Tuesday, August 17, 2010

Rot Reversal

I do get involved in some of these online chat/debate/name-calling sessions, though not as often as I used to do. I often do this under my nom de plume, chinshihtang (usually without caps or apostrophes) so if you want to find some of those you can find them searching Google and some other sites (N.Y. Times, Huffington Post, etc.). The ones I cut, paste, and post on this blog are probably about only 25% of those that I get into, but I generally don't get too much more feedback there than here.

So, why do I bother? Good question, and one that I can not answer in so many words except to paraphrase a writing teacher I had once who said, essentially, that if you don't feel compelled to write, you won't.

Anyway, I'd been thinking about a blog posting about our economic mess and found I'd pretty much said what I wanted in this comment dialogue about a posting called "18 Signs America Is Rotting Right Before Our Eyes". That posting itself was a bit of selective reporting drawing huge conclusions from anecdotal information, so as such not a big deal, but I was touched by the comment posted by a sincere guy named "George":

I agree with the "diagnosis," but would like to hear from people who have good ideas on solutions. They could be categorized as follow: (1) Targeted taxes (increases) and targeted tax breaks (reductions). (2) Major cuts in selected domestic programs. (3) Major cuts in selected military programs. (4) Getting more money in the hands of people who will spend it right-away to immediately boost consumer spending - i.e., the lower middle class, the poor, people out-of-work, ect. (5) Means Test" selected entitlement programs (social security, medicare). (6) Eliminate "corporate tax breaks" to companies who outsource jobs overseas, and give tax breaks to companies who increase their payroll and pay a living wage. (7) Renegotiate U.S. taxpayer interest rate to The Federal Reserve. (8) Remove corporate subsidies and introduce real capitalism into the marketplace. (9) Employ cost-benefit analysis to all unnecessary wars and miltary bases.(10) Charge other nations and companies when the U.S. military is used to protect "their" shipping lanes and locations. (11) Promote "workfare" and public works for able-bodied persons receiving pubic assistance. (12) etc.
You get the idea, George.

And here was my response:
I like what you are doing, George, trying to be constructive. I would say immediately that 3), 6), and 8) are great ideas that should be no-brainers but in this constipated political environment are not. 2) sounds good but will not produce the results many expect. 9) doesn't really make sense--if the war is "unnecessary" there would be no cost-benefit analysis that would change that and make it desirable.

I would like to suggest a general category that I don't see: targeted investment in our nation's future. To give an example, highway investment makes sense to a certain extent to keep the economy flowing, but not all highways and bridges need to be kept up, and minor roads returning to gravel may make sense in some cases (remember the "Bridge to Nowhere" in Alaska?). There should be a strategic assessment of the roads and bridges that are most important. We should be investing in alternative fuels such as natural gas for public transportation, upgrade of rail lines, and research in lower-emission forms of cars and airplanes. We should be investing in upgrading our power grid and providing home electricity inverters so that alternative energy sources will be more practicable. Investment in education is actually on the right track now but should be more strategic in the expenditures.

The macroeconomic debate seems to focus on a point/counter-point between the Keynesians and the supply-siders, neither of which has a good argument to deal with this jobless recovery (a/k/a the shallow ascent portion of The Great Crater). I have plenty of respect for the ideas of deficit spending in a recession, and I do not agree that the stimulus did not "work", in that it stopped a downward spiral, but I think it's clear that we both overspent and overly cut taxes all the way through the lead-in to this economic miasma, so it is almost illogical to expect the same policies to get us out of it.

The high jobless rates we are in are structural in nature and will tend to continue for decades, because this society simply doesn't need to put everyone who wants a job to work in order to produce and consume everything we need or think we need. There is no short-term solution which is really going to work to produce millions of new private-sector jobs, so forget about it, accept the reality, and blame whomever you want.

The key word is "structural": we need to be building a new economic structure suited to our children's and grandchildren's needs--upon that is what it would be worth spending our macroeconomic, legislated (or executively ordered) dollars. I gave a few ideas above.

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