Sunday, August 21, 2011

Letter to All the Pundits

Letter to All the Pundits

I'm not sure what's scarier, the hapless ineffectual thinking printed by today's thinking class, or the fact that this is our thinking class. Unemployment is not going to change with any of the current logic because all of the current logic is wrong. To solve a big problem you must first have an accurate mental picture of what is genuinely the problem. It is not 'the economy,' so none of the usual 'stimulating' or 'growth' solutions apply any longer. Let me tell you what it is.

Forces at Play
  1. Every day it takes fewer people to produce the same amount of goods and services. Sorry to tell you this, but more and bigger waves of jobs will continue to be made irrelevant by technology.
  2. Technology consolidates wealth. (Yes, it also enables individuals to rise from obscurity to wealth, but that, too, does much more to consolidate wealth than spread it.)
  3. Neither pure government nor pure free-markets were ever either a fact or a successful solution. We always had a balance. The mistake in the pundology?: capitalism is only the enginge; it was never the entire vehicle. On the flip side, governance seems to inevitably produce self-fulfilling cycles of overuse.
  4. Population has reached a new level that threatens the environment, and therefore no longer creates more growth than it takes away.
  5. Energy, the greatest component in commerce, has increased dramatically in cost.
  6. Despite reports to the contrary, US manufacturing employment is at an all-time high, with approximately 2 billion people working... they're just working in China and elsewhere for an average of perhaps $1 per day. It's a complete fallacy that our manufacturing jobs have moved offshore. Our manufacturing jobs—middle class ones—disappeared and were replaced by poverty-level ones elsewhere.
The result of all of this? Growth not just unsustainable, but the precise opposite of sustainability.

Some solutions:

  1. Manage all of these problems. If you think business will do this better than government, you probably weren't watching Enron, Bear Stearns, ad infinitum. If you think government is the whole answer, perhaps you've never waited in line at the Post Office. Success has always been from a balance.
  2. Direct our public funds toward recreating our society, not around individual commuting transportation, but shared transportation. Make this, not road-paving, our greatest public works project. Putting money into private transportation will continue to suck money out of our economy, not add to it, no matter how many jobs it temporarily creates.
  3. Create a new, lower friction, commercial freight system to replace trucks for suitable portions of the geography.
  4. Control our southern border, then help Mexico control their population.
  5. No, executives who earn 5,000 times the minimum wage do not do it with 'hard work.' That only gets them the first 100 or 200 multiples of what mere hard workin' folks earn. After that, it's purely technology that affords the super rich their wealth. From athletes, to movie stars, to Wall Street barons, the top-of-the-world success might be 100% hard-earned, but the hideous excess is ONLY from the wealth of society. Whether you call it 'taxes' or socialism, we need some solution. Like it or not, the best option is probably a law—yes, a law—on the ratio between lowest and highest paid employees (including stock gains). This will allow executives to have their yachts as long as the custodian has a fishing boat.
  6. Radically simplify our tax code. This is unrelated to whether or how progressive the rate is; this is simply about getting back to efficiency and basics. Initially it will cause the loss of thousands of jobs, those at the IRS. Then, the saved money will be put to real work on authentic wealth and business—not just false 'busy-ness.'
  7. A more mundane, short-term idea is to mandate that all publicly-funded construction projects be performed with two or three shifts to the extent possible.

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