Note: There will be no post on Labor Day. The next post will be on Wed 9/7 when we resume twice weekly posting with a new array of topics.
Do you see a process like Brexit in America’s future?
The Problem of Narrow Vision
Following the Brexit vote Alan Greenspan was interviewed on Bloomberg television. He believed that Brexit was a mistake but his answers told me he did not fundamentally know how to approach the effects. It was clear he was looking for answers to a complex process in monetary policy alone.
Finding Reality and the Specifics
Touring the political landscape of the United States we see that we have a portion of our people who are similar to the British who voted for Brexit. But there are also some marked contrasts. Our country was built on the dedication of immigrants and they are still coming in. What we have not done is regularize the system. In all, what I see is that the solutions, if we focus on the United States alone, are for us to seek social solutions in conjunction with financial solutions. It seems the entire world is suffering economic problems but they are not all alike.
Diverse Problems and Solutions at Hand – A Sample
We have made ourselves virtually energy independent but there is a cross cut effect where some states thrived and then crashed (read North Dakota and Texas for example.) Emphasis on solar is working and needs to be given time. if we work with planning for our immigrant population it eases the burden of an aging population. Social Security for example can be stabilized by raising the cap for payments.
Application of Wealth
One of our fundamental problems is that what we have done is to support income inequality which means very wealthy people are taking an inordinate share of income and they cannot conceivably spend it in support of economic and social development. Often they place it overseas and we do not get the tax income from it. The same thing happens with much of corporate income.
A Future for Our Young
Our young people are not being supported. They are accepting the need to live together collectively but I suspect partly because they cannot be independent the same way their parents could. Part of the problem is debt. (Currently the five year rate for a government bond is 1.12%) Their college loans cost them many times what that bonds yield. We need to seek solutions. Without the debt they can have more all encompassing life styles. Then they can spend more to sustain and build the economy.
Away With Austerity
Our debt to GDP ratio is much decreased which means we can embark on projects which will aid our society as a whole. That means austerity is a mistake and we can invest in infrastructure which is sorely needed. Such spending leads to jobs and that means tax income to our government. We are not building debt the way we were under the Bush administration and wouldn’t under this plan.
Specific Needs of Specific People
Younger workers and immigrants have different needs. One of the problems with our current worker distribution is that there are many people who are employed but with low incomes so it makes it difficult to build a future. When we began losing jobs because of the change in the jobs pattern we needed to change our support for retraining and reeducation for the new economy. That is what many of the left behind people need.
An Economic Revolution
There is evidence we are entering a new economy called postcapitalism (See Postcapitalism by Paul Mason) and we need to study what that means. Yes, many things are costing less (see Wikipedia and the basis of bitcoin) but that means we need to look for consecutive solutions. Old and outdated foci on monetary policy will not aid and abet our way out of these dilemmas. What we need is creative foci on what new ways we can use to respond.
There is a financial problem with our health care system. We need to have broader participation in health care but the answer is not in simply taking more people in. Our system is inefficient and needs to be modernized. Health care costs can come down considerably and with a better system and more people in it the costs do not have to skyrocket.
Fulfilling Our Promise
A general view of the U.S. suggests we hold considerable promise. Not through return to the gold standard, austerity or inhibiting governmental interaction. We need an efficient government, an efficient and cost effective health care, a younger generation freed from restraint, embracing our immigrants and retraining and reeducation to prepare people for major change in the economy. Again we come back to the fact that the solution to welling problems is not monetary but efficiency and change and that means social change and support. Europe may be mired but the United States does not have to be. Currently there is a stunning lack of vision and vision and the end to obstruction will lead us to our promise.
What are your priorities?