Follow The Money Where?
So things got better for pensioners and those who live off their investment incomes, but worse for those who actually work for wages. Which doesn’t surprise me, but does tie in with the question I’d meant to ask anyway: where exactly does America’s wealth come from these days?
JUST in time for Labor Day, the Census Bureau seemed to indicate that labor itself was no longer such a good way to get ahead.
Incomes rose last year, thanks largely to higher Social Security payments and investment returns, the bureau said last week. But median earnings failed to keep pace with inflation for a second straight year. Even as the economy has continued to grow recently, some workers have accepted outright pay cuts, men have dropped out of the labor force, and debt has kept rising relative to income.
There was a time when American companies manufactured goods sold to eager consumers all over the world, and our country got rich. Now companies like Lockheed and Raytheon and Westinghouse are basically welfare recipients, making expensive weapons our government buys at exorbitant prices.
Except for weapons, we don’t make much to sell to the rest of the world. (And even the weapons we export are often paid for by us, via foreign aid.) When manufacturing died we heard “Don’t worry! We’ll transform ourselves into a sleek service economy!” But it turns out a lot of those services can be outsourced. As for those which remain stateside — who’s ultimately generating the wealth to pay for all this?
We export food, for a profit. We export weapons, but not really for a profit. We make money exporting our pop culture and music to the rest of the world. And we still have a pretty good computer/software industry. But otherwise, what do we actually do? How is our wealth created? We’re not even paying for the stuff we import from China and elsewhere, but buying it on credit. What happens when it comes time to pay our debts?
We still have the outward appearance of a wealthy and strong society, but are we generating new wealth or spending our hoarded principal?