Today, America’s “New Economy” is based exclusively on services - primarily financial and technology-based services, with a whole slew of attorneys and consultants to support transactions and legal agreements.
But there are other service industries as well. Over the past few decades, as America's economy has transitioned from old to new, millions of manufacturing jobs have been sent overseas. Many of these jobs have been replaced with blue collar service jobs like landscaping, valets, nannies, maid services, pet services, massage therapy and fitness trainers. Today, each represents a large and growing industry in America.
Others have enrolled in for-profit colleges hoping to transition into another career. Little do they realize, most of these “new job opportunities end up being dead-end jobs.
The fact is that economic and career opportunities are shrinking by the day in America; all due to the system of unfair trade advocated by politicians who have been bought off by industry lobbyist groups.
Which would you rather have; a manufacturing job with a nice stable salary, healthcare, disability, and retirement benefits? Or a job parking cars for tips?
If you’re a teenager or college student, you might opt for the later. The work is easy and you get several employee benefits - you get to see “hot” girls and drive “nice” cars. But those of us in the real world would prefer a stable job with a salary and employee benefits.
America's "New Economy" high-tech cities are primary based in California. In contrast, the financial powerhouses reside in New York City, Boston, and Chicago.
But as you might already know, New York has been in decay for many years, as has Chicago. And even the high-tech capital of the world, California is facing bankruptcy, as are most states and cities.
(Readers of my July investment newsletter will note that I made specific warnings regarding California municipal bonds.)
Most people realize that America's largest cities have been in decay prior to the current economic meltdown. For well over a decade, "white flight" has been responsible for the overdevelopment of suburban America. Many of these regions have sought to isolate themselves from the larger nearby cities. To achieve this economic and societal independence, they’ve built sports stadiums, airports, expensive schools and museums.
But these projects were financed largely by city taxes - property taxes, sales taxes and other taxes. What I am speaking of is a bubble in many small suburban areas across America that no one mentions. And it's in the process of imploding.
President Obama is already discussing what to do with the glut of ghettos and slums that continue to grow by the day. This just might be his best idea yet.
Don’t be fooled by the Washington hacks. America's Second Great Depression is still in its early stages, so hold onto your hats and try to stay afloat, because I don't see anything getting better on a permanent basis until real solutions surface.
As I detailed in America's Financial Apocalypse, the two most important of these solutions are a radical restructuring of free trade policies and overhauling the healthcare system.
Of course there are many other changes needed. America's pseudo-free market system must be reassembled with a solid foundation of regulatory authority and accountability, so that the financial, energy and other industries provide as much benefit for consumers as for the wealthy elite. All lobbyist activities must also be banned. Finally, the Federal Reserve must be forced to surrender its control of monetary authority.
Contrary to popular belief, not a single one of these issues have been (and most likely will never be) addressed sufficiently by Washington because our leaders are under the control of the Federal Reserve and corporate America. And while corporations certainly aren’t happy with the current healthcare system, it gives them an excuse to send jobs overseas.
Rather than huge manufacturing industries reminiscent of America’s “Old Economy,” the “New Economy” is characterized by high-tech firms big and small. But many of the jobs from this industry have been outsourced overseas, from Dell Computers (NASDAQ:DELL) and Amazon.com (NASDAQ:AMZN) to Microsoft (NASDAQ:MSFT) and IBM.
The “New Economy” is also characterized by huge financial institutions which scavenge off of consumers and corporations. This does nothing to create net productivity. The only productivity the financial industry creates is when it dumps off toxic investments to foreigners. But as we know, this represents securities fraud.
As you might imagine, most of America’s largest financial services firms also make extensive use of outsourcing. In America’s “New Economy” it has become exceedingly difficult to point to just one large corporation that has not outsourced jobs. Advocates of free trade claim outsourcing has created higher living standards, lower prices for consumers and better jobs for Americans. You decide.
As it stands today, America’s Ponzi scheme economy is in midst of collapse. Instead of providing real solutions, Washington insists on picking up the pieces and putting them back together. President Obama has backed away from his promises to restructure free trade. He also promised to hold all those responsible for the real estate and banking Ponzi scheme accountable, but has done nothing. Furthermore, his healthcare plan will not offer the kind of solution needed to restore America’s previous economic strength.
Finally, rather than diminish the control of the Federal Reserve, Obama’s strings have been pulled by Emanuel, Summers and Geithner to grant the Fed as the dictator of the U.S. financial system. This is an extremely dangerous move that will lead to nothing other than disaster.
We cannot permit Washington to reassemble this broken Ponzi scheme while placing even more power in the hands of the perpetrators because it will collapse again, causing much more devastation than we see today.
This is the reality of America.