The news about CIT’s filing for bankruptcy protection should be another nail in the coffin of the global economy, but no one seems to be lining up at the funeral parlor. In fact, the news isn’t really all that bad, unless you take the time to read between the lines. The main point of the discussion is that CIT will be restructuring its debt so that the company can duck a few loans. The reports are leaving out a couple of the main reasons that companies like CIT have hit the wall – neoliberalism and a global market where labor, consumption, raw materials, management, and information are out of sync.
When companies go abroad, they are often seen as heroes by the host countries. They bring jobs, help build new roads and schools, and so forth. That’s what we’re told. In actuality, these large, international conglomerates set up (or purchase) sweat shops were it matters little who is doing the work – children, seniors, pregnant women – as long as the wages are cheap. Pollution, tax evasion, poor working conditions are all part of production process. The goods that are produced cheaper in the host countries are then shipped back to the US to be sold at the usual mega stores – Target, Wal-Mart, etc. We do see prices drop when this happens, but the problem is that the people here have a hard time buying cheap consumer goods – their jobs went overseas, but not their paychecks which just disappeared into thin air (sort of – in fact, it just means that those at the top don’t have to pay out as much). Those holding down the CEO offices can buy whatever they want, but without a supporting cast of working and middle class people, the thing implodes, and pretty soon you have companies like CIT filing for bankruptcy while Lear Jets sit unused in the private hangars, to be brought out as soon as everyone moves on to the next crisis.
For the past few decades there’s been a cry to support local businesses. It’s time to start heeding the call.