One of the sites I read a lot is Foreign Policy magazine. They do have informative and interesting articles, but tend to lean a little bit too much to what even they call “the Ivory Tower”: Academics who have a tendency to make flowery pronouncements without benefit of street realities, and then are puzzled as to why both politicians and the proletariat don’t just fall at their feet. A good example is this “special report” I’ve been reading- 13 out of the tinderbox ways to save the economy. It is 13 separate articles which they preface with: “Debt-ridden and hidebound, Europe may be on the verge of a painful breakup. America is still reeling from the 2008 financial crisis. Even China and India -- the new engines of global growth -- seem to be sputtering these days. Worse yet, the usual wonkish prescriptions don’t seem to be working anymore. So we asked 13 of the smartest people we know to give us their one out-of-the-box idea for fixing the global economy. Here’s what they recommend.”
They lead off with business editor Paul Kedrosky’s plan to institute a systematic, measured “Jubilee year” in which worldwide debt at all levels is written off. Thought process being that while debt is necessary to capitalist economies, the amount we have is so unsustainable that something has to be done- a reset button, if you will. I can follow that to a point, and the point is his as well- it is not a permanent fix, as debt will and will need to rebuild. Where I find fault is that his, and any of these other fixes are only temporary in nature. Follow me: Modern industrial-financial progress is made possible by two things- the Market and Insurance. Capitalism at its base is the transfer of goods and services, usually with the help of an exchange medium (i.e. money). Neither the stock market or insurance transfer a product. Thus they are a parasite on the system. However, they have allowed the SCALE of economy that we are now tied to, and cannot untie ourselves short of all joining a Mennonite community. Thus, a Jubilee year, or any other solution, is just pumping the water out of a basement that was never built to keep water out.
Next up was “freelance economist” Dianne Coyle, who isn’t the only one to suggest a WPA style program, on an emergency basis. But you know, I wonder if this isn’t time to expand the idea. Again, follow- what if you established a “National Infrastructure Corps”, by eliminating both Unemployment and Welfare, automatically enrolling these people in the NIC to learn construction and trades, and work the training off in building schools, roads, bridges. The work would be paid for in unproductive funds no longer going to UEB and Welfare, the ones that learn the best would have the opportunity in private sector, and those that didn’t care for the work would be that much more motivated to go find something they DID like. Of course, I’m sure that the liberals would be scrambling to put forth “right to not work” legislation to sink it.
Tech forecaster Paul Saffo suggests we find a way to collect “better data” with which to figure out what the economy is doing. He says that we’ve been beating ourselves by thinking of the global economy as an “equilibrium” economy. (it isn’t; the market and insurance alone assures that.) He wants to be able to forecast its dynamism by establishing a world database that would be “ an institution with the analytic resources of Wall Street players, the reach of Google, and the openness of Wikipedia. “ Yeah, but if it has these attributes, how do you guarantee the ACCURACY of the data? It’s easy to say that it would “ serve a purely informational role with no policy responsibilities”; harder to see that those who DO have those responsibilities don’t feed it fudged numbers, like Obama’s unemployment numbers that look better until you add in those who’ve given up job searching altogether.
Barney Frank, of all people, is next with a proposal for a Ron Paul/George Sorous like neutering of Defense. And actually, he has a part of something here. He is spot on when he says, “many of my conservative colleagues have opposed the idea of reducing our military budget on grounds that I refer to as "weaponized Keynesianism." They claim that government spending doesn't create jobs -- unless it is for the military. Many opponents of cuts in military spending now argue against them not in terms of national defense, but on the grounds that they would cause job losses. “ I would like to think I am not the military isolationist that the aforementioned gentlemen are; however, there is entirely too much waste being vacuumed into the Pentagon, and that has to stop.
Menzie Chinn and Jeffry Frieden suggest a small raise in the inflation rate will do the trick; I am not convinced that this will do anything but pay someone else’s debts with my money. Justin Yifu Lin suggests the WPA idea anew, but as a global project working in the third world- and I say, if I don’t want my efforts militarily expended there, why do I want my development money going there? By the time we get them on a par with where we are, we’ll be on a par with where they were.
I really find it hard to believe that a blogger with a 30 year old degree in business from IPFW should have to tell such a famous and allegedly intelligent economist as JK Galbraith that he’s full of shit, but here we are. He proposes a $5 raise in the minimum wage. “a high minimum wage would be a self-enforcing deterrent against abusive employers seeking cut-rate help. Jobs for the undocumented would dry up. Those who hold onto their jobs -- the vast majority of low-wage workers and especially those with U.S. citizenship, English fluency, experience, and skills -- would gain a big advantage.” He bases his support of this moronicy on three items. #1- “Would this hurt competitiveness? Not at all. That's an issue for manufactured goods and traded services like insurance and banking, sectors in which everyone already earns far more than $12 an hour.” Hello, asshole? I work in a manufacturing job in which NO ONE is making $12 an hour, and if they did, 90% of the jobs would be in China in a heartbeat- including mine. You might want to look around and see that not everyone works a nice cushy union job before you pour forth such excrement. #2- “Would prices go up? Some would. But rich people can afford it -- and workers would have extra income to pay the higher prices, so most of them would come out ahead. Women in particular would benefit because they tend to work for lower wages. With more family income, some people would choose to retire, go back to school, or have children, making it easier for others who need jobs to find them”. Again, this justification discounts the entire strata I live in, and is a nice solution for the wealthy. Just the kind of thing that idiot occupistas would support. #3- “Most of all, a big jump in the minimum wage would be a reparation. It would be a payback to those who have suffered from the economic crisis: the working population. It would be an act of justice.” Thank you, so much, JK, for gifting me with the loss of my job. Kiss my ass.
The other ideas involved: Seed money to small entrepreneurs, instead of pissing $500 bil down Solyndra’s toilets; stopping the “gaming” of the world’s exchange system (including, but not limited to, China); a surtax on private consumption over $500,000 (another lovely steal-from-the-rich plan that would fall flat as the wealthy turn savings into offshore investment –nod-nod-wink-wink); Breaking the cycle of unemployment-to-poor-health- to poor-education- to unemployment by teaching people how to take care of themselves better (Can we wake up here? Please? People don’t not take care of themselves do to lack of knowing how to- there are resources EVERYWHERE. They don’t take care of themselves because they don’t FEEL LIKE IT. Diet, exercise, checkups, are all things readily available. Motivation is the problem, and no program will solve it.); redesigning cities to be greener by being denser packed, thus eliminating the need for polluting public and private transportation ( and ensuring we all pay Selling New York prices for the least hovel); and the brilliant idea of one Daniel C. Dennett: “We academics have long summer vacations and even longer sabbaticals -- glorious big chunks of green time in which to write books, spend months on end studying various phenomena, or just see the world or build a boat. We don't just enjoy recreation; we re-create ourselves.What would it take to create a system of allocating work that maximized green time for everyone? “ Now there’s a helpful idea- but what else would we expect from one of the “Four Horsemen of New Atheism”?
For your next special report, FPM? How about ideas from people who might have a clue, who fight against total economic loss every day, and for whom bankruptcy is something more than an intellectual exercise to be done on some random “green” day?