase offshore operations. Do some research on “protectionism”. “Globalization is a LIE.”

My Response was:

Although I am tired, sleepy now. I am still almost sure that “tariffs, protectionism” were the causes of Great Depression. That’s why, since then, there were  international multilateral negotiations to reduce tariffs worldwide and not to repeat the same bad experience of tariff imposition / protection. If you were not sleepy, please check the fact and let me know !

Regarding “America grew strong in isolation and protectionism,” this is the most “RIDICULOUS” statement that I have ever heard! You want to put this country in economic, political exile away from the rest of world and cut off its position of economic and political superpower in the world to degrade into poorer and poorer country? Let me guess. You must have never left your block of town to travel around and see the reality of the world.

What do we trade off by engaging in world trade?

LOSS :

Some labor-intensive manufacturing jobs as imports of those goods gain domestic market sales.

GAIN:

A. Gaining of export-related jobs (this is one reason of why the White House wish China to save US economy and unemployment problem through their purchase of US goods);

B. Cheaper imported goods make us be able to buy more goods, more foods, clothings, electronics, etc with same income. We feel richer when we can consume cheaper import goods; we feel poorer when cheap imports are not available and we have to buy more expensive domestically produced goods (please compare the numbers of grocery items that, with $100, we can buy from Wal-Mart (many of them cheap imports) and from a rather expensive grocery store. You will feel the difference of how much we can consume more or less with same income depending on whether cheaper imports are available to us or not.

Without cheap imports, we may save some jobs of ours or our fellow workers, but we altogether/collectively have to eat less food, wear less clothings and shoes, buy less toy…overall we will feel poorer without trade than when we have imports.

It would be a choice of what we prefer.

Unemployment: Blaming it on Wrong Causes? Why don’t we Blame it on Wrong Industrial Structure?

There was a comment to a blog about unemployment disaster by Adrianna Huffington. A person, nicknamed as Gatormouth, commented as below:

“ This obsession with pushing job creation as the central problem by pundits and politicians is a possibly deliberate distraction. The problem has been with retention of domestic investment capital and the exportation of existing and newly created jobs. Fair and reciprocal trade has been slandered as “Protectionism”. But “Free Trade” as practiced amounts to the equivalent of unilateral disarmament, a form of National suicide.”

My answer to this person is as below:

“Your comment is interfering with my Thanksgiving meal preparation and doing other fundamental living/bear- necessities.

This obsession with “Caring only for reducing Budget Deficits and Costs of doing whatever,” and “Having Nothing To Do /Doing Nothing” for “Recovering Economy and Helping with Unemployed People” as the central problem by “Misguided” politicians and people is a “Deliberate distraction for this country”.

The problem has “NOT” been with retention of domestic capital investment and the exportation of existing and newly created jobs. It has been the wrongly structured Economic Activities / Industrial Structure of this country, in which the major economic activities and growth have occurred in trading money in financial sector and having people enjoy good lifestyles via service and retailing sectors while US competitiveness in marketing and production of manufacturing goods have been staggeringly, delusively deteriorated by continuously producing goods that less and less people get interested in buying. Keep investing on businesses, production capacities or financial services, in which the executives keep producing products that nobody wants to buy, or legally robe investors’ money, does it help?

As far as I remember, the US government’s imposing “Tariffs” on international trade around the 1930s was one of the main causes of “Great Depression” !!! (apology if I were mistaken; there’s a saying that dog trainers don’t train female dogs because they forget their learned tricks after delivering puppies)

(Reference: http://www.huffingtonpost.com/arianna-huffington/will-the-unemployment-dis_b_368329.html?page=2&show_comment_id=35184189)

Job Creation: Do we need the Second Recover Package and Other Measures?: Comment to Adrianna Huffington’s Blog

In her blog, “Will the Unemployment Disaster be Obama’s Katrina?” published on November 23, 2009 at Huffington Post blog, Ms. Adrianna Huffington talks about the need of 2^nd Economic Recovery Package for the goal of creating jobs. In the blog, she presents four prevalent ideas of alleviating the current unemployment situations as below:

1.  Use Wall Street bailout funds left in the TARP program to bail out Main Street (using money for small businesses, public services).

2.  Enact a one-year payroll tax holiday (creating a moratorium on Social Security, Medicare, and FICA taxes will encourage businesses to hire new workers).

3. Expand the Small Business Association’s lending programs (45 percent of all job losses have been at small businesses).

4. Offer businesses a tax credit for every new job created over the next 12 months, or have the government pay a portion of the salary of new workers hired over the same period.

From my perspective, I agree Suggestion #1. I think that the government should even require the refund of some portion of the bailout money from “Big Banks” and the return of those banks’ bonuses to their Executives, which were overpaid unjustifiably or through loopholes. These executives failed in their jobs and don’t deserve to be rewarded for their failures; they should not be even called as “Talents” when they actually drove their companies into bankruptcies. What kind of strange definition of “Talents”?

Suggestion #2 sounds good, but with side effect. The government needs money to support states or public projects or in case of further need of another recovery package in future, in addition to current huge budget deficits. If the government enacts payroll tax holiday, where the government will make up for its huge (I guess) income loss? As Dr. Krugman suggested, borrow money from other countries at low interest rates?

Suggestions #3 and #4 sound good. But the focal point at this point seems to be “how to stimulate consumer spending / consumption”, which is predicted to be continuously sluggish even in 2010. Without consumer spending starting to resume at their normal rate, helping out with supply, business side alone may have limited effect on job creation.

(Reference: http://www.huffingtonpost.com/arianna-huffington/will-the-unemployment-dis_b_368329.html?show_comment_id=35184189#comment_35184189).