“Times are so bad and getting badder
Still we have fun
There's nothing surer
The rich get rich and the poor get laid off
In the meantime, in between time
Ain't we got fun?”
Written in 1921, those lyrics, from the Tin Pan Alley Song: “Ain’t We Got Fun,” feel just as timely today expressing the painful truth about class differences in America. Today those words warn of more “fun” awaiting the vast majority of Americans.
Avondale Shipyard workers in New Orleans are having lots of “fun” as their once-productive shipyard shrivels. The shipyard and the jobs in it can be saved and—in fact—expanded if a willing investor comes along with the vision to recognize the next big idea: true intermodal transportation in the U.S. based on short-sea container ships to ply America’s rich natural waterways and relieve our groaning surface transportation infrastructure.
Talk about opportunity! The volume of freight carried on U.S. waterways has plummeted over the past two decades. On Atlantic intracoastal routes alone, freight volume is down from 4.2 million tons in 1990 to 2.5 million tons in 2009, according to the Census Bureau. On the Gulf Coast, freight volumes shrunk by 7 percent between 1990 and 2009 while the overall U.S. economy grew by 52.5 percent.
Waterborne domestic shipments of all commodity types in 2009 represented only 38 percent of the total tonnage of 2.2 billion. In short, there is room for significant and profitable expansion for investors smart enough to see a growth industry when it is staring them in the face.
With $2.1 trillion in cash tucked under their corporate mattresses, U.S. companies continue to sit on the investment sidelines unwilling to bet on the productivity and capability of American workers by putting some of that money into ventures that create value and good jobs.
Vision on a grand scale is apparently not what they teach the cadre of elite leaders in the prestigious business academies like Yale and Harvard. No, the MBA curricula in America seems to be locked in on profits, finance, manipulation of tax loopholes and total disregard for the importance of human capital. It’s as if Henry Ford and his concept of an American middle class prosperous enough to buy his products never existed.
Instead, the current generation of business leaders has given up on America. Their next big idea is cultivate consumers in the developing world, and why not? The World Bank predicts that within 20 years, 93% of the world’s middle class will not be in the U.S. Most will be in India, China and other developing nations. At the rate our middle class is shrinking, that transformation will happen sooner than later.
Like the workers at Avondale, some 19,000 workers at bankrupt Hostess Brands bakeries across the nation, 13,000 American Airlines personnel facing layoff and the folks employed by Kodak have lots of “fun” in their future, too, as they shoulder the burden of their employers’ failures.
While the company is leveling demands for smaller wages and reduced pensions, Hostess Brands CEO Brian Driscoll is demanding a bonus and incentive package worth more than $3.5 million to sustain him as he works with the company’s creditors to get out from under almost $900 million in debt. (If he doesn’t get what he’s asking for he’ll leave, company lawyers have told the court.) The lawyers and consultants who draw up that plan are assured of handsome paydays in the process because they’ll be first in line.
While bankruptcies and layoffs trigger precarious times for working people, they are often profitable opportunities for the business elite, the investor class, hedge fund managers and venture capitalists who thrive on making hard times harder.
Far from being benign guardian angels of finance bestowing funds on struggling geniuses and innovations, today’s investor class is more often than not engaged in finding and buying struggling or bankrupt firms, disassembling their assets and selling the parts piecemeal. They typically walk off with obscene profits. Or, they’ll find small undercapitalized firms, take over assets like real estate, equipment and pension funds, then use those assets to borrow heavily, skim the profits and sell off the mortgaged shell. As the song says, “the rich get richer and the poor get laid off.”
America has an urgent need for investment in real growth like shipbuilding, transportation infrastructure, heavy industry and manufacturing—enterprises that not only to provide jobs that pay a decent wage, but also to add real muscle and healthy growth to the American economy.
Meanwhile, Republican hopeful Mitt Romney, an admitted venture capitalist, says, “I don’t worry about the poor, we’ve got a safety net to take care of them.” Really? A safety net, built with taxpayer dollars from those poor suckers who actually pay their fair share of taxes—at a much higher rate than the 15% Mr. Romney pays. A safety net that he and his “trickle down” pals would take apart in the interest of eliminating the federal deficit.
So, let’s review. America’s economy today is dominated by “for-profit” investors who thrive on pillaging companies that actually produce hard goods; dismantling those firms, selling off the assets and laying off the workers. The economic damage is then “socialized” by passing on the costs of sustaining an army of unemployed workers and their families to local, state and national government and the citizens who pay their fair share of taxes.
The investor class and speculators are killing our economy with constant injections of toxic greed. Meanwhile, golden growth opportunities languish for lack of investors who don’t seem to understand that America’s best days lie ahead.
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