Obama: On Shovels, Banks and Wars
Obama: On Shovels, Banks and Wars
Obama hasn’t any choice but to put “revitalizing the economy” at the top of his agenda. It could be a problem. Sure, everyone wants to keep their jobs or their business. They want to meet their mor
Obama hasn't any choice but to put "revitalizing the economy" at the top of his agenda. It could be a problem. Sure, everyone wants to keep their jobs or their business. They want to meet their mortgages or pay the rent. They want to buy groceries. They wish they had health care.
But isn't revitalizing an economy that just bilked everyone out of their equity and retirement like giving a gun to a crook with a cold? It won't cure the cold and makes re-offending far more likely. We might need to rethink the economy, instead.
For instance, policy makers want "shovel ready" projects to "jump start" the economy, like a dead car. Roads and bridges are the most common examples. There are plenty of roads and bridges that need work, probably more than can be funded. But does it point us in the right direction? Cars are a problem. We should ditch the shovels. Push the car aside. Even if we reduce dependence on foreign oil and pollution, we already can't afford to solve congestion problems, especially if we also need to replace our cars. Cars consume almost 30% of our personal income. We can't afford more. We need that money.
Cars do have indispensable uses. If we want to make them work, the best way is to make transit a better option in cities where cars should not be a necessity. Put trucks on trains so freeways can be used to get where transit doesn't go. These are not shovel ready projects, but what’s the point investing in obsolete infrastructure? Why prop up wasteful drains on the economy? This fundamental issue extends beyond transportation to communication, schools, health care, energy and finance. Hillary Clinton wanted to “take America back”. Obama wanted “change” - hopefully to take America forward.
Revitalizing the economy should not resemble giving rolls of quarters to a gambling addict arriving at the casino. The Treasury Department has already doled out hundreds of billions of dollars to prop up big banks. Not one shred of credit has been restored. Now word has it that much, much more assistance may be needed. Banks won't even lend to one another. The problem is that one bank can't reliably assess the value of another. It's all balled up in opaque derivatives that the recession makes look like an increasingly bad risk. Banks want to hoard their resources, just as consumers have. It's not working.
Maybe we should let the chips fall where they may. As banks go bust, their questionable assets might be affordably assembled in a central clearing house. From there, we should return mortgages to their local origin and associate them with their underlying properties. That’s where they belong.
Localization, as has already been discussed in these pages, is a concept that could be very important to our futures. Our best chance of pulling out of this tail spin is probably to seize the controls ourselves. Employment and productivity in Bellingham can be repaired more easily than in the country as a whole, or the world. No one is more qualified than us. Simply trying might be the best medicine. Examining our local balance of trade and working it toward a surplus would do wonders to put our economy back on track. Isn't that where we went awry, spending borrowed money we couldn't pay back? Local efforts to meet our own needs, replace imports and increase exports may never achieve the highest international economies of scale, but putting folks to work and money in their pockets is not a bad start. Why should Tyson and the Jolly Green Giant provide hot meals in schools if local growers can do the job?
Instead of pouring good money after bad banks, Obama should consider localizing his efforts. We're down to just a few big banks and should already understand that "too big to fail" is just too big. On the other hand, “Micro-finance” has been proven to be a powerful way to create jobs and offset poverty. Let’s fund special, local credit unions dedicated to restoring mortgages to their properties and financing businesses that focus on local production of sustainable goods and services. Keep folks in their homes and create opportunities for work. Maybe existing credit unions could foster special programs for such stimulus funds. We have many other resources to tap. Our schools, business assistance programs and talented local people could pull solutions together faster, more efficiently and more appropriately than any big bank or federal bureaucracy. That's how the Mondragons were able to succeed against what now faces us. But, as they discovered, we will probably need to first abandon our dependence upon outside fixes. We need to roll up our sleeves and get busy doing it ourselves. It looks to be a very big job.
One thing Obama should consider is a tax code that doesn’t interfere with folks feeding, clothing, housing and caring for their families. If getting currency circulating in the economy is important, why waste time sending it back to Washington, D.C.? We already anticipate a wave of business failures and bankruptcies as the economy worsens. Should the IRS be delivering the coupe de grace by sweeping bank accounts of struggling small businesses that have fallen behind? It’s smarter to provide relief that keeps them going so they might pay taxes another day, when things improve.
Meanwhile, Obama wants to end the war in Iraq - only to take it to Afghanistan. Giving bombs to megalomaniacs will not revitalize the economy. It’s a drain, a big drain. We simply can't afford it. Wars are like cars, brutal, inefficient and too expensive. There are much better uses for the money. If we want to protect America, building strong communities is maybe the best start. Here again, does investing in technology and infrastructures no one should use really take America forward? The expense robs us of other opportunities and having the stuff just makes using it more likely. Besides, many perceived threats might better be treated from a public health perspective. It's not easy to make impressive rockets, good bombs and bullets. We know who can and what it takes. Like prescription drugs, let's do a better job of regulating the manufacture and distribution. How many unacceptable aggressions arise as a last resort against the perceived enforcement of inequities? How many might be mitigated simply by providing better basic opportunities? Let’s get back to setting a good example. It’s easier, cheaper and more effective. Don't end the war in Iraq. End war. We need the money.
But isn't revitalizing an economy that just bilked everyone out of their equity and retirement like giving a gun to a crook with a cold? It won't cure the cold and makes re-offending far more likely. We might need to rethink the economy, instead.
For instance, policy makers want "shovel ready" projects to "jump start" the economy, like a dead car. Roads and bridges are the most common examples. There are plenty of roads and bridges that need work, probably more than can be funded. But does it point us in the right direction? Cars are a problem. We should ditch the shovels. Push the car aside. Even if we reduce dependence on foreign oil and pollution, we already can't afford to solve congestion problems, especially if we also need to replace our cars. Cars consume almost 30% of our personal income. We can't afford more. We need that money.
Cars do have indispensable uses. If we want to make them work, the best way is to make transit a better option in cities where cars should not be a necessity. Put trucks on trains so freeways can be used to get where transit doesn't go. These are not shovel ready projects, but what’s the point investing in obsolete infrastructure? Why prop up wasteful drains on the economy? This fundamental issue extends beyond transportation to communication, schools, health care, energy and finance. Hillary Clinton wanted to “take America back”. Obama wanted “change” - hopefully to take America forward.
Revitalizing the economy should not resemble giving rolls of quarters to a gambling addict arriving at the casino. The Treasury Department has already doled out hundreds of billions of dollars to prop up big banks. Not one shred of credit has been restored. Now word has it that much, much more assistance may be needed. Banks won't even lend to one another. The problem is that one bank can't reliably assess the value of another. It's all balled up in opaque derivatives that the recession makes look like an increasingly bad risk. Banks want to hoard their resources, just as consumers have. It's not working.
Maybe we should let the chips fall where they may. As banks go bust, their questionable assets might be affordably assembled in a central clearing house. From there, we should return mortgages to their local origin and associate them with their underlying properties. That’s where they belong.
Localization, as has already been discussed in these pages, is a concept that could be very important to our futures. Our best chance of pulling out of this tail spin is probably to seize the controls ourselves. Employment and productivity in Bellingham can be repaired more easily than in the country as a whole, or the world. No one is more qualified than us. Simply trying might be the best medicine. Examining our local balance of trade and working it toward a surplus would do wonders to put our economy back on track. Isn't that where we went awry, spending borrowed money we couldn't pay back? Local efforts to meet our own needs, replace imports and increase exports may never achieve the highest international economies of scale, but putting folks to work and money in their pockets is not a bad start. Why should Tyson and the Jolly Green Giant provide hot meals in schools if local growers can do the job?
Instead of pouring good money after bad banks, Obama should consider localizing his efforts. We're down to just a few big banks and should already understand that "too big to fail" is just too big. On the other hand, “Micro-finance” has been proven to be a powerful way to create jobs and offset poverty. Let’s fund special, local credit unions dedicated to restoring mortgages to their properties and financing businesses that focus on local production of sustainable goods and services. Keep folks in their homes and create opportunities for work. Maybe existing credit unions could foster special programs for such stimulus funds. We have many other resources to tap. Our schools, business assistance programs and talented local people could pull solutions together faster, more efficiently and more appropriately than any big bank or federal bureaucracy. That's how the Mondragons were able to succeed against what now faces us. But, as they discovered, we will probably need to first abandon our dependence upon outside fixes. We need to roll up our sleeves and get busy doing it ourselves. It looks to be a very big job.
One thing Obama should consider is a tax code that doesn’t interfere with folks feeding, clothing, housing and caring for their families. If getting currency circulating in the economy is important, why waste time sending it back to Washington, D.C.? We already anticipate a wave of business failures and bankruptcies as the economy worsens. Should the IRS be delivering the coupe de grace by sweeping bank accounts of struggling small businesses that have fallen behind? It’s smarter to provide relief that keeps them going so they might pay taxes another day, when things improve.
Meanwhile, Obama wants to end the war in Iraq - only to take it to Afghanistan. Giving bombs to megalomaniacs will not revitalize the economy. It’s a drain, a big drain. We simply can't afford it. Wars are like cars, brutal, inefficient and too expensive. There are much better uses for the money. If we want to protect America, building strong communities is maybe the best start. Here again, does investing in technology and infrastructures no one should use really take America forward? The expense robs us of other opportunities and having the stuff just makes using it more likely. Besides, many perceived threats might better be treated from a public health perspective. It's not easy to make impressive rockets, good bombs and bullets. We know who can and what it takes. Like prescription drugs, let's do a better job of regulating the manufacture and distribution. How many unacceptable aggressions arise as a last resort against the perceived enforcement of inequities? How many might be mitigated simply by providing better basic opportunities? Let’s get back to setting a good example. It’s easier, cheaper and more effective. Don't end the war in Iraq. End war. We need the money.
8 Comments