With an unemployment rate of 9.1%, everyone is screaming for jobs. Everyone is waiting with baited breathe to hear how President Obama is going to fix the dismal job situation in this county and return America to work. Would you like to know the answer right now? You would? Okay, here is the answer - Nothing.
If you’re from either side of the isle you will probably read that as an attack on Obama’s abilities, or lack thereof, as president of the United States. It actually is not. As the republicans have been fond of pointing out (at least up until they began their run for the office), the government cannot create sustainable jobs. Yes, the president and congress can create some infrastructure projects that will put some construction workers back to work for a short period of time but these “shovel ready” jobs are short lived and do very little for the long term health of the nation. These jobs will also do nothing for the majority of the unemployed. There are enough construction workers and laborers on the unemployment rolls to fill these jobs without touching the remaining unemployed workforce (accountants, IT personnel, managers, technical support, etc). These jobs are not only short term but they are also a drain to the overall economy. They drain the government coffers and produce no real means of replenishing them.
So, how about the republicans? If the democrat’s ideas won’t work then the republicans will, right? After all, they want to follow in the footsteps of the great Ronald Regan whose economic policies turned our nation around; pulling us out of a deep recession and putting America back to work. Well, not so fast...
There is no doubt that Reagan’s policies did not hurt the nation and there is no doubt that the country went from “rags to riches” during his tenure in office. However, Reagan’s policies had little to do with the majority of that turn around. Reagan had help that no president from either party is going to have in the foreseeable future. This “help” drove the U.S. economy from a trickle to a raging torrent in a matter of just a few years. What was this magic bullet that so aided Ronald Reagan’s rise to presidential greatness? It was called the “digital age”, and it was coming whether there was a republican in office or a democrat.
The first true personal computers came onto the market as early as 1976 – mainly as a gadget for hobbyist geeks. By the time Reagan entered office the market was ready to explode. This “new” technology (it wasn’t really new, it was just now becoming available for the mass market) and all the new technologies that followed (hard drives, laser printers, the “mouse”, faster processors, networking, etc) drove the economy out of the recession and into glory. Ronald Reagan rode this wave into history, he did not create it.
So what are we going to do? Well, first and foremost we need to make sure that we put someone into office that will not make things even worse – and this certainly is not Obama. Other than that there is very little any of us can do – even the president. I know that this sounds defeatist but it is reality. There is no new technology on the horizon that will turn our nation around. Even the protectionist approach of the libertarians such as Ron Paul will not help. Placing large tariffs on imports would drive up the cost of living of all Americans. Can you imagine the cost of that $500 Chinese flat screen television doubling overnight?
Despite the calls of republicans for no new taxes, we do need to fix our tax system and make sure that everyone, including corporations, is paying their fair share. The best way to accomplish this is to do away with the bloated tax code with all its loopholes and write-offs. Corporations such as GE regularly move profits to their foreign subsidiaries and losses to their U.S. subsidiaries to avoid large tax bills. We need a flat rate tax system, starting with the corporations. The corporation’s subsidiaries need to pay taxes as individual entities to take away the trick accounting that leaves companies like GE owing very little even though they made billions in profits. Then we need to move this to the individual income tax system so we are all helping to support our government. This will not fix the current situation but it will make our entire tax system more transparent, fairer for everyone, and take away a source of political double talk that so obscures everything in Washington.
Next we need to buckle down and keep the total Federal Budget below the total Federal Tax Revenue; to continue increasing our debt at this point is irresponsible and dangerous to our nation. We do not need to make drastic cuts across the board at this time. The shock to the nation as a whole would be too great. We need to take baby steps back towards national physical responsibility.
As for jobs, the government just needs to stay out of the way. The economy will slowly turn around and the free enterprise system will decide who the winners and losers are. The government should stop trying to pick winners and losers – they have a lousy track record at that. Practically every solar energy company that Obama taunted as the future of our nation has now gone bankrupt. And if Obama had let GM file bankruptcy to begin with then we could have saved the American taxpayer billion of dollars.
Wait! They paid it back didn’t they? No, actually they haven’t. In fact, GM never actually paid anything back with its own money. The federal government gave $49.5 billion to GM to save it from complete collapse - $6.7 billion in “cash” and the rest by purchasing GM stocks at a greatly inflated price of $53 per share. As it turns out, the feds also put ~$13 billion dollars of aide money into a working capital account for GM. GM, in turn, used this “working capital” to pay back the $6.7 billion dollar cash loan. Now that is “funny money”!
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