KevinSauls.com

Several years ago, I began hearing the term “information economy”. We were moving, the experts said, from an industrial economy to an information economy. When I first heard it my ears perked up. Something didn’t sound right and I didn’t hesitate to point out that that seemed a dangerous move to me. After all, what is “information”? Show it to me. Let me hold it in my hand. Show me that others need it and we’re the only ones that can provide it. Now, with the US economy failing, I look again at the the notion of an information economy and smugly note that I was right.

Think about it. In post-WWII US, manufacturing was the mainstay of our society. We built the best, most well designed and most desired products in the world. Nobody did it as well or as cheaply. The world came to our door, with their cash in hand, to buy the products we produced. We were a wealthy nation becoming more wealthy because we were able to provide what others around the world needed and wanted. We were a manufacturing giant and were able to produce everything that we needed. And, as a nation, we were wealthy. Our tax debt to other countries was minimal. In fact, in 1960, our total national debt was just $290 billion.

Jump ahead about thirty years. We began outsourcing production of many of our products to other countries where the quality of the product was as good, if not better, than what we were then producing, and we could get it done cheaper. And, that seemed like a good idea. After all, if we can get it made more cheaply and can still sell it at market prices, we come out ahead. The problem, as any union representative will tell you, is that while we Americans were reaping the benefits of high quality goods at reasonable prices, we were also shipping jobs and cash overseas.  Our ability, as a nation, to make purchases declined as the people whose jobs were shipped overseas no longer had an income to spend. The purchases that were made didn’t mean money flowing into America’s pockets to keep the country moving, it was flowing out to other countries, enriching them and providing them with increasing power, even as our own wealth faltered and our power diminished.

Now, you’re thinking, “so what? What’s all this got to do with the information economy?” Good question. Who made the computer you’re reading this on? It wasn’t an American. Virtually everything we rely on to maintain our standard of living is made overseas. With every purchase, money is leaving the US and flowing to other countries. “But”, you say, “they have to sell those goods to us, and contract with our companies in order to make and sell those goods.” Ummm, well, maybe. But as more and more other countries increase their wealth, their buying power — and their desire for more and better — increases. The global economy has allowed these countries to become consumers of goods, too. The dependence on US purchasing that we so self-righteously believe in, is fading. If we don’t buy, they can sell their goods to another country. What that means, folks, is that they don’t have to sell to us. They dont need our money the way the initially did. The result? Our position as an economic powerhouse is diminishing. We don’t produce a tangible good anymore, and our purchasing power is only a part of the total global market — a large part still, to be sure — but only a part. And that part is diminishing.

“Okay, but you still haven’t explained how the information economy is a problem.” Well, I ask again: what is information? And are we the only ones that can produce it? The answer is that information is vapor. It has no substance. And anyone can produce it and do so as well as we can. Building our economy on “information” is the equivalent to building our economy on the derivatives and other imagined equities that has brought our economy to its knees. Nobody needs the information we produce; they can produce their own. And we don’t have any other product to offer. We, therefore, have no more negotiating power. And we are doing, exactly what I feared we’d do when I heard that term several years ago — losing our dominance in the world market. The recent economic crises have only underscored that loss of dominance.

And, there’s one last thought: Our Achille’s heel. National debt. In 1960 our total national debt was about $290 billion dollars. I couldn’t find numbers for foreign owned debt in the 60’s, but did note that we invested in foreign countries far more than they invested in us. Today, we have over $7.5 trillion dollars in debt. With roughly $2.7 trillion held by foreign countries. Folks, that’s a lot of money! To whom do we owe the most money? Roughly 52% is held by Japan, China and the UK.

If those three countries decided to call in our debt, or refused to extend any more debt to us, we would be sunk. We can’t possibly fulfill those responsibilities. More importantly, we can’t operate without a continuing line of credit from other countries. In short, we’ve put ourselves in a helluva bind as a country. Now, how’s that information economy working?

I am going to admit that I don’t really have a good grasp on the bailout plan the government is so wound up about. $700 billion is a lot of money and as the “crisis” goes on, I’m increasingly confused about exactly what the purpose is. Wall Street is still running. Stocks are still being traded. Money is still changing hands. So, what’s the problem?

More and more I’m thinking that the wealthy Wall Street boys are finally having to pay up for their greed. But, rather than taking their lumps like the rest of us when we make stupid decisions that bite us in the butt, they’re now whining to the government that the entire free-market system is in jeopardy. But is it? Really?

I’m not so sure. I am sure that they’re all up in arms over the fact that their world is coming to an end. I’m less certain that in the long-run the rest of us are going to be as negatively affected as they say. Remember the people that are sounding the alarms are all Wall Street people. Secretary Paulson used to head up Goldman Sachs which, btw, just failed too. And for the same reasons as all the other companies. Is he really the right guy to lead us out of the mess he helped make? I”m not at all sure that Paulson isn’t just looking out for his wealthy buddies. Moreover, he is so arrogant that he believed he could demand and get complete and total autonomy in the process. He wanted to literally be above the constitution in terms of oversight. He and he alone would have the power to make the decisions and tried to prevent even court review of his decisions. Excuse me? Who the hell do you think you are? Do you really think the American public is that stupid?

I think Congress should scrap the whole notion of bailing out Wall Street. Let those unregulated, greedy companies fail. Then put the regulations back in place that prevented this kind of fuck up for more than seventy years. In stead, why doesn’t the government give the $700 billion to the American people who are in jeopardy of losing their homes? Why not bail out the public for a change, rather than some government. After all, despite all their noise, I’m not sure that the public is going to get a thing for their $700 billion investment.

I don’t know about you, but I am beginning to get a bit worried about the direction that the US is taking.

A couple of weeks ago I read that the US Border Patrol had decided that they could confiscate your notebook PC, go through all of the documents and records on it, share that information with whomever they choose AND not give you back your property. No probable cause. No due process. No warrant. The way I see it, the US Border Patrol sees themselves as being above the Constitution.

Here’s the Constitution:

Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Now tell me how the BP’s decision falls within that guideline. What this amounts to, in addition to being in violation of the Constitution is Government sponsored theft. Even if no incriminating evidence is found, they still don’t have to return your property to you. Do I hear echos of “Heil Hitler?”

The BP’s justification is homeland security, to ensure that no evil plans to destroy the country are brought in on laptops. Uh. Guys? Ever heard of the internet? I’m thinking that if I were going to communicate some evil plan, I’d send them through the internet. It would be HIGHLY unlikely that I’d carry them on my person, on a laptop. Talk about lack of plausible deniability!

During both the DNC and RNC, protestors were threatened, firehosed, and teargassed. Now, I’m going to admit that I’m a little out of the loop on this one. I didn’t watch either convention and only know what the media chose to show me. But, it seems to me that there is also a Constitutional right to assemble and protest peacefully. Ah, yes, that would be Article I, the very first amendment:

Amendment I

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Guess the political parties didn’t hear about that one yet. Yeah, I know it says Congress shall make no law … but shouldn’t that extend to those seeking political office — especially those who currently serve in Congress?

But, I guess neither party really wants to hear what people think. Neither knows, you know. They are getting their information from the yes-men and -women with which they’ve surrounded themselves. And, if you don’t think as I do — well — there’s always teargas.