Can the American Economy Recover?

By Sarah Viets
8-4-2008

While McCain and Obama hone in on their battle for the American presidency, both candidates’ economic plan becomes more similar or bipolar – depending who they’re speaking to and if they’re in Ohio or California. The sad part is that the majority of American voters don’t believe either candidate has what it takes to heal the American economy, according to a new national poll posted in the Washington Post.

So what’s the problem? Have American voters lost faith in American politicians, or do Ohioans and Californians believe that the problems with the American economy are too big to fix?

The American economy has drastically changed over the last 40 years. Americans hardly produce tangible goods, like TV’s, refrigerators, and clothes anymore. Instead, the majority of people produce a “service.” Workers guide lost soul down the aisles, stock shelves and ring up registers at big box stores, like Target, Wal-Mart, and Home Depot.

But did it have to change? Why did American businesses take their shops overseas instead of relying on Americans to build household products and the clothes on our backs?

Companies realized that if they could sell TVs, clothes, shoes, and bikes at a lower cost, they could increase their sells. In other words, more people could afford more stuff if they lowered their prices. (Which is why more Americans can afford to buy TVs today than 50 years ago.)

So what happen? American businesses decided to move overseas so they could decrease how much it cost to build TVs, clothes, computers, pencils, or furniture. They decided to move their companies off American soil so they could pay workers less than they paid American workers. Why? Lower wages means cheaper price tags. Why else do you think American made products are so expensive.

And let’s not forget, businesses around the world compete against each other. They compete for peoples’ money. Therefore, American companies have to compete with foreign businesses in order to succeed. They must produce cars, TVs, pencils, clothes and computers cheaper than China, Germany, Brazil, and India in order to thrive.

That’s a fact, that’s the way economies around the world have operated for more than 200 years. Bi-weekly and monthly paychecks - along with the materials needed, like glass, plastic, or metal to make the things people buy – dictate the price tags shining on new refrigerators, sofas, houses, and bikes. (Along with the ole supply and demand theory, but I’ll save that topic for another time.)

So what’s the problem? American businesses are having trouble competing against foreign businesses, it’s that simple.

So when you hear Obama or McCain talking about giving American businesses tax breaks, it’s because they’re trying to help American companies compete against Chinese or Indian business. But every time they do, every time they give businesses tax breaks and forget to increase wages, each candidate indirectly supports lowering American wages. But if they don’t, American companies will continue to loose their competitive edge, unemployment will drastically increase and monthly grocery bills will jump higher than they are today. Why else do you think prices are increasing?

(And no it’s not just the price of oil. Sorry anti-war folks, oil isn’t the answer for everything. The world is more complex than you think.)

So have Americans completely lost faith in politicians or are people losing faith in how we do business?

Maybe Americans are beginning to see the writing on the wall and their tired of being taken advantage of. Maybe Americans are asking Obama and McCain to create a new way of doing business. Maybe voters are asking each candidate to use their power as one of the world leaders and create something new.

It’s too bad Obama and McCain aren’t listening.