By J. Yanqui Zaza
|President Elect Donald Trump|
Winners or losers emerge after every competition be it a game, war or election. Some winners or losers might not have supported the victor during the election. Also winners might not have similar views, rather different interest. So, although big businesses, on the one hand, and ordinary white Americans, on the other hand, are rejoicing about President-elect Donald Trump’s historic election, big businesses will not cease to exploit them (i.e., for example, Wells Fargo Bank’s 5,200 customers).
Big business, without any sign of giving support to Mr. Trump during the elections, will find it easier to pressure the billionaire in order to increase profits by cheating white Americans. Ironically, white Americans gave the U.S. presidency to Mr. Trump because he promised to ease Americans’ economic pains, including the promise to provide good-paying jobs in the U.S. (Nelson Schwartz, NY Times, 11/13/16). However, economic factors that encouraged manufacturers to relocate from New York State to other states, including North Carolina decades ago might pose challenges to Mr. Trump’s promise.
Mr. Trump is surrounding himself with hawkish and ultra rightwing conservatives such as Mr. John Bolton, Renince Priebus, Stephen, Rudolph Giuliani, etc., which indicates that he might deport aliens, ban Muslims from the U.S., prosecute non-white Americans, etc. The question is can he increase good-paying jobs in the U.S., which might help to reduce bigotry, racism, etc.? President Barack Obama did search for an answer to bring manufacturers back to America. So, he did ask the late chief executive and co-founder of Apple, Inc., Mr. Steve Job how America could entice investors to manufacture in America. The short answer was manufacturers don’t prefer the U.S. because it is expensive to manufacture merchandise and provide services in the U.S.
Why are the costs of manufacturing goods and services expensive in the U.S.? Or why are the prices of U.S. exports high, therefore less attractive? Here are few reasons: the U.S. government, unlike the Japanese and German governments, has limited role in the economy; therefore, has limited leverage over big businesses; the next three reasons are: (1) speculation/gambling cost; (2) excessive salaries and bonuses; and (3) high costs of living (housing cost, tuitions, healthcare, etc.) which flow into wages. Speculation/gambling cost: In 2005, twenty-five (25) United States hedge fund managers received $9 billion as compensation; in 2011, forty (40) hedge fund managers received $13.2 billion; and twenty-five (25) hedge fund managers received 11.62 billion in 2014. (Institutional Investors’ Magazine). Directly or indirectly, U.S. manufacturers include these compensations in determining the selling prices of goods and services. Note, a selling price is comprised of cost plus a profit margin.
Excessive salaries: Other billions of dollars that increase prices of exports are fees paid to Wall Street industry (Goldman Sacks, J.P. Morgan, etc.) by companies. These fees represent the cost of borrowing, merging fees, advisory fees, trading stocks and bonds fees. But the fees have exploded, primarily, all because of corruption. For example, unwilling to inform their clients on fees versus benefits, fifty percent (50%) of the entire U.S. stock market is traded through the “Dark Pool” of Goldman Sacks, even though the company owns only two (2%) of the U.S. stock market, according to Schwall, Flash Boys by Michael Lewis.
High costs of living (housing cost, tuitions, healthcare, etc.): Costs that increase prices of exports are not limited to excessive compensations paid to hedge funds managers, Wall Street CEOs, etc. Employees’ wages, which are comprised of housing cost, school tuitions, healthcare costs, etc., are expensive as compared to the costs of living in China. Although, China is one of the highest home ownership in the world, Chinese homeowners pay minimal interest to the banks, unlike the homeowners in America. For example, a house owner in the U.S. will end up paying $300,000 for a house that was built at a cost of $150,000, the difference going to the financial industries.
Education in America is expensive. For example, a private high school located in New Jersey, U.S. is charging $36,900 for 2016 academic year. Also, public universities in the U.S., on the average, ask for $18,943 per year, but all public universities in Germany are free. Additionally, professional educations such as medicine, law, etc. in America, do limit the number graduate student in order to protect the professional fees, according to Mr. Dennis Cauchon. (USA Today, 3/2/2005). Remember, due to the economic concept of “demand and supply,” meaning when products (i.e., physicians) are in surplus, fees will become lower because patients, not the physicians, will be in control in determining the fees, for example.
If you review the medical industry in Cuba you might understand the concept of “Demand and Supply.” By making education free, Cuba has and continues to produce surplus physicians, thereby making healthcare services less expensive. For example, the country “…has a robust biotechnology industry…” that has generated an innovative vaccine that is sold for $100.00 in Cuba, but cost $9,000 in the U.S. The vaccine called Cimavax does not prevent cancer, but halts its growth, according to Sally H. Jacobs. (NY Times, 11/15/2016).
If it is okay for investors in education to become billionaires at the expense of society, other industries such as the tire industry, insurance industry, financing industry have and will continue to impede every effort by the government to invest in mass transport. This is because an efficient mass transport system would discourage many American citizens from buying vehicles in America, and of course reduce other related costs. So, you see, that as one industry uses the economic system to accumulate more wealth for a privileged few, other investors will fight to become billionaires at the expense of society.
Sooner than later, white Americans will realize that their economic pains are derived from a structural economic policies; and that President-elect Donald Trump’s promise to provide good-paying jobs in America was a campaign statement. Most importantly, big businesses will not do anything meaningful to reduce the constant rising of prices of goods and services, all because of greed.