Christmas...almost

Tis the day (morning) before Christmas and all through the house, not a creature is stirring, not even a mouse. That’s true; I checked the traps and couldn’t find a mouse anywhere. At this early hour I am the only creature stirring, and that’s a good thing.

I was reading the mail first thing this morning and I came across another e-mail from The Daily Reckoning. I subscribed to their mail offering for some obscure reason. Probably because I enjoy their writing style. The email always contains a pitch to buy their book (I haven’t) and some short and pithy comments on life in general. They are also “Gold bugs”; people who trade in gold and think that gold will rise in value to over $2,000. (It currently trades just below $500 and they might be right.) Included in this mornings message was the following…

“…Globalization meant that his employer could go to someone in Nicaragua or China and get an employee in 2005 at 1905 prices! Factories and cheap machines worked just as well on the banks of the Wazu as they did on the banks of the Hudson. And now the poor American drudge has to struggle to make any headway; his real hourly wages haven't gone up much for 30 years. That doesn't mean he's worse off. He benefits from the lower prices globalization brings. And he goes further into debt to be able to buy even more.

Meanwhile, his old employer is doing fine. The company saves on labor costs. It may even be one of these 'platform' companies - outsourcing its factory work and labor costs overseas. Typically, a company has to pay its employees...and gets the money back when the workers buy things. But now the workers buy things with cash the employers never paid out. Instead, workers buy with credit...and the employer's profit goes up (because he has no offsetting labor cost).

It is almost too wonderful... The employee gets a better standard of living without actually earning more money...and the employer gets higher profits without having to make anything.

Have Americans discovered some new way to wealth? Without hard work...or hard money...or hard savings? Or are they just enjoying an illusion of late empire...before the cheap energy runs out...and the barbarians break down the gates?”