Posted 11:30 AM by Paul
B-Movie

A few night ago we watched a documentary about Gil Scott-Heron the black soul artist cited as the Father of Rap. The same claim has been made for artists as diverse as The Last Poets and Mohamed Ali. I don't care much for modern rap as it reminds me of a mixture of jive ass square dance and product placement. But Gil Scott-Heron was different, mixing jazz, soul and fluid poetry in a mellifluous voice. Just before Reagan took office he penned a song called B-Movie, in which he predicted a country run by an actor and which had in his memorable words moved from being " a producer to a consumer". At the time nobody took his pessimistic analysis seriously, but now it looks remarkably prescient.

Last week, buried in the financial pages of the broadsheets I noticed a small article reporting that the US trade gap had grown to an unprecedented $489 billion per annum. 20 years ago these figures would have been front-page news and the stock market would have taken a dive - but now it doesn't seem to worry anyone too much. At the same time the media is reporting an American boom, with growth rates last seen in the glory days of Eisenhower. Even during this period of growth unemployment remains stubbornly high, particularly in those places nobody wants to live in anymore like Michigan and Illinois. Experts refer to this as a "statistical recovery" or a "jobless boom". In the new global economy if the tide comes in, all boats no longer rise. The old certainties are gone forever.

The greatest country on Earth now consumes far more than it makes. Gil Scott Heron accurately predicted a phenomenon that escaped legions of economists. $14,000,000,000 (2.8%) of the gap can be accounted for by the growth in Chinese imports. In a show of commitment to global free trade, the Bush administration has reacted by slapping heavy import duties on products from the People's Capitalist Republic, focussing on brassieres and textiles. Political insiders tell me that this is about the 2004 Senate and Congress races in the Georgia and the Carolinas, where the undergarment and textile trades are very important. The Chinese have re-acted by slapping taxes on US products.

But perhaps this is a case of shutting the stable door once the horse has bolted because US consumers have gotten used to Third World products, which are no longer cheap and tacky but often inexpensive and high quality. On the other hand high prices of US products may deter the vanguard of the Chinese consumer class. They may well turn to other countries for their agricultural machinery and sports cars thus establishing a trend for the future. The early adopters ofetn set the tone for consumption for decades to come. Paradoxically many of the foreign imports whihc cause concern in Washington will carry quintessentially US brands. Some of these products will get past the tariff barriers by the old dodge of making the parts abroad and then assembling them in the US. However, many goods which carry US brands are now made thousands of miles away and some of them even in the land of the old enemy - Vietnam. Where Agent Orange and carpet-bombing failed, The Gap succeeded.

All this creates an interesting paradox for the political classes that have adhered to the new globalist orthodoxy. The export of jobs of Western companies is seen as an inevitable consequence of the drive for competitiveness. Over this side of the Atlantic there has been a great deal of noise about the loss of around 30,000 call centre jobs to India. In a masterstroke of marketing speak Tony Blair referred to this process as the "churning of jobs". So - it's official. Unemployment has ceased to exist. Instead your job has been churned. At what point it turns to butter and then to cheese is not clear. The UK labour market is now moving into a secondary stage of the globalisation of work. Most of the manufacturing jobs went years ago. In the whole Greater London area (pop. 8 million) more people work in the creative industries than manufacturing. We are now exporting employment in the service industries.

But every few years the politicians themselves are up for churning and they still need the votes of the recently churned of Michigan or South Wales. So, the political elites sell the process as an Act of God like earthquakes or pestilence. Anyone who even questions the wisdom of this global merry-go-round where companies shift jobs at the flip of a switch but leave the UK or US taxpayer to pick up the tab for the social consquences stands accused of " selling a false prospectus".

So, Bush's people are in a quandary. They cannot take measures to restrict the flow of jobs abroad as this would offend their allies on Wall Street but they still need to appeal to the patriotic voters of America. Hence, the tariffs on steel and bras and the recent blunt announcement that only countries that took part in the coalition to invade Iraq could bid for contracts in its re-construction. France, Germany and Russia may be indignant but all this plays well in Main Street USA. It also reveals them to be as motivated by self-interest as the US and the UK. Even if some of the $70 billion (much of this figure paid for by Iraqi loans secured against oil revenue) in re-construction contracts does filter back to the American Heartland it will not make a huge impact on employment in Duluth. Even so, the symbolism it perfect. Bush is seen as someone who is looking after the Middle American Meat and Potatos Guy of advertising legend.

On the macro-economic side the US can fund the deficit by increasing the money supply - or in English get out of debt by printing money. The only thing which could upset this state of affairs is if crude oil were ever denominated in Euros, in which case the US Treasury would not be able to dictate all of the rules. But this is a long way off. The last person to suggest the idea was a a mad bloke called Saddam Hussein, who is now residing in a small cell somewhere near Baghdad Airport. I don't think many leaders, despotic or democratic, will be suggesting this wheeze in the near future.

So, the jobs move South and East but Bush and Blair look secure.

In the long run, I wonder if the US can sustain this position. When I was a boy owning something American was a big deal. I remember when my elder brother came home with his first pair of Levis. They were great jeans, faded beautifully and lasted for years but they were more than just apparel. They were a symbol of youth and optimism. Now the preferred symbols of aspirational youth are Gucci, Versace and Courvoisier. When hip brands are notionally American such as Nike or RocaWear, the actual product is likely to be made in Guatemala.

And Gil Scott-Heron? He was arrested a few weeks ago for possession of a banned substance.