Once upon a time, the shapers of our destiny envisioned a global economy, worldwide prosperity and peace based on capitalism and unfettered trade.
 
The plan was hammered out at Breton Woods in the USA as WWII was coming to an end.  The objective was to set up an international economic system that would prevent another economic and political collapse and another military conflict.
 
It was a bright new world order that they saw coming over the horizon.  The United States, the major player left standing after the war, would set the pace and show the way.
 
In order for the U.S. to do this, the movers and shakers had to come up with a plan to employ millions of returning troops being mustered out, to provide prosperity, and to avoid sinking back into the Great Depression that ended decisively only with the onset of WWII.
 
The problem was twofold: how to generate the demand that would spawn the business and industry that would create all of those jobs; how to finance the consumption that would have to result in order to support the economy.
 
The solution to the demand problem was to turn luxury into massive convenience on a continuous basis.  The generation coming back from the war was accustomed to the frugal “waste not – want not” philosophy and downright deprivation of the great depression.  This generation was not accustomed to luxuries, and would certainly not be comfortable with the “Consumer way of life" and the wasteful "throw away" culture that is its handmaiden.  The engine of demand, therefore, was to be “convenience” justified by efficiency. 
 
Convenience became the watchword of the post-war economy.  Things (disposable diapers, automatic washing machines, TV, a car) that would have been unjustified luxuries in the 1930s, if they were available at all, were now justified as convenient.
  
The solution to the finance problem was credit.  The pre-WWII generations generally lived and managed on a pay-as-you-go basis.  They actually saved and then bought.  That method of financing the post-war convenience driven economy of mass consumption simply wouldn’t fly.  Buying now and paying later was the new order-of-the-day. 

Credit, then, became the latest confidence game in town.  The confidence that future earnings would be there to pay back money borrowed today was the key to its success.  The re-education of the population to instill that confidence began in earnest.
 
Time passed.  The American middle class emerged following WWII, and prospered as the American Dream became the poster child for the Brave New World order.
 
As the American pace of life quickened, those conveniences gradually became “necessities”, as the stay-at-home mom gave way to the demands of the two wage earner family required to support those necessities (color TV, a second car, bigger house) and to pay the burgeoning credit debt.
 
The economic miracle might have flamed out there.  Once both dad and mom had to work full-time to support the family and the “Consumer way of life”, the family unit's earning power was pretty well maxed out.  Child labor was greatly restricted in modern day U.S. of A., and the family pet couldn’t earn enough to help.
 
New and novel borrowing was the answer.  For example, credit cards came on the scene, and as we all know have been pushed with great gusto.  We as individuals were encouraged to borrow further and further into our own future, and the government did the same. 
 
The results, absolutely undreamed of just after WWII, are all but engulfing us today. On the individual level we see interest only mortgages, borrowing on equity to pay off credit card debt, and other outlandish and self defeating behavior as we strain to sustain this economic model. 
 
This race to borrow ever further into the future conjures up the vision of a busboy carrying a stack of plates (debt) through the kitchen.  As he passes other workers they pile more and more plates on the stack.  The stack has been pitching forward as it grows, and the busboy has to run faster and faster to try to get under the stack before it topples forward out of control and crashes and he has to pay for it (bankruptcy is no longer an option for getting back on his feet). The busboy can only hope he doesn't stumble over some unanticipated obstacle (medical emergency comes to mind) even as the load grows heavier and heavier.  Many individuals are carrying too many plates and can’t run any faster. 
 
And the Federal government is moving in that same direction.  At the national level, the Federal deficit has gone absolutely bonkers, and through it we are borrowing shamelessly on future generations.  We owe our children’s soul to the Communist Chinese company store.
 
Around 1980 the fairy tale began to feel the ominous thumps and bumps of the shoals and reefs of reality.  It became apparent that the achievement of the American Dream of a broad-based prosperity here in America was an aberration, not to be replicated worldwide.  And it is all too apparent that it cannot be sustained in America, as Globalization takes effect.
 
That caused the shapers of our destiny to ponder an alternative...
 
Recall that, following the Second World War, the victors turned to homogenizing a global economy.  The noble theory: if everyone was equal, we would war no more.
 
The plan was implemented, and seemed to be right on track for several decades.  The American middle class success story, marketed very effectively for half a century, showed the way and raised expectations and living standards in much of the world.
 
There was one small drawback.  America’s 5 percent of the world’s population consumes around 35 percent of Mother Earth’s resources.  A simple equation shows that, to reach parity with America, the other 95 percent of the Earth’s population is entitled to 665 percent of Mother Earth’s resources. [5:35::95:X transformed 5X=35*95; X=35*95/5 = 665] Mother Earth might just balk at that.
 
And the environmental-demographic economic equation yields a similar result.  We are seeing the effects of that already with the global warming warning.  Mother Earth will take vengeance on us long before China, India and the rest of humanity are using their fair share of the environment as a sewer.
 
The movers and shakers had to come up with Plan B: equalize America’s middle class with the rest of the world by reducing its living standards, rather than bring the rest of the world up to its standards.  This would be the hard right turn toward globalized serfdom.  Thus would the objective of equality for the global population be realized.
 
To be continued …
 
 
Related articles:
The Confidence Game – Part 1
The Confidence Game – Part 2