This Thanksgiving weekend I did something I'm a bit embarrassed to admit: I caught up on all the business magazines and WSJs sitting in my "to read" pile. It's Sunday and the workweek begins tomorrow, but I wanted to make this comment based on a consistent underlying theme I found weaving through much of what I read.
The theme: until Americans become fiscally responsible, we will continue to sink economically.
Yesterday, the WSJ explained that as far as the subprime mess, we ain't seen nothing yet. Turns out that all the headline grabbing foreclosures have NOT been the result of the ramping up of adjustable rates but, rather, first year foreclosures by those would couldn't make the bills with the ORIGINAL, subprime rate which enticed them into the purchase in the first place. In the first part of next year, when the rates jump on maturing adjustable mortgages, it will get much uglier.
As the credit market continues to tighten, we are seeing it starting to impact the commercial real estate market. Meanwhile, important heads are rolling on Wall Street and we are days or weeks away from the once inconceivable $100 oil barrel...as both U.S. and foreign car dealers continue to push mega-SUVs on an increasingly fiscally reckless American public. Economic indicators suggested a bleak holiday sales season, but Black Friday saw unfazed Americans whipping out the plastic and the credit purchases will continue on Monday when the big Web retailers pull out the stops and discount their own stuff.
The problem is this: the people buying these SUVs and charging up their credit cards for Christmas are, for the most part, the same across-the-board Americans who (at best) irresponsibly or (at worst) fraudulently provided the so-called "stated income" which qualified them (with the help of unscrupulous brokers) for the mortgages which are now triggering this somewhat slo-mo version of fiscal Armageddon. This perpetually-abused Canadian dollar is eye-level with its U.S. counterpart and the Euro towers condescendingly down upon the once-almighty greenback. U.S. supermodels are demanding contract renewals in Euros, not dollars, and it takes a sub-prime U.S. mortgage to spend a week on the French Riviera.
As America's might languishes, business -- global business -- explodes around the world, which has the very embraced economic efficiencies the U.S. has preached since the WWII...and forgotten since September 11th.
Ask yourself these questions:
1-What does the U.S. economy look like if we subtract the people employed by the military, its contractors, and the Homeland Security "army" resulting from September 11th?
2- Optimistically assuming that the U.S. can win this war and reduce the terrorist threat to America, how will the U.S. private sector absorb these good people once this war ends and, hopefully, once the terrorist threat is minimized?
3- After years of the government hitting U.S. H-1B employers with massive "U.S. Training Fees" to subsidize the training of U.S. students, why are U.S. colleges STILL not graduating even a fraction of the technology, science, and allied health graduates U.S. employers need?
Right now, the answer is simple: because as a nation we are talking globally but operating xenophobically, and it is really not working very well at all. In addition to the staggering cost of this war and its aftermath, the integration of this massive government workforce into private sector can ONLY happen in a growth-driven economy where Americans understand that if we do not embrace global economic truths, we will be left out of the benefits of the global economy. And the sheer idiocy of the notion that U.S. kids could effectively be bribed into careers which are of absolutely no interest to them is now a historically proven fact.
One simple act of Congress can begin the changes necessary to put us back on track. Bipartisan legislation eliminating bogus training fees and giving the U.S. IT, healthcare, and pharmaceutical industries the number of H-1B visa they need to staff, build, and grow -- with a valid H alternative for registered nurses -- would be signed by President Bush and would trigger:
1- the end of the exodus U.S. companies like Microsoft were forced to begin earlier this year when the proposed immigration reform failed.
2- the ability for U.S. employers who rely upon foreign talent to fill job vacancies to plan future plants, R&D, and growth in the U.S., just as they did when the temporary increase of H-1B numbers, leading to steady U.S. job growth for AMERICANS;
3- a proactive response by U.S. healthcare providers to establish excellence in geriatric care for the legions of Baby Boomers headed into their Golden Years.
4- American's rightful restoration as an industrial innovator and leader properly able to care for the health of its population.
Fat chance anything like this will happen before the election, and even then, in this "blame the immigrants" climate which fails to distinguish illegal aliens from desperately needed skilled foreign workers, It won't be an easy thing to do.
But at least there will be some real deals on Hummers, right?