Audacity of Hope

December 20th, 2006 Book Review, Opinion

Barack Obama has laid out an extraordinary resume for a presidential aspirant in his autobiography “The Audacity of Hope”. All imaginable issues that one might wish to know about a potential candidate are clearly presented. This is a man anyone just left of the far right political spectrum would have to vote for – and he’s got my vote.

Barack is a politician and he writes as a politician. While no one can be all things to all people, he presents himself as a breath of fresh air; something which will be sorely needed after George W. Bush leaves the Oval Office. Can a black man win the Presidency? I can’t imagine the color of his skin can be held against him. But that does remain to be seen. For my part, it makes no difference and if it does, only in a positive way. Rather, I am disappointed that such a charismatic candidate must address the “issues” in the conventionally political way. Nothing else would suffice of course. It is whether or not – as with George W. Bush – he puts on a different coloration once at the reins of our National storm that may make a real difference.

Health care, education, social security, immigration, religion, foreign affairs, energy, environment, taxation, budget, the national deficit – all are addressed and his personal views and approach to each clearly put on the table in his effort to bridge the culture wars and reclaim the American Dream.

A more critical question is if we can reclaim the American Dream or if we have to redefine the American Dream.

Globalization is a political buzz word but it has a very real meaning. How it is defined and the scope of geopolitical issues it encompasses determines how much significance that “buzz” is given. As a nation, we have thrown the doors wide open and can no longer even remotely consider isolation on any issue. And all things political – Health care, education, social security, religion, foreign affairs, energy, environment, taxation, budget, the national deficit - all must be considered from a “whole world” perspective not a nationalistic one. This requires redefining “core values” and thus the “American Dream”.

Barack gives a poignant anecdote of a blue collar factory worker in Galesburg, IL who lost his manufacturing job at Maytag; Maytag closed their plant in Galesburg and moved the manufacturing to Mexico. From Maytag’s perspective of course they had little choice - if they wished to stay in business and remain competitive. To cover a decent living wage, benefits, health insurance, pension and so forth for each of its workers, the Maytag customer was unwilling to pay the premium for the product that those wages represent when they could chose one with essentially the same features and quality but at a significantly lower cost when the “same” labor (from Mexico or any other third world country) was significantly less. After all, health care insurance, pension plans, etc. are not nearly in Mexico what they are in the United States. Profits are king and how ever they may be distributed (stockholders or CEO bonuses) the profit motive versus non-competitive products and bankruptcy don’t represent a difficult decision in a capitalistic economy. You cannot fault Maytag. But sooner or later – when you displace enough workers – you eliminate your customer base. We can be sure there will be few who will buy – or can afford to buy a Maytag in Galesburg, IL. Maytag may know better of course and there certainly is a big customer base in China. That’s a hard reality. We can fault the CEO. Yes Maytag is still making a profit but the shareholders want more, the CEO wants more – and a “rational decision” of increasing profits by reducing labor costs is eminently logical. It overlooks the long term problem of eroding the wealth (consumer purchasing power) that allows those profits to be realized. But by that time both the CEO and his shareholders will have moved on.

A moment’s reflection and it is hard to identify any area of skilled or unskilled labor that can’t be found at a lower cost somewhere other than here in the United States. Manufacturing, mining, engineering, computer and electronic technology, medicine, financial services all have a skilled and growing labor force in China, India, and Indonesia none of whom dream of a comprehensive health care plan, or driving their BMW to work from their 6000 square foot MacMansion. If elective bypass surgery can be done in Jakarta for one tenth its cost here in the United States, ultimately it makes little sense not to buy the plane ticket – especially if the result is as good as or even better than what you can get here. To provide a worker with sufficient wages to sustain even a nominal quality of life in the United States in 2006 is no longer economically tenable and still derive profits that justify the capital invested. Or so? A solution would be to tax the CEO and the shareholder profits (for each Maytag sold here in the United States) – and turn the money back to those workers who lost their jobs. If that was the consequence of the “rational decision”, it would no longer be rational. Of course this IS protectionism.

The problem – the real underlying problem - is simply that we are all competing for the same limited resources. To get more of those limited resources, one must bid higher. So in the case of the Galesburg CEO and shareholders, they seek to maximize profits at the expense of the Galesburg workforce. In the long run though, Maytag won’t have the customers to buy their product if this same trend is repeated across the country and across various industries. And there will, again in the long run, be no real profit for Maytag. But the CEO and the shareholders will have made theirs and have the ability to bid higher for those limited resources. In effect, those extraordinary profits realized by the CEO and shareholders are stolen from the Galesburg worker. This is perfectly legal and a great deal for CEO and shareholder and is being repeated again and again – and again. Globalization of the workforce allows for buying low and selling high – before the markets have time to adjust to the real value of the transaction.

I’m sorry to say that Barack doesn’t provide any remedy to the “Galesburg” problem, but he does feel bad about it. Well, maybe he does. Retraining. Of course in the individual cases of his anecdote, that doesn’t seem to be working out too well, but in long run, remaining competitive in a globalized world economy requires a good education. Suggesting that, rather than manufacturing (a la Galesburg) ours is a knowledge based economy where eight of the nine fastest growing occupations this decade require scientific or technological skills, most workers are going to need some form of higher education to fill the jobs of the future. And thus we need more progressive education funding programs from our government to fill those occupations. Of course our government is us and the funding is our tax dollars; tax dollars hard to come by when you are not working. Again, a nice sentiment. Two points however: first our ability to educate our children in science and mathematics is clearly deficient compared to the global community. Our children have fallen behind. And secondly, how can we expect to develop competitive science and mathematics educational programs when we, as a nation, believe more in angels than we believe in evolution? If we have to tiptoe around issues as to whether evolution is a belief, a theory, or a scientific theory and compare and contrast to creationism and intelligent design as to being the foundation of our children’s’ scientific education – we’re already behind the eight ball. Forget regaining our competitive edge. While we are debating the number of angels able to fit on the head of a pin, other societies will be developing the medical technologies based on stem cell research, developing alternative energy sources that will continue to fuel the energy thirsty needs of modern society, and will develop a more rigorous knowledge based economy than can be hoped for here.