The Betrayal of the American Worker

The american working class has been betrayed again by the Federal Reserve Board and the current administration. The FED has been raising interest rates for the past year solely to support the american dollar's exchange rate. They have been telling the public that it is because of an incipient inflation. This is a patent lie which should be obvious to anyone who knows the slightest bit about economics. The FED did this in 1980-1983 in order to stop an inflation which was serious at that time. How did the people at the FED know that the economy was overheating then? It was easy. Interest rates were sky high reflecting a great demand for the money needed to purchase the new equipment and support the increased consumer spending characteristic of an inflation. Interest rates at that time were in the 8 percent range. They were in the 1-2 percent range when the FED started the current interest rate increases. They were that low for a reason. The U.S. has been in recession for quite some time due primarily to poor government policies over the past 20 years, including previous and persistent fiddling with the exchange rate. First for some history.
The exchange rate actually increased in the 1980-1983 period just at the time that large trade deficits indicated it should be decreasing. The rich were overjoyed and the government did nothing for 3 years to correct it. The result was a further increase in america's trade deficit and a downsizing of american (stateside) production which has continued to this day. Globalization hasn't hurt the interests of the working classes as much as this exchange rate tinkering.
So why is the government doing this? Just so that the rich can maintain their purchasing power. During the past 45 years inflation in the U.S. has decreased the dollar's purchasing power stateside. But the rich wouldn't allow this inflation to affect it's purchasing power over foreign-made goods. So they kept the exchange rate high even though foreign trade deficits indicated that it should be lowered. That's the reason production has moved overseas. But the government pretends that it is working in the interest of all the people. The media have helped to spread the myth that inflation hurts the poor most of all. What a joke that is on the public. Inflation is the result of more production and employment, and more money in the hands of the workers. Yes, prices go up as well. They go up for a very good reason. The working classes have more money to spend!
By continuing the "tight money" policy implemented by interest rate increases the FED will most probably "save the dollar". It will also without doubt cause continued (and unsustainable)american trade deficits and the resulting asset transfers to foreigners. It will also prolong the recession in the U.S. and stifle any business recovery or expansion (that's what interest rate increases are suppose to do.) The american worker's large wage differentials will continue to cause jobs to leave the country. And the greatest insult of all is another great myth spread by the rich in america, that american workers have only themselves to blame when they become unemployed. They have refused to train themselves properly or to retrain themselves in different high-tech careers. The sad truth is that the U.S. government has been betraying its working classes for the benefit of the rich mainly because the rich have the money and money keeps them in office. The U.S. is no longer a democracy, if ever it was one. The government is no longer one "of the people, for the people, and by the people". It is now a government "of the people, by the rich,for the rich". The government passes laws that are meant to control the people(working folks), which the rich believe should not apply to themselves. Any problems arising from their breaking of these laws are resolved legally by tricky high-paid lawyers. Other laws are simply designed to directly benefit the rich. David Cay Johnston, in his book Perfectly Legal explains many of the ways these gifts to the rich have been done legally. The congress has passed laws that have made it legal for the rich to exploit the american working class. NAFTA, CAFTA, tariff "reform", legal immigration, and globalization were all designed to teach the american worker a lesson, and the lesson was "Don't keep demanding a bigger slice of the pie". This lesson has been a good one for the american worker. He knows that now , if he wants to have a job, he must work at an "international" wage level. And the trade unions that past reformers worked so hard to create have been crippled.
So it is now time for the government to end this "lesson". Americans cannot survive on the $2-3 per hour "international" wages necessary for them to compete in a "global" economy. Government policy must change to reestablish high wages for these workers who are really the bulk of the middle class. The establishment of international unions and international minimum wages would go a long way to accomplish this. If something isn't done quickly the american working classes will fail, and the country will fail along with them.