Weapons of Mass Exploitation (WMEs) are devices used by wealthy corporations to hoodwink the rest of us into believing that our troubled economy is our own fault as consumers, and that they have the solution to the resulting problems. In reality, it is the greed of those who have benefitted from supply side, trickle-down economics, the very ones who point an accusing finger at us. They have lowered wages and outsourced well-paying jobs in to increase the value of their corporations and shareholder returns.
What WMEs really do is create debt, personal and governmental debt, and cause the
problems that result to pile up. Supply of products and Demand for products are like two wings of an airplane. They must be equally strong, otherwise the economy will crash.
A balanced economy looks like this: supply = demand
The main source of supply is productivity while the main source of demand is wages paid to workers who produce the goods. In the past, balance was maintained by tying wages to productivity in the well founded belief that a deserved increase in wages would allow workers to buy the goods they produce. This connection between supply and demand allowed the two “wings” to grow together and maintain balance.
In the mid-1970s, businesses joined forces, making them able to wield greater power. With this combined power, they cut the traditional link that had tied wages to production.
Because there is always improved technology and increase in investment, productivity increases every year. Unless wages continue to grow along with greater productivity, the economy falters. Business’s solution to this inequity has been to encourage consumers to borrow ever more, first with credit cards, then with borrowing against their major investment, their homes. This was business’s way of balancing demand with supply. It was the corporate solution, a “Weapon of Mass Exploitation,” or a WME.
An unbalanced economy since the mid 1970s has looked like this: supply = demand + consumer debt (credit card and home equity loans)
A second effect of inequity between supply and demand is worker layoffs, since manufacturers can’t sell all they produce with full employment. These layoffs in turn result in even more layoffs since employers sell from their overstock, and there are fewer customers who can afford their products.
The author of Weapons of Mass Exploitation, Ravi Batra, writing in Truthout, says that the only cause of unemployment in an advanced economy like the U.S. economy is a rise in the gap between what employees produce and what their employer pays them for their work.
This gap results in problems, not only for employers and employees but for politicians as well. The political solution to the heavier supply than demand is for government to issue low-interest loans through the FED, thus making government a partner with consumers in an attempt to balance badly trailing demand with supply.
The equation continues to develop: What started as equal supply and demand has now become: supply = demand + credit card debt + home equity debt + government debt/deficit.
Unable to sustain its debt, the U.S. government borrowed from other countries, and in the fall of 2011 the U.S. threatens to renege on repayment of loans it has already received. Meanwhile “THE ECONOMY” meaning “THE WALL STREET ECONOMY,” thrives. Wages have lagged behind supply since 1981, with the result that corporations and their executives have grown steadily richer (on wages not paid) while middle class and poorer citizens are deprived of necessities to keep the airplane of the crippled economy from a second recession, of possibly 1930s depression proportions.