by Cameron Salisbury
Someone finally said the obvious right out loud. A talking head on the PBS News Hour told Jim Lehrer that Americans must get used to a lower standard of living. In the years since globalization made corporate competition synonymous with exporting American jobs, closing factories, removing tariffs, and importing low paid H1-B workers to replace U.S. citizens and reduce wages, the downward spiral has picked up steam.
The approaching abyss had been held at bay by the now defunct mortgage-securitization bubble. Homeowners were encouraged to treat their houses like a piggy bank, refinancing at ever higher valuations and lower interest rates to maintain life styles that they could no longer afford on their receding incomes. Much of that liquid equity was transferred to China and other third world countries to buy the goods that free trade produced at bargain prices and that a hollowed out U.S. manufacturing sector could no longer produce. More than one economist declared the U.S. bankrupt in all but name.
As households and the nation slid ever deeper into debt the pundits blamed the free-spending U.S. consumer for problems that government policies had caused.
Armageddon, no longer invisible in the distant fog, was held back, at least temporarily, by sheer terror in the rest of the world at the dimensions of the U.S. fiscal mess.
The regulatory safety net, created during FDR’s New Deal, for decades provided the underpinning for sane capitalism and general prosperity. The dismantling of financial sector regulation was bought and paid for by the same rootless, multinational corporations that lusted after cheap foreign labor and the elimination of import penalties.
The stock market briefly climbed to over 14,000 before the house of cards crumbled, right on schedule, as the irresponsibility of Wall Street and Congress settled in. All those no-documentation, no down payment, adjustable rate home mortgages imploded in slow motion, one foreclosed home, one “high grade” investment, at a time.
As foreclosures annihilated neighborhoods and cities, Bear Stearns went on life support; hedge funds and airlines struggled, with mixed results, to avert collapse; 232,000 U.S. workers lost their jobs in the first 3 months of 2008, and CEOs, true to form, walked away with millions.
And then, playing their accustomed role in the repeating drama of corporate financial malfeasance, the U.S. government stepped in to bail out – ok. You know who, and it wasn’t the taxpayer. Corporations that had spent millions in tax sheltered lobbying expenses to effectively destroy the regulatory safety net couldn’t make their way to the taxpayer trough fast enough. For the good of the country, of course.
While corporate titans saw the American worker as their opponent in a zero sum game, our government acted as their enablers. The collusion of our elected representatives with their corporate financiers in the hollowing out, selling off and mismanagement of a once vibrant economy has been a sad, and possibly final, chapter in the American success story.
As Jim Lehrer’s guest implied, what comes next may be a standard of living that none of us could have imagined – except those who have spent time in a third world country.
Take Ecuador, for example.
I visited Ecuador not long ago when my daughter was in the Peace Corps. I knew before I went that it was a poor country and that the water was undrinkable. But nothing, not the guide books, not the internet, not descriptions from previous visitors, prepared me for the shock of living, even temporarily, in a culture where government services are virtually nonexistent, and where 80% of the population is officially classified as poor (WHO/UNICEF.)
In real terms, here’s what that means:
–Even in urban areas, where the majority of homes have water connections, it is available only 50% of the time and the quality is always iffy. Ditto for electricity. In many areas, the day ends when the sun goes down.
–The lack of water treatment facilities means, among other things, that toilet paper cannot be flushed away. It is kept in the home for later disposal.
–Women in much of the country wash clothes by hand in a concrete tub. I actually saw a woman using a rock to clean clothes.
–Trash is everywhere. One of the first things visitors notice is the ubiquitous filth.
–Streets are filled with whisper-thin stray dogs and cats.
–In very poor barrios there are no trees or grass or flowers to be found. Just dirt or mud, depending on the weather.
–Car and bus drivers are supposed to be licensed, but with few police and effectively no traffic control, no one knows how many actually are. Obeying traffic signals is a matter of personal preference. Car insurance is a luxury and “not required” as one official told me. Remember this the next time you read about yet another bus accident in Central or South America, where a bus tumbles off a highway and down a mountain, killing everyone on board. Traffic accidents are a leading cause of death in much of the third world.
–Unfinished buildings are everywhere, frozen in time, awaiting further funds from adult children working in the U.S. or Spain. An estimated one in ten young Ecuadorians has emigrated for work reasons, often, tragically, leaving their own lost children to the uncertain mercies of friends or family.
– The relative opulence of a home is often a testament to the number of children a family has working abroad. The poorest of the poor live in shacks made of cane sugar stalks.
– It’s not unusual to see visitors walking along looking at their feet. That’s because the sidewalk is uneven and holes, including sewer holes, as well as sudden mountains of pavement, can appear unexpectedly. Roads can be so rutted that taxis refuse to navigate them.
–People get around by bus. Driving a bus is an entrepreneurial activity for upwardly mobile families in Ecuador. A family saves up enough to buy a second hand bus and they’re in business: the dad drives and the kids go along for the ride and collect the fares. Mom is probably at home managing the small store that is the front room of their three room house. The store sells to their neighbors whatever vegetables the family has raised and other small items, like cigarettes at three for a dime or bottled water for 25 cents.
–I saw police (or were they soldiers? Hard to tell when the military and law enforcement are interchangeable) only twice during the time I spent in Ecuador. They were standing guard outside banks, state of the art weaponry at the ready. What little law enforcement exists seems there to protect the property of the rich.
–Criminal activity is a constant concern. Barred windows appear in all areas of the country and among all types of homes. In my daughter’s travels, she found that armed robberies on busses were rather routine, which accounts for the fact that many busses have a barrier behind the driver separating new and possibly dangerous arrivals from seated customers.
–Typical for third world countries, public education is limited. It is usually only the families who can pay whose children attend school. Huge numbers of families can’t afford tuition or uniforms or books, children may go to work before their teens, and the country remains impoverished.
–A few thousand of Ecuador’s estimated 13 million citizens are tall and white and Spanish, unlike the majority who are Indian or mestizo (mixed race). They are the upper class, and for many decades, they were the ruling class. Today they live behind tall barriers in exclusive enclaves, and they trust no one from outside with so much as their phone numbers. They hire body guards, send their children to be educated in the U.S., and remain active in politics in this politically unstable region.
–Since precise statistics are unavailable and most estimates in the third world are essentially guesses, no one knows the true extent of unemployment in Ecuador. Nevertheless, we observed massive numbers of people, with neither education nor skills nor available jobs, who simply stayed at home every day. We were awed by the lack of productivity in much of the country.
My daughter made good friends in Ecuador with people who were, in many ways, very much like us. Their ability to stay in touch after her tour ended was nearly impossible, however, since the mail system in Ecuador is close to nonexistent and because the overwhelming majority are too poor to have good access to telephones or computers. Even if they did, those living in or near poverty spend most of their time on tasks necessary to their survival.
Concerns with public health and safety are ample reasons to hope the U.S. doesn’t descend too far into the approaching abyss. But there is also much to recommend this other world. Families are strong, neighborhoods are stable. Life is simple, ads for the latest trinkets are nonexistent, and no one worries about keeping-up consumerism.
As U.S. citizens travel the economic path laid out by our multinational corporate government, we may all have reason to look for the bright side.
