Saturday, September 3, 2011
Very soon, the President (after allowing himself to be beaten like a scabby dog over the date of his speech), will dust off some tired, aging ideas and present them as the New Way Forward for American employment. He’ll likely interrupt the beginning of a football game, pissing off legions of Red Staters and other residents of Hooterville America – because at this point, they’re either running so scared of losing what work they have that they’d sooner forget reality by any means possible, or they’re unemployed already. Either way, football is better medicine than learning (again) that their President has nothing to offer them – and hey; he took the 12-gauge shotgun out of America’s economic pie-trap last month by way of ending the debt-ceiling fight. Maybe he’ll get points for that - but don’t count on it.
The Republican frontrunner, Rick Perry, is telling everyone that he can solve this problem – and he holds up his own state of Texas as a shining light of employment in the face of a national economy which has gone to Hell.
Peeling back the onion, we have two solutions: Obama is likely to tell everyone to work for free via a ‘workfare’ program; Perry is going to tell everyone that they can have jobs – as long as those jobs are flipping burgers and washing cars.
Neither is addressing the real issues. Meanwhile, people are increasingly fending for themselves, much like the residents of Saigon simply walked to the edge of town and started digging tank-traps in April of 1974, while the government radio told them everything was fine, and the North wasn’t anywhere near the capital.
History proved them wrong. It’s about to do the same to the current American government.
So, how do we fix things?
First, we’re going to have to admit that both Bush and Obama have failed.
Bush failed (and Congress did, also) when he/they bailed out the nation’s banks, violating one of the unwritten tenets of capitalism; that anyone who fails is left to sink. Instead, they’re all sitting on a load of our grandchildren’s cash, parking it offshore and waiting for the inevitable failure of the American economy.
Second, we’re going to have to look at the elephant in the room.
The elephant – trillions of dollars of uncollectible debt, propped up by tax money and kept on the books by the nation’s banks - still has to be dealt with, and foreclosing on the nation’s housing-stock isn’t the answer.
Those of you who took a little economics in college are going to tell me, “But Will – how can the banks just write those loans off? They’d fail.”
Absent the bailout funds (which are probably accounted for differently), yes, they’d fail. And you know what? That’s fine. It’s about time.
(We can take a look at North Dakota for our paragon. They have maintained the lowest unemployment in the nation – this is largely due to the fact that they were insulated from the effects of the housing-bubble.
This is because they have a state-owned bank, which is well-run and well-regulated, and which is where most North Dakotans do their banking business (although private banks are chartered as well). As a result of responsible loan practices, they ‘took a pass’ on loaning cheap money at subprime rates – and North Dakotans were spared, in turn, the ugly economics of speculation, ‘flips’, and other things which have destroyed housing markets all over the country.)
Yes; I’m advocating a return to small business and local economy. Why?
Because small-business is what creates jobs. Until we quit pandering to large corporations for job-creation, what we’re doing is little more than the cargo-cults during WWII – building idols of airplanes and making marks on tapa-cloth as ‘invoices’, in the hope that the magic silver birds will appear out of the sky and drop massive boxes full of Spam and condoms.
Large corporations – anywhere – are loyal to one thing and one thing only: Massive profits; generated globally and invested wherever they can make the most return. They have zero loyalty to the nation; to the community; to employment.
Forget ‘stimulus’ – in spite of the current administration’s claim that the ‘stimulus’ ‘created’ 2.9 million jobs, when you pull back the skin on that rotten turkey, you’ll find the maggots of faulty accounting and the decay of make-work jobs.
If we want to create permanent employment for millions of Americans, we need to do four things, and do them now – the first is to tell the banks to write off the trillions of dollars they have in bad mortgage-paper; the second is to create a genuine single-payer health-care system; the third is to rewrite the tax-code to emphasize saving and investment, putting a genuine progressive schedule in place which puts the tax burden on the wealthy and accounts for inflation, and removing deductions for classes of consumption; the fourth is to reregulate the financial system.
What we’d see is an immediate, yet controlled, drop in housing prices – and before you cry ‘Socialism!’ to my suggestion that the banks simply write off their uncollectable mortgages, you should really consider that it was free-market conservatives who got us in this mess in the first place – allowing them back in the tent to do more of the same sort of damage is insanity.
Yes; I’m suggesting that the banks write off uncollectable paper, and start handing out deeds – because the alternative is millions of people in the street – and therein lies a nasty word called ‘revolution’.
We’d also see a drop in inflation, and an increase in the value of the dollar, as reflected by a drop in overall prices. Wages would drop, also – but it wouldn’t take a six-figure income to buy a house and put our kids through college anymore, either.
This is the same medicine which some European and Latin American countries had to swallow – but the sooner we accept this and quit saying, “This doesn’t apply to us! We’re ‘exceptional’!”, the better off we’re going to be.
Now that the debt-ceiling debacle was pandered to a sorry finish by Obama, the US can get back to its systemic collapse in an orderly manner, and neither Obama nor Perry have any answers. Half the world is starving to death, so we can forget about selling them iPods; one in five Americans is out of work; one in four American children live in poverty, and half the damn country is on food-stamps (a self-reinforcing ‘fish-for-a-person’ program if ever was), so we can forget about selling them anything, either.
Sooner or later, big business in America is going to have to realize that absent someone to buy things, making them is a worthless exercise – and they can’t just keep trading their stock back and forth and telling themselves that they’re all ‘making money’, any more than Cletus McSixpack was an instant millionaire by flipping houses – because someone, or multiple someones, have to be the last ones to get a chair when the music stops.
Personally, I don’t believe my four points, above, have an ice-cube’s-chance-in-hell of ever being done. Actually, I don’t believe we’ll ever really solve this debt-and-unemployment crisis; the government will continue to rearrange the deck-chairs and ignore the problem completely until we’re broke completely, and the obvious is staring us in the face. Will American ‘pluck’ finally rise to the occasion? I doubt it.
The reason is a conversation I had with a fellow in my neighborhood the other day. I began mentioning some of the obvious things – and he returned with a Fox News summary of ‘liberal’ failures, and why we needed a ‘God fearing’ man in office again. In that, his comment was America-writ-large; a statement of the 60%+ of the American electorate which believes to the core of its being that if we just double-down on the past thirty-years of insanity, we will by some magic alchemy achieve a different result.
I didn’t continue the conversation. I needed to mow the lawn anyway.