Thursday, November 20, 2008

The free trade act

Please read The Root Cause of Recession before reading this. See below.
In breaking down the root cause of recession we ended up at the free trade act. To review very briefly we start with the loss of a job, cause: company profits are down, cause: less customers, cause: high gas prices, cause: high oil prices, cause: demand is going up, cause: developing countries are growing very rapidly, cause: the free trade act. What is the because behind the free trade act? As large corporations reach maturity their growth slows. They've bought up all the smaller competition. All that's left is large companies competing for market share. Without growth you don't attract investment in your stocks. The natural next step is to create a larger economy to grow in. The free trade act creates a global market place. How many stores did McDonald's open in China and Russia? Let's just put it this way, the business growth there is very big. There's a big difference from how the USA developed from small start ups and new products. This time the large developed companies are walking in and taking over way to fast. McDonald's is no start up company. Not very much chance of starting a new burger joint and growing the franchise. These other countries were poor dictatorships, Communist etc... so how do we sell things to the poor where the leaders will not let us in anyway. We had to start by letting them sell things here. It started with toys, small household items. Electronics were quickly gobbled up. Do you remember when we had toys made in America? It seems like they never existed. We gave away the electronics industry. Do you remember computers manufactured right here? American made TVs. and radios Not any more. Lesser know is clock companies. Sligh clocks were made here until just a few years ago. They were true craftsmanship with beautifully engraved brass clock plates. Real wood cabinets crafted with pride. They were the last clocks made in America. Lionel trains, hand built, finely crafted, highly collected, built right here in America. They folded to foreign competition and closed their manufacturing a few years back. Now they import components and do a little assembly here. What's left but the auto industry. Hang on to your hats because their on the edge of bankruptcy. Of course you can always buy a foreign car so who cares. 10 million people who will loose their income and health care, that's who. It's to bad no one could stand up for the smaller manufactures as they were driven out by low cost (cheap) foreign goods. Well the foreign strength has grown to threaten the largest manufacturing in America, auto companies. Of course Washington is saying it's just a matter of time. They'll be loaning (25 million bail out) money to companies they've been working so many years at giving away to other countries. Do they have the immoral guts to wipe out 10 million Americans with one swoop of excuses. You know they want to. They've been leading up to this for a long time. One statement said that letting the autos go under would wipe out the middle class. Yes that old story of all that's left is the wealthy and the poor. I wonder if that would piss anybody off? So why would you want the auto companies gone? Well it's the number cruncher dream world. Simple middle man philosophy. Let someone else do the work, own the facilities and you just sell the products for more. It's so close now they can taste it. You might wonder how they will be able to sell things if most of the people are poor. I wonder that myself. My mother always said " Don't say good luck because that implies you need it" For my 50 years of life I haven't said it but I'm thinking it now. The largest companies, biggest pools of cash wanted global growth. Washington created the free trade act. The free trade act is the enabler for global corporate growth. This act came with a huge cost to American manufacturing jobs. The jobs that can't be moved out are left. Health, service, environmental, law, financial and what ever else you can think of. No manufacturing left after autos.

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