Forget The 1 Percent

by J.D. Alt, New Economic Perspectives

All this talk about the 99% versus the 1%? I say the easiest-and likely the most useful-thing to do is just forget the 1%. Write them off. Let them have their gated communities, their mega-yachts, their island retreats and off-shore bank accounts. What do we need them for?

For one thing, we DON’T need their money. Even if we could get it-which we can’t because they steadfastly refuse to use it for anything other than casino gambling in their private and secretive financial networks. We wonder why we have a “jobless recovery”? Does it have anything to do with the fact that such a large percentage of our “capital” has, for all practical purposes, been removed from the economy?

Even when the 1% decides to invest some of their Dollars to manufacture or build something, they rarely decide to manufacture or build anything we really need-only things we really don’t need. Like strip-mines in the Bristol Bay salmon fishery, or pipe-lines across Nebraska’s freshwater aquifers, or rocket-planes for space-tourism. Thanks, but we really don’t need-or want-any of it. We’d much rather have fresh wild salmon (rather than the artificially colored hatchery-stuff) than more copper and gold, fresh water instead of tar-sands oil, and the good-old week-at-the-beach is just fine for a vacation.

President Obama adds to our confusion by claiming we need to tax a bunch of the 1%’s Dollars in order to pay for a minimal laundry list of hodge-podge programs to train unemployed people to do jobs that don’t exist-and which the 1%, whether you tax them or not, have no intention of creating-ever. Why doesn’t the President just forget the 1% and start investing Sovereign Dollars (not tax Dollars, mind you) in the lower and middle economic strata he claims to care so much about? The 99% can have its own life-and a very good one to boot-if we’d just ignore the 1% and get on with the job of paying ourselves to build the things we really need.

Here’s an example: It turns out the United States-which has the largest and most complex electric power network in the world, and which is completely and utterly dependent upon electricity for its daily survival-does not have the capability of manufacturing the single most crucial component of its electrical grid: the TRANSFORMER. To be exact, we can make little transformers, but the really big ones that are necessary to push electric current across long distances (which our electric grid is totally dependent on) are somehow beyond our ken. Or, to be more accurate, the 1% have no interest in building the plants and hiring and training the workers to manufacture the very large-size transformers.

They (the 1%) apparently reason that they don’t need to go to that trouble because in our globalized economy there’s somebody else who can build the really big transformers. It turns out that somebody is South Korea. So when, recently, Pennsylvania badly needed a new very-large transformer they placed an order with the Koreans, who promptly began building it. Two years later, the 400,000 pound item was put on a ship and transported for 26 days at sea to the port of Newark, New Jersey, where it was loaded by crane onto a railcar bound for Pennsylvania. (“Heart of U.S. Grid Difficult to Replace“, W.S.J. March 4, 2014.)

This little tale is made even more interesting by the fact that these very-large transformers-usually situated inside a compound protected by chain-link fencing-are easily destroyed with a few rounds of fire from a semi-automatic assault rifle. Thankfully, semi-automatic assault rifles are difficult to come by in the U.S., otherwise there might be cause for concern. The seventeen transformers recently shot to death in California (we can’t explain how this actually happened, since the NRA is only marginally active on the West Coast) are a cautionary tale: If this were repeated on just a little bit larger scale, the Department of Homeland Security has determined, our entire electric grid could be down for months-or even longer. (Come on South Korea, hurry it up…. We’re waiting!)

So my example is this: Why doesn’t President Obama propose that since the 1% have no interest in doing it, the U.S. sovereign government build a plant to manufacture very-large transformers, hire engineers to train unemployed people to do the labor, pay those unemployed trainees for making the effort to learn how to make a giant-sized transformer, then hire those newly trained workers to run the manufacturing process? We could build a backup supply of these critical electric grid components so that in the (increasingly likely) event some crazy, anti-government sociopath seizes the opportunity to turn out America’s lights, we could turn them back on in fairly short order.

That seems sensible. And it’s total nonsense to imagine that we have to depend on using ANY of the 1%’s gargantuan stash of Dollars to do it. Like I said, just totally forget them. Let them play their Monopoly game while we get on with the task of building the world we want to live in.