Wednesday, October 29, 2008

Ten Things We Must Do to Fix the Economy

Ten Things We Must Do to Fix the Economy

While we're waiting for our retirement savings to evaporate completely, and we continue to argue over how much the President can actually improve the economy, here are things we can do to stop the waiting and begin doing. Some are immediate actions, like legislation. Others are broad, country-wide undertakings that will take many years. There is a common theme, however: they all focus on authentic and long-term values that provide value to society.

Make congress live by the same rules as the citizens.

Until we remove our lawmakers from the protection of the fairytale land in which they live, we are unlikely to get things changed substantially. One doesn't have to be a conspiracy theorist to be concerned that our legislature is broken. To start with, they need to pay for healthcare. (I'd say "... like everyone else," but that's also a problem. Until we separate healthcare from paychecks it's more complicated than that.)

Eliminate the profit in day trading (tax same day profits at 100%).

After all the Enrons, Milkens, and Madoffs (and even whipping boys like Martha Steward) do you understand yet that the stock market is no longer the authentic economic engine that it had been? Whereas it started as an investment system, then tranformed into an auction house, the electronic age completed its change into a manipulation machine for capital companies. The Internet boom proved that, yes, it is a wonderfully efficient means for driving capital to a technological opportunity. But the Internet bust showed that it needs to be reined in just a bit. You should be able to take short term risks and get rewards; you shouldn't be able to get in every morning and out every evening to game the system. Simple solution: tax same-day (or even same-week) profits 100%.

Eliminate adjustable rate home loans.

The home loan business has created as large an economic catastrophe as we've ever known. Get it back to reality by eliminating loans that are so tricky no one knows how much they cost. Try to get a mortgage company to give you a table showing exactly what an adjustable loan's minimum and maximum possible amounts will be and you'll realize how we got into the $700 billion-dollar bailout dilemma we have now.

Invest 1/3 the cost of the Iraq war in solar and wind power.

Somehow we've lost the ability to frame problems and solutions in rational
—meaning ratios expressing proportions—terms. Here's a good example. Instead
of ranting about how we can't afford to invest in alternative energy,

Nationalize the preventive portion of medical care without waiting for a more comprehensive solution.

If we can't move fast enough on single-payer healthcare, perhaps the first step is to try to convert just preventive care. This will ensure that the portion of the problem that has the greatest return on investment is enacted.

Convert to the metric system.

This is the ideal combination of an idea that increases efficiency and creates productive business. Huge amounts of business infrastructure and materials will be rebuilt, renewed, and reprinted. In the end, we’ll have better, easier coordination with the rest of the world’s physical goods. If we change all road signs to meters immediately it will only take about six months for everyone in the US to understand what a meter is. Mr. President, you want economic recovery? Stop looking for pure fiscal manipulations and mandate the metric system now.

Require credit card companies to use PIN numbers.

The notion that most of our financial fraud is substantially one of "identity theft" is an outrageous lie. Rather, the problem is "credit card fraud," plain and simple. And if the only solution is for the credit card companies to be sued until they change their behavior, then so be it for the "litigious society"; our lawyers are asleep at the wheel. Credit cards need stratified levels of security features, first-and-foremost being PIN numbers. If you want a card with as little security as today's cards, fine; you'll just have to pay the highest annual and interest rates. Otherwise, on the lowest price cards we need photographs, PIN numbers, and various caps depending on how anonymous the purchase is. This problem is not hard. It's just that the credit card companies don't want to solve it because it cuts into their business. Think about it. Despite all their "spin," they probably want the fraud. The fraud that they catch they simply pass expenses on to us as a whole. The fraud they don't catch, we simply pay the bills... often with interest. What business would stop that?

Tax gasoline for public transportation.

Every sensible person in America seems to understand that the recent drop in gas prices from $4 to $2 is a great opportunity to tax gasoline for the greater good of future generations. How about $0.25 per gallon this year, followed by $0.25 raises each year. Businesses do not care about costs... they only care about the ability to plan and a level playing field.

Restore respect for truth in advertising.

Closely related to the problems of adjustable rate mortgages is the general problem of false, misleading, and indecipherable advertising and business terms. This includes everything from the seemingly harmless "small print" on TV shipping and handling charges, to the outrageous license agreements on the Web. This is a balance-of-power shift in our whole legal system. We need to shift back to an expectation that businesses cannot simply run roughshod over the consumer with no repercussions.

And what of that question, how much can the President improve the economy? If you ask me we just proved that the President is so influential he can very nearly destroy the American in just two administrations. The converse, while not as easy, should be no less conceivable.