Unemployment, Prison, Mortality, Entrepreneurship and Economic Development

  • William Laraque, Managing Director at US-International Trade Services

  • 06.11.2015 00:00 am
  • undisclosed

The Reverend Jesse Jackson calls prison the exhaust of a failed economic engine. The U.S. has more people in prison per capita than any other country on earth. There is a disproportionate number of black youth in the U.S. prison system. The distressing news has arrived that the mortality rate among white, non-college-educated men and women in the rural suburbs of theU.S., who are 45-54 years of age, is rising at an alarming rate. The chief culprit is the usual suspect; unemployment. The industrial jobs have left and the prospects for non-college educated persons of a certain age getting a job are dim. The result is something approachingEurope after Goethe wrote Werther. Ennui is deadly.

The misnamed “Sharing Economy” poses yet another issue. It is not solely a philosophical or ideological issue. It is a psychological issue. Let me digress into literature for a moment to explain. Anna Karenina is held by many to be the world’s greatest novel. In the novel, Tolstoy explains convincingly the psychology of why Anna committed suicide. The novel explains the cultural milieu, the social context motivating this desperate act. So does Goethe’s Werther. They both rank among the finest examples of literature in the world. Goethe also wrote that God is in the details, the devil in the extremities. Pope Francis just visited the U.S. He said that the church must go to the extremities, where the poor and the despairing are. The church, he said, cannot stay on the sidelines of the fight against injustice. Many economists, from Sen, to Stiglitz, to El-Erian have said that economic inequality is unjust.

One of the great works of fiction today is the so-called “sharing economy.” It is also called the “Uber-like economy.” These terms are used to describe the abject failure of the so-called free enterprise system which is anything but free. The manner in which capital has been distributed in the “free-enterprise system” has been admittedly skewed to benefit the wealthy and the multinational corporation. This is not according to me. It is according to the World Economic Forum. This inequality and events like the Great Recession have created a natural psychological distrust in banks that are “too big to fail’ by entrepreneurs who are “too small to matter.” As a result, the more dynamic and resourceful entrepreneur has resorted to Uber, AirBnb and other means of starting their own enterprises. This is fine for cities and city residents. It is not fine for those who live in rural areas and whose jobs have just been terminated by the remnants of an industrial society that no longer exists.

The solution is to engage in a massive re-education of these folks in international trade. 28.5% of the new businesses created in the U.S. last year were created by new immigrants to the U.S.The only area which can employ all of the new immigrants to the U.S. and Europe is what the MGI report identifies as what will be $85 trillion in trade flows by 2025.

Chrystia Freeland, the newly appointed International Trade Cabinet Minister of Canada has written that free trade is the key to middle class prosperity. She speaks 3 languages. The new immigrant speaks at least one foreign language. The problem, as I have written on numerous occasions is that in the U.S. neither trade nor enterprise, are free. They come at a price. The price is capital and education. Capital can be provided to start-ups by credit unions. The start-ups international business can be expanded through pre-export financing and export credit insurance as Stephen Pitt-walker and I explain in our manual. The mom-and-pops can be transformed into micromultinationals and then multinationals. We show you how!

Please feel free to ask any questions.  

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