After World War II the United States emerged as the undisputed victor
and the wealthiest nation on earth. The economies of all other countries
were either broke or in ruins. The United States was unscathed with its
industrial base totally intact and  equal in size to that of all the
nations of the world combined. American cities were untouched by the
devastation of the greatest war the world had ever known.
     Having been born in the Great Depression and then to grow up in the
post war years in the United States during those incredibly rich, halcyon
years was to be extremely fortunate as a member of one of the luckiest
generations in the nation’s  recorded history. It was a time which will
never again be repeated. That was  long ago and quite unlike  this day and
age. The extreme difference between then and now was once again brought  to
my attention a few days ago as I reflected on various economic forces then
and now..
      It was all brought into focus by the  purchase a single item in a
local store at a very good price. The label on the box indicated that the
product had been manufactured by a well known American company and  even
indicated the firm’s United States address. What caught my attention was
the price which was about half what I would have expected to pay. When I
opened the box I saw that the appliance had been manufactured in China
which explained the low price. In another instance I was displaying an item
I purchased through the mail to a friend and as I was describing its
uniqueness. “This is a marvelous precision instrument made in Germany,” I
pointed out. My friend looked at the device and said, “the small print on
the label indicates it was made in Taiwan.”  How times have changed.
     In recent years when visiting the United States mainland I have
noticed within the great shopping malls around the country that very few
items offered for sale today have been produced in America, the vast
majority being manufactured in Asia and elsewhere. And we all know why - it
is because of the low wages in Asia compared with those in the United
States, the absence of bureaucratic government regulations such as OSHA,
environmental, historic preservation, labor union demands, etc., all  of
which have increased the cost of doing business. Naturally these added
costs are passed on us, the consumers.  Many American entrepreneurs can no
longer afford to remain in the United States if they want to continue in
business. They move their facilities abroad to produce products at lower
cost, Americans lose their jobs at home,  the standard of living falls,
communities lose tax revenue. When this happens very often the first
government service to be cut is the allocation to education. Of all the
areas in government to cut spending, education should be the last place.
Without educated people trained to exist in the modern world, economies
will stagnate and decline. Look at Chuuk where education is the basic
problem of that economy.
     Columnist Lester C. Thurow  pointed out in the Asahi Evening News, “
No country without a revolution or a military defeat has ever experienced
such a sharp shift in the distribution of earnings as America has in the
last generation.”
    At no other time have median wages of American men fallen for more than
two decades while the per capita domestic product was increasing. The
median real wage has dropped from $34,048 in 1973 to $30, 407 in 1993.
Wages for men between the ages of 25 to 34 are down 25 percent while the
GDP increased by 29 percent during the same period. This decline in the
purchasing power of  income is happening at a time the cost of living has
been increasing.Thurow went on to point out that in today’s global economy
new production and distribution methods require a better educated labor
force. Since almost  anything can be made anywhere it is no wonder that
American manufacturers invest abroad where there is an abundant supply of
well educated, cheap labor.  You can pay an engineer in Thailand for six
months for what the same skilled American engineer earns in a month in the
U. S. The vast majority of jobs now being created in the United States
today are minimum wage, “Mac-jobs” with few fringe benefits.
     Most of us are aware of the long standing difficulties the U. S.
economy has experienced. Consider this - have you ever heard, or read any
one in the the United States Government recommend the following simple
solution to increasing investment and thereby producing more jobs? Amend
the U. S. Tax Code to permit all funds placed in a savings account to be
tax free. What will happen? Enormous amounts will flow in the banking
institutions with the result that the interest paid on such savings will
drop. Savers may lose several points on interest paid but will gain on
reduced taxes since no tax is due. The banks will soon be awash with money
and since they must re-lend these funds in order to earn back the interest
they have paid out to those with funds on deposit - plus their profit -
interest rates on borrowed money will drop because banks will rush to meet
the competition from each other. People will borrow money at competitive
low interest rates to purchase homes, automobiles, etc. That will place the
country on the road to real economic recovery. Have you ever heard an
economist in the U. S. government recommend that solution? I haven't.
There are several details that would have to be worked out in such a
program such as placing a strict limit on the amount of government bonds a
bank could purchase - otherwise that is where most of the funds on deposit
would go with the result that the federal government would be off on
another spending spree and the American people would be back where they
were. Of course such a revision in the tax structure will not help the
country's deficit in the short term but over the long term, because of the
economic stimulus created, it will. Trying to get U.S. Government
bureaucrats to understand this is harder than trying to pull teeth out of a
chicken.
      One of the principal reasons the United States has economic
difficulties today is because it has one of the lowest rates of savings in
the industrialized world. Indeed, to my knowledge the United States is the
only country in the world that is in the process of de-industrializing.

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