Titanic debt in the industry

Jan. 1, 2020
When the Titanic was sinking, the ship's band played on like there was no tomorrow. And for half of those on board that was the case. Turns out that the serene music was a poor substitute for the lack of adequate lifeboats.
Titanic Congress
When the Titanic was sinking, the ship's band played on like there was no tomorrow. And for half of those on board that was the case. Turns out that the serene music was a poor substitute for the lack of adequate lifeboats.

Well, welcome aboard. As hundreds of thousands of people are losing their jobs, their houses, their health care and their dignity, Congress quietly gave each of its members a $4,100 raise. No surprise there. Congress has taken care of itself just as it has taken care of its wealthy hobnobbers by practicing trickle-down economics for the last three decades. The thinking went that if we let our government take care of the rich, they'll create jobs and prosperity for those not as fortunate. In fact, the opposite is true, according to Tax Notes columnist David Cay Johnston. In a recent Mother Jones article, he said, "While incomes at the very top have soared to levels beyond imagining even a generation ago, the average inflation-adjusted income of the bottom 90 percent of earners was lower in 2006 than it was back in 1973. And since 2000, the median income of all Americans has actually slipped, proof that tax cuts for the rich do not create general prosperity."

Moreover, Johnston says Americans do not have enough money to live on without going into debt. Worse, I think, is that our financial system not only encourages debt but is designed to keep us in debt. If you doubt that for a second, take a few minutes to research a couple credit card practices –– interchange fees and double-cycle billing.

Anyway, our answer in rebuilding our economy is to free up more money to lend. Seems to me like that just might be starting the same cycle over again. There's only one way to thwart that: consumers need to learn that they can buy only what they can afford. To a large extent, the economic remedy is called layaway.

Just as important as creating responsible spending behavior is getting people back to work. And I'm not talking just about those out of work but those who are working in dead-end jobs with meager wages and benefits that don't cover their basic needs.

How do we achieve that? We need to build America into the manufacturing leader it once was. In essence, we are going to have to reverse much of the last 30 years. Many would argue that we are now in a global economy and any trade behavior to the contrary would constitute isolationism. Working toward regaining the export title is the farthest thing from isolationism. Rather, it would put us in control of our destiny once again.

If we don't start to reclaim our manufacturing leadership, more Americans will slide into poverty and won't even be able to borrow money to buy products no matter if they are made here or someplace else. By not rebuilding our manufacturing base, we are forsaking our own people so that other countries can build their middle classes. Why do we want to do that? From a manufacturer's standpoint, maybe it doesn't matter who's buying products as long as someone somewhere is buying, but that kind of thinking will sink America slowly as the band plays on.

Larry Silvey is a 25-year veteran of the automotive aftermarket.