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The Overcoat Business The Overcoat Business
by Jan Sand
2008-01-31 08:55:32
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There is an old story about two guys living on the edge of poverty. Whenever one was in deep financial problems he sold his overcoat to the other, thus tiding himself over a very bad spot. There was only one overcoat and it went through time being sold back and forth as fortunes wavered between the two guys. One day, as one of them was in the process of selling the precious coat to the other a stranger approached and offered to up the price a bit to obtain the coat. Immediately the two guys turned down the higher offer and the stranger asked why since his price was better. "You don't understand," one of the guys replied. "If we don't have the overcoat," he replied, "how will we make our living?"

Money is strange stuff. No doubt it started because social life grew with a dependence on trade. Cows, pots, bolts of cloth have real value and are important in maintaining a decent life. But if each of us had to keep, in his household, cloth and cows and pots for trade, our lives would doubtlessly be much more complicated and difficult. A cow in the living room would have to be diapered and pampered and in a love fest might even try to climb into bed with you like an over-sized spaniel. And it might become annoyed if you watch the wrong TV programs sponsored by McDonald's.

So, to make things easier, humans invented metal money. Coins were easier to handle unless you lived on the island of Yap where a twelve-foot diameter stone coin would make even a cow look convenient. Metals were, of course, inherently valuable but gradually the coins took on a symbolic value which transferred easily to paper that only claimed they were valuable. Convincingly, it seems, at least for a while. The Germans went through a period of revelation between the two World Wars when they stared deeply at their paper money and found disbelief growing at a furious rate. Something of the same sort of monetary doubt seems to be hovering about the dollar these days in euro areas. This is especially annoying when you have one pocket full of dollars and another full of paper hankies and you have to think twice which pocket to grab for when you feel a sneeze coming on.

Faith has always been a problem as is well know by Catholics with sex problems and investors in dubious financial creations since both areas often require belief in systems with proposals that are difficult or impossible to firmly substantiate. And, in both cases, of course, the rewards offered are frequently so preposterous that doubts steam out like vapors from hell.

Financial advisors, economists, theologians, philosophers, and scat singers emit vocal constructions that can be entertaining and have the endearing and peculiar quality to seem to make some sort of foggy sense in a jazzy sort of way and usually, with the exception of scat singers, can get you into all sorts of very uncomfortable trouble when they bump up against reality. The USA is starting to bump repeatedly lately in several directions and it might have some relationship to the overcoat business.

For the bulk of the twentieth century the USA was a powerhouse production machine. Thomas Edison and Henry Ford and others produced a flow of innovative production methods and consumer goods that was the envy of the world in the early decades and the major motor companies met the challenges of WWII by quickly turning out much of the tools and goods necessary for winning the war. At the end of the war the USA was left with much of its capital machinery intact while the war had, to a great extent, destroyed the factories of Europe. This left US businesses in a position of huge advantage for decades after the war ended and they took advantage of it to create markets throughout the world. But this success carried with it an inherent problem. The residual production machinery carried a reluctance for renewal while those countries with a destroyed capital economy were forced to start from scratch and when they rebuilt it was with machinery far superior to the old machines upon which the USA depended. The steel industry in the USA was especially hard hit by this problem.

But it was the revolutionary introduction of the computer into the economy that was the economic virus that vitally destroyed a good deal of the old economy by making many of the vital skills transportable to countries where cheap labor enticed capital into losing its market base. Humans everywhere regardless of nationally are equally intelligent and skilled but the wage rates from country to country are radically different. Corporations flocked to the procedure of using cheap labor to produce goods that they could sell to their home markets at low prices without considering that by not paying their home markets the wages that would enable the markets to prosper they were destroying the very basis of their markets.

In the USA credit companies suckered the populace to use credit capabilities at outrageous usurious interest rates which enriched the legal scammers but the procedure was inherently flawed because it destroyed the financial capability on which it was based. The populace used this credit to offset the loss of jobs and low wages which were the result of the off shoring of production and the greed of the corporation executives who refused to share their new riches with the populace.

So the loss of production jobs sent skilled engineers and other vital workers into massage parlors, bartending, hamburger flipping and other low wage activities. These low wages are unable to sustain a market impoverished by the good jobs scampering off to low wage countries.

And the country is now in the business of selling each other overcoats.

    
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