Social Question

Zuma's avatar

What is broken in the American economy that if fixed would create jobs?

Asked by Zuma (5886 points ) January 29th, 2010

I heard a pundit on the news tonight say that one of the things that side-lined health care is that Obama failed to articulate what is broken with the current system, so that if this, that, and the other thing were fixed, it would turn things around.

If you could advise the Obama team about what is broken that needs to be fixed, what would you tell him? (Perhaps, we can make some actual recommendations to his team. So, please share your constructive solutions, and not your sense of futility and cynicism.)

For general economic background, here is an article that puts the present “information economy” in perspective. Here is an article that discusses the problems of how we provide for our “surplus population” through decreasing welfare benefits and increasing incarceration (and how official unemployment statistics understate the case). And here is an article that explains the economic and political ins and outs of wage subsidies, the minimum wage, and the advantages of a full-employment economy.

In the 2008–2009 recession, men have borne 78% of the job losses due to steeper declines in the manufacturing and construction industries, than in the service and hospitality industries. The group that is being hardest hit are men over 50, since employers seem to prefer younger more pliant workers whom they can pay less to older workers, who may be more seasoned and experienced, but also are more likely to use their health plan, and are soon to retire anyway. (Many of these men will not be employed even if the economy does turn around; this why it was proposed to lower the age of Medicare to 55, to pick them up before they run out of benefits.)

It is not just a loss of jobs but a loss of good jobs, declining benefits, retirement plans, and a generation-long slide in living standards. Traditionally, worker productivity gains (which have been remarkable over this same period) would be passed on to workers, but instead employers are using them to pay for their astronomical salaries and lavish bonuses. Unionization has fallen to a mere 12% of American workers (many of whom are in government), so this decline in living standards tends to reflect a decline in bargaining power of workers relative to their employers.

Other things to keep in mind is that there has been little social and economic investment in the inner cities and so these are areas of deep poverty and little opportunity. Our roads, bridges, levies and infrastructure are antiquated and crumbling, and little Katrinas are waiting in the wings. This is also an opportunity to invest in things like parks and the arts, as well as science and technology. Making college more affordable could allow more people to stay in school and relieve some of the pressures on job markets. Somewhat more generous welfare might allow more women with children to stay at home with their children.

No doubt there many other issues and ideas I haven’t thought of that I hope you will.

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40 Answers

The_Idler's avatar

The consumer market is the great engine of the US Economy.
While it seems to be idiotically unsustainable in the long run, with the way your economy is structured, you need to find/create a huge consumer market, and ensure that your manufactories are the most competitive and effective in that market.
This means beating China.
This could mean trade tariffs (ouch!)
Either that, or restructuring the economy.

To stimulate your own consumer market, you need to have easy credit (its the foundation of your nation). This is bound to create another recession some day, but its just the way your economy works.

Growth in consumer demand = growth in construction, maintenance, etc. etc. (everything)

If you take the decline and fall of the British Empire as a model, we first tried tariffs to beat the emerging industrial nations that were out-competing us, and then eventually gave up and resigned to restructure our economy (into almost all financial services and other tertiary sector work).

It did take two World Wars to catalyse that, however.

BoBo1946's avatar

The banks invested the bailout money in stocks! Banks are not lending…plus, as we know, the banks have provided huge bonuses for upper manangement. President Obama is considering putting penalties on the bank for not lending.

john65pennington's avatar

20 to 30 million illegal immigrants taking over and working for a substandard wage. this has eliminated jobs for Americans and the Federal Government is to blame for not enforcing the immigration laws. illegal immigrants are not contributing to the economy of America, but instead are sending their money back to their original home. this combination can be deadly for Americas economy.

BoBo1946's avatar

Footnote to the prior comment!

Poor cash flow can be the death of an otherwise healthy business. If a small business has more obligations than it has cash, it’s in trouble.

Simply put, cash flow is the money flowing in and out of your business. If, for any length of time, your business takes in less money than it spends to produce and sell goods, it suffers from poor cash flow.

Having receivables and payables out of synch is often a silent killer of small firms. Their owners are too busy selling their wares and managing other parts of the business to devote any time to financial analysis.

As mentioned before, the banks are not lending money. This is killing small businesses. Wallstreet banks took the bail money and invested the money in stocks. The American people got a good screwing from Wallstreet!

The_Idler's avatar

@john65pennington the same thing is happening in the UK.
Thanks to our supposedly “Labour” government being best buddies with the giant corporate interests.

The_Idler's avatar

China needs to play by the rules.
China cannot survive, without the US consumer market,
but the US can survive, without the Chinese manufacturing base.

Either China plays fair and floats the Yuan, US imposes trade tariffs, or the US goes back to being isolationist, and manufactures for its internal consumption.

Zuma's avatar

I’m not seeing any diagnosis of what is wrong or how to fix it.
@The_Idler “Beating China” is not a concrete policy proposal. Please butt out on this one; your comments are not pertinent or on point.

The_Idler's avatar

Ok mate, you think your shrinkage has nothing to do with your consumer market and China?

You think a revitalised consumer market in combination with a more competitive industrial base wouldn’t create more jobs?

Ok mate.

PandoraBoxx's avatar

Caps on lending rates, and the debt practices for funding higher education. You should not have to pay on loans for 30 years because you educated yourself. Likewise, credit card debt at 26% is impossible to pay off. People who should be consuming cannot afford to consume.

Ruallreb8ters's avatar

If the housing market was “fixed” and people started building it would create thousands of jobs

marinelife's avatar

I think one of the main problems is the government’s failure to shake money loose from the banks for small business loans.

Zuma's avatar

@The_Idler No, it has to do with investment decisions made here: NAFTA, MFN status for China and the subsequent hollowing out of America’s industrial base by Wall Street elites. Please butt out, and leave the discussion to Americans who know something about it.

Plus, you are essentially recommending to us a policy that destroyed your own empire.

Plus, I asked you nicely to forego this discussion since you are obviousy unaware that the reason why our banks are not lending is that interest rates are too low for them to make any money long term. Credit can not be made “easier” unless the government lends directly to consumers, which would be instantly denounced as SOCIALISM!

You do not know enough to participate in this discussion and you have been asked politely to leave.

The_Idler's avatar

So, you wanted something more specific?
Fine, I don’t know exactly how to achieve it,
but the point remains that employment comes from the consumer market, and the consumer market is fuelled by internal wealth, and internal wealth comes from employment. China disrupts this cycle by undercutting the industrial base. Only easy credit has kept it going for so long, by artificially stimulating the consumer market (beyond what was sustainable).
The lack of easy credit now has exposed and exacerbated the effects of the relative decline of the US industrial base.

If the US industrial base was more competitive than China, within the US market, it would grow, there would be more jobs, more wealth, bigger market, more profitable industrial base, and so a healthier economy. I know the blame rests as much with big US corporate interests, as much as with China, but I will admit that I do not know how to control big US corporate interests (does anyone?), so I’ll just take your advice and fuck off. =}

Zuma's avatar

Yes, we need to have a more competitive industrial base. How do we get it back?

It used to be said that if America were a banana republic, our banana would be the automobile. But look at what’s happened to our auto industry. It fought mileage and safety standards tooth and nail for years, preferring to sell gas-guzzling behemoths that handled like sofas on a runaway soap bubble. They resisted all pressure for forward change and ended up with a crappy product that nobody in the world wants to buy. Look at what happened with our bailout of GM. That was essentially an influx of cheap capital. But there was no follow through in redesigning product—no American Prius, no cutting edge hydrogen vehicle (or whatever). Their management remains insular and stuck in the same backward-looking mindset as before.

The real reason we bailed out GM (and always will) is national security. If we ever get into a war with a real enemy, and we have to tool up to make planes and tanks they are practically the only heavy manufacturing plants we have left.

I hear “round up and get rid of all the illegal aliens.” Great! Who is going to work in our slaughter houses and stoop over in the hot sun to pick our tomatoes? Prisoners? Think again. What if they don’t want to, what are you going to do, throw them in prison? (It’s been tried; didn’t work.) We have to look at that problem in a different way. Illegal workers are used to keep wages down—which employers are able to do by making it impossible to organize. Once you have unions, you get decent wages, and you get a shop floor controlled by Americans, not some corrupt employer who is looking to undercut the prevailing wage. It’s unions (or government acting in lieu of unions) that create the good jobs with benefits.

Cash flow problems do hurt small businesses, but not having any customers hurts them even more. How do we get money in people’s pockets so that they can consume again?

Interest rates are already close to zero. They are so low that they can not be lowered any further. The banks are holding on to their money because if they lend it out now at low interest, they don’t make any money; so they are waiting for rates to go up. That leaves fiscal stimulus aka government spending. But every time we try to do that the Republicans pitch a fit that it is adding to the deficit.

Tariffs? We tried those in 1929, and got the 1930s and the dust bowl. Tariffs would start a global trade war, and a collapse of the world economy. War would almost be inevitable.

Caps on interest rates (return to the age-old prohibitions on usury). Now you’re talking, but why are there no caps now when their used to be? It’s because of the relative power of corporations versus individuals in our political system and the economy. Hint: the economy exists to serve the people, not the people to serve the economy. Unless and until there is a shift in the balance of power in favor of ordinary citizens, they will continue getting fleeced and pauperized by rapacious corporations.

Dog's avatar

[Mod Says:] A gentle reminder to stay on topic which is “What is broken in the American economy that if fixed would create jobs?”

Off topic or personal remarks will be removed.

stranger_in_a_strange_land's avatar

A few disjointed ideas to get things moving:

*A steeply progressive income tax to discourage corporate high-flyers.
*Detaching health-care and pensions from employment, major reasons that older unemployed cannot find jobs.
*A massive effort to separate the ecomomy from fossil-fuel dependancy: Nuclear (full cycle, breeder reactors, etc), photovoltaics, wind turbines, tidal power, geothermal (where practical), replacing air travel with ultra high speed rail using the existing interstate highway system right of ways.
*Mandatory education to the point of economic usefulness, there are no more meaningful jobs that can be filled by high school dropouts. Tertiary education, for those qualified should be considered a right and funded by the state.
*Returning heavy industry to the US, but on a highly automated scale, there will be no semi-skilled jobs in these factories.
*Retooling existing industry to support the long-term societal objectives: aircraft industry building high speed rail cars, the auto industry forced to build plug-in electrics, the petrolium industry forced to convert to a hydrogen-based system, the metals industry required to retool to support the new transport and power systems. Standardized, durable, highly efficient housing units.
* All of this will require a much greater government role, even creation of government-owned industies if private industry will not get into line. This will require a complete paradigm shift. Small and medium business private; the really large industries either government owned (and aimed at generating a profit for the good of the nation) or privately owned but its products dictated by the needs of society.
* To accomplish this, large corporate interests will have to be “de-clawed”, No more corporate money in politics. This will require some kind of end-run around the recent unfortunate Supreme Court decision. At an individual level, we can just vote against incumbents, no matter who they are until they start listening to ordinary people.
*Massive projects such as “de-fossilizing” the economy must be led on a command-economy level, since corporations by their very nature cannot see long-term.
*The free-market economy, at least with big businesses, is a sacred cow that is long overdue for the slaughterhouse. Free market at small to medium level, but with an overall commanded objective (off of fossil fuels within 30 years).
*I don’t know how the detailed economics of this would work, but if the government can massively overspend in its current aimless way, the same power can be directed to a useful purpose. I’m an engineer, not an economist.

The_Idler's avatar

@stranger_in_a_strange_land I like those ideas, but I imagine a lot will be denounced by the corporate interests (and so the major parties, at least the conservatives) as being socialist and un-American. You can imagine the media spin.

@Zuma Could you explain to me, and any other no-nothing idiots who may be interested in this topic, exactly why artificially limiting the benefits – to corporate interests – of cheap&non-American production (both from China and immigrants), would not make American manufacturing more competitive, cause a shift in the consumer market toward domestic produce, bring more wealth to the industrial sector, and hence improve employment opportunities?

Because I think that is a reasonable policy, whether done with tariffs or otherwise bullying China, new labour legislation, more centrally planned development, more immigration controls or what else I do not know (like stranger, I am no expert in the details).

As far as I can see, consumer based economies are hit hardest when its “members” become non-participant. This is why, as far as I can see, outsourcing and immigrant labour are good for big-business, but damaging to the economy in the long run.
Because the workforce does not earn a great enough share of the wealth, becomes non-participant, and hence shrinks the consumer market…?

If there is some fatal flaw in this policy of limiting the big-business benefits of using cheap labour, I would really love to know, because this is relevant to me and my country as well.

We’re all here to learn, so please don’t just tell me to go away again.

stranger_in_a_strange_land's avatar

@The_Idler Some degree of socialism isn’t bad. It’s when extreme forms like Marxism are imposed that it breaks down. Our biggest threat in the US now is corporate fascism. They have far too much power and effectively run the government.

The_Idler's avatar

Oh, I know, I just don’t think they are very plausible suggestions, because of that.
Corporations already hold your Gov to ransom.

Mind you, look at China. They had quite a turn-around. But then, they already had an extremely centralised government. It’s easy to decentralise, but rarely (without a catalyst) easy to centralise. This is apparent throughout history.

Maybe this recession will be the catalyst. Here’s hoping.

BoBo1946's avatar

@Zuma why would say that cash flow does not hurt small businesses. Guess it depends on what you call a small business! Certainly not a “mom and pop” business, but certainly will hurt businesses that have 50 to 100 employees!

Yetanotheruser's avatar

One of the big failings of the US economy is the way in which we transitioned from a manufacturing-based economy to a service-based economy over the last several decades. We have had decades of de-regulation of corporations, resulting in the lifting of trade tariffs and the exportation of manufacturing operations.

.

Zuma's avatar

@The_Idler If you read the articles referenced in the question it will lay out a great deal in terms of the economic principles, and some of the history of what is going on.

Basically, the problem with keeping a consumer society going is, as your fellow countryman, the economist John Maynard Keynes first pointed out, keeping aggregate demand up. In other words, for people to be able to buy things, they have to have money in their pockets. We used to do this by making things that other countries wanted to buy. We invented pretty much every technology from basic appliances to high-tech gadgets and the world beat a path to our door.

But then our financial and corporate elites got greedy. They began to attack unions. During the late 1980s and 1990s they engaged in wave after wave of corporate raiding. That is, they would engineer a hostile take-over of a heavily unionized company, and dismember it, firing the workers and selling off the most profitable pieces and taking the remainder into bankruptcy. Since the company had very few employees, they were allowed to keep the billions of dollars set aside for employee pension funds (screwing tens of thousands of loyal employees out of their retirements in the process). They would use these funds to take over another company, over and over, decimating whole industries. The was accompanied by a junk bond casino on Wall Street which fleeced ordinary investors while making insiders obscenely rich.

The Wall Street financiers who call the shots in our economy decided that they could make more money quicker by moving paper than making things, so they agitated to have NAFTA (the North American Free Trade Agreement) passed. The idea was to ship production to Mexico, where labor was cheaper, environmental regulation was nonexistent, and a culture of corruption made it possible to keep unions from forming. Only, they found that they could do things even cheaper by outsourcing manufacturing to China and certain technical services to India. Whole factories were packed up and shipped off to China, the rest were left to rust.

Meanwhile, Mexican farmers were thrown into direct competition with cheap subsidized American corn, causing many subsistence farmers to go bankrupt, and to move to the US, where they were easy pickings companies who used them as a way of making jobs so low-paying that they were unattractive to native born Americans. Americans continued to design each other’s web pages, and manage each other’s hedge funds, financing their consumption through a combination of speculation and borrowing. Essentially, Americans were borrowing against the value of their portfolios and their homes. They rode the crest of the computer boom from 1994 to about 2001, when the dot com bubble burst, sending the high tech sector into a recession.

From 2001 till around 2005 Americans borrowed against their steeply appreciating houses. Then the market started to slow and people started to refinance. And the mortgage lending industry had all sorts of products with hidden traps that would spring on the debtor whenever he got into economic difficulty. Then the lender would swoop in, rush to foreclosure, and capture a tidy profit in the form of the home-owner’s equity. This, unfortunately, began to depress the whole real estate market, causing even solid customers to end up owing more than their property was worth. This caused more economic instability, more rushed foreclosures, and the cycle fed on itself until late 2008, when it unraveled the mortgage backed securities markets, and then the derivatives markets, the insurance markets and, finally, the banks.

Meanwhile, China made a deal with Wal-Mart, a militantly anti-union retailer that pays so little that its employees qualify for welfare. Wal-Mart bought dirt cheap Chinese goods, produced in non-union sweat shops, using child and prisoner labor and sold them directly to the American consumer, throwing American mom and pop businesses into direct competition with third-world labor. Wal-Mart, of course, got extremely rich and was able to buy protection from the Bush Administration to engage in predatory practices. When they moved into a new area, they would sell below even their own low cost until the local competition was completely wiped out, and then they would jack up the prices and make it all back many times over. (@BoBo1946 this direct competition with China exerted such a drain on US businesses that the usual cash flow problems that so plague small businesses were minor by comparison.)

This has been going on now for about 20 years, and America truly doesn’t make much of anything anymore. (We still make top of the line military goods, and we run a good protection racket, but that’s about it.) Our educational system is slipping, we are resting on our past glory, sliding deeper and deeper into self-delusion, fantasy, and debt, most of which is held by the Chinese. We now owe them between $800 billion and $1.3 trillion, and we are entirely dependent on them to buy our bonds to float our national budgets. So, any talk of tariffs or trade sanctions, or “forcing” China to float its yuan would be stupidly shortsighted, since it will invite tit-for-tat retaliation. Even putting provisions in the U.S. stimulus bill that they should be spent on U.S. made goods has to be done with discretion and care. We are still good for it, since we produce $13.6 trillion per year in GDP. But we also have a similar bill with the Saudis, thanks to two wars we haven’t paid for, thanks to our oil companies who gouged the American public ruthlessly, tipping the economy even further into recession.

Ideally, we should invent and manufacture some new product, like the hydrogen car, or cold fusion, or holographic televisions and sell these things to the rest of the world. We sell a great deal of intellectual property (Michael Jackson CDs), but that isn’t enough.

About ⅓ of the the first round of government stimulus spending went to unproductive tax cuts to mollify the Republicans, none of whom voted for the package. Another ⅓ was for infrastructure spending, like windmills, and home weatherizing, both of which have energy dividends, and cash for clunkers, which was a great success in selling automobiles, although not necessarily American-made ones. Similar programs could be directed to things like refrigerators and other appliances still made in America, but something more comprehensive is going to have to be worked out.

It is also very difficult for America to do anything constructive, since our politics is so destructively partisan. The Republicans still want to go back to the failed “free market” economics of the Bush era. Now the U.S. Supreme Court has unleashed unlimited corporate funding for political campaigns, which, if not undone, will ensure that we go back to the Republican formula of less government regulation and oversight, lower taxes, and fewer social safety net benefits (and a government by the corporations for the corporations).

The “fatal flaw” in limiting corporate power is summoning the political will to do it. Our populace is so ignorant of economics that they are easy prey to every sort of neo-liberal propaganda. And, consequently, large segments of the American population consistently vote against their own interests. There is nothing more we can do without going back to our unilateral brute force solutions, and even then, these past solutions don’t seem to be working out so well for us (e.g. Iraq and Afghanistan). We would have to become another Roman Empire, and we are just not up to it.

BoBo1946's avatar

@Zuma got’cha! Very good answer!

The_Idler's avatar

Thank you for the comprehensive answer Zuma. I knew that mostly, but not that there was such pessimism towards overcoming China’s influence in the USA, in the USA.

So are you saying that, if the US were to present an ultimatum regarding Chinese imports, the Chinese would ‘call in’ their debts with the USA?
I wasn’t aware the Chinese were in any position to do such a thing.

I was under the impression that the only barrier to sustainable domestic production and consumption was big-business’ interest in maintaining: present relationship with China, cheap Mexican labour, status quo &c.

The USA really can’t call China out on this one?

Zuma's avatar

@The_Idler No, it is in no one’s interest to rock the boat with China. And it would be foolish to do so unilaterally since the Chinese have acted pretty much in good faith (insofar as lending us enough rope to hang ourselves is good faith).

ETpro's avatar

We are doing so many things wrong, one wonders why it took so long for the wheels to fall off. We are 5% of the world’s population but use 25% of its energy.

Since the 1980’s we have been happily off-shoring manufacturing and mining jobs in the absurd belief that we would transition from the manufacturing age to the information age and show others how to manufacture. The model was the transition from the agricultural to the manufacturing age.

There are two flaws in that transition strategy, though. First, we did not transition from agriculture. It’s true that nearly 95% of the American population was involved in agriculture in our early days, and now it’s less than 5%. But we did that by automating agriculture. The 5% who still farm grow FAR more food than the 95% did in our age of agriculture days. We export food all over the world. And second, we aren’t going to be called to teach manufacturing once we export all the technology and a generation of off-shore engineers improve it. We no longer know how to do it, how on earth are we to teach it?

We also let our wage structure get out of alignment with much of the world. It is small wonder corporations eager to maximize profits for shareholders prefer a worker who is willing to face detestable conditions for $1.25 a day to one who must have 10 times that or more to work, and also requires the company to fund health care and retirement. The top 20% of our population now holds 85% of the wealth in America. That’s the truly wealthy, the executives, professionals and small business strata. The other 80% (the salaried and clerical workers and the poor) have only 15% to divvy up. Yet they are supposed to be the economic engine that runs the economy. The engine isn’t working because it is out of gas!

We can probably get our economy back to some sort of working order with deficit spending now followed by heavily progressive taxes when the recovery gets into full swing. The middle class needs a greater share of the nation’s wealth or we can’t continue to function as we did in the past. But we must begin to deal with the gaping wealth and lifestyle disparity between the US and the rest of the world. It’s unsustainable. And fixing that may involve hard, painful decisions.

YARNLADY's avatar

Outsourcing jobs for cheaper manpower, fewer safety restrictions; hiring undocumented workers instead of citizens; excessive government fee structure stymies development; new workers coming into the workplace faster than new jobs are created; workers being trained in the wrong fields; too much reliance on government subsidies and not enough free market influence.

ETpro's avatar

@YARNLADY Free market reliance is exactly what finally drove us into the ditch we’re trying to drag the economy out of now. Most os Washington, the FED, the economists getting the press all were preaching Capital Market Perfection, even though that’s exactly the concept that was in play when the last Great Depression occurred too, and the economy hummed along quite well till the market restrictions put in place in 1933 by the Glass-Steagall Act were wiped out by the Gramm, Leach, Bliley Act of 1999.

YARNLADY's avatar

@ETpro There is no free market in the U.S. at the national level. You might find some at the local levels where consumers buy directly from providers. With all the regulation of trade at the national level, free market does not exist.

Perhaps you are thinking of capitalism. The system we currently have is a variation of that.

Zuma's avatar

Okay, this question is about jobs, and what is broken that if fixed would create more jobs.

If it is something to do with taxes, what? If it is something to do with investment, what? If it is something about invention, retooling, or technology, then what? If it is something about putting money in people’s pockets, then how? What about structural inefficiencies in the American economy? How much does health care fit into long-term economic health? Etc?

Self_Consuming_Cannibal's avatar

A president who actually got the job because of qualifications instead of “to change history”. I wish Bill was back in office or I wish Hillary would’ve got elected.

The_Idler's avatar

Perhaps enforcing minimum standards for working conditions (pay, hours, safety, etc.) for all products sold in the USA, regardless of origin?

It would take considerable admin effort (though not too much), but not only would it make domestic production more competitive, it would actually benefit the people of any nation, which exports to the US, just like the Americans pretend free trade does.

Other people in the world might even begin to respect and trust the US Government.
The constant stream of bullshit, regarding how wonderfully beneficial US business practice is, for the poor workers of the world, is a primary factor in the resentment and distrust, directed toward the US Government.

I’m not saying that this would straight-up solve even a significant proportion of the problems in your employment market, but surely it is a step in the right direction… for everyone?

Zuma's avatar

@The_Idler That’s actually a good idea, but there is some unfortunate history to it. From time to time, American consumers organize boycotts of products made with child or prison labor, or other forms of coerced labor. And it generally embarrasses the company to make their shoes or handbags (or whatever) somewhere where human rights are better respected.

Unfortunately, the last time human rights was officially invoked (to create a de facto barrier to entry into U.S. markets) was during the Carter Administration (1972–80). Since then, over the objections of our labor unions, we have basically signed away most of our ability to enforce human rights standards in NAFTA and GATT. Now invoking human rights can be seen as creating an “unfair” trade barriers, and can get the “offending” country hauled before the World Trade Organization’s Court of Justice, whose verdicts are enforced by sanctions which the 100+ member nations are obliged to observe.

Since then there has been a race to the bottom which has only been complicated by our own dismal human rights record—Abu Ghraib, Gitmo, and our continuing practice of extraordinary rendition, not to mention our own deplorable working conditions, prisons and human rights conditions. It looks rather hypocritical for us (to say the least) to start lecturing other countries about their human rights violations; most notably China—which is why Hillary Clinton, didn’t even bring up the subject of human rights on her last trade mission to China. China, by the way, is extremely sensitive about attempts to meddle in its domestic affairs; and to be consistent, does not demand that other countries adhere to any minimum standards as a condition of doing business. China is often criticized for dealing with repressive regimes, but it simply replies that every country has the right to determine its own internal affairs.

There is, of course, nothing to prevent American consumers from boycotting Walmart, or forcing it to pay a living wage, but these sorts of battles tend to boil down to ACORN against the Republican Party (which, in case you ever wondered, is what that is all about). One would hope that Americans would be able to manage not shopping at Walmart out of sheer economic self-preservation, but Americans tend to be woefully ignorant of economics, and none too curious as to how their bread actually gets buttered; so they don’t take much personal responsibility for their country’s economic survival.

There was a bill in Congress last year that would have allowed shops to unionize if a majority of workers sent in notices that they would like to, instead of requiring a full-on vote (during which the company can call in professional union busters, and otherwise identify and get rid of union organizers). Not only have American labor laws not been enforced during the Bush II Administration, but the whole agency was understaffed, defunded, and demoralized by packing it with political hacks who were hostile to the mission of the agency. One watchdog group phoned in complaints of children working in meat packing plants during school hours, and not one of the district offices sent someone out to investigate.

And, as you can see from the brisk offering of ideas in this forum, Americans are not particularly brimming over with ideas about how to save themselves. It’s almost as if they think that everything is going to work out fine, just because we’re America and we seem to have muddled through in the past. It is a sad commentary that the most interested and intellectually inquisitive person in this forum is a Brit; so please accept my apology for being so harsh on you before.

ETpro's avatar

@Zuma I think I’ve got a pretty good picture of what’s wrong, but most of the American people now think like @YARNLADY even though the closer we’ve gotten to free-market economics the worse our economy has run off the rails. Also in other nations where it has been tried have gone totally to hell in a hand-basket. General Pinochet tried it in Chile and when the Russians tried it after the fall of the Soviet Union, the Russian Mafia filled the power vacuum left.

It doesn’t even make much sense from a definitional level. The argument is that government should just stand aside and let corporations do as they please and everything will run itself quite fine. But governments create the artificial entity of the corporation. They empower them with abilities and protections individuals do not have. Corporations can’t operate government free because they can’t even exist with a government to empower them.

I think Wikipedia sums it up well. “Critics of laissez-faire since Adam Smith[21] variously see the unregulated market as an impractical ideal or as a rhetorical device that puts the concepts of freedom and anti-protectionism at the service of vested wealthy interests, allowing them to attack labor laws and other protections of the working classes.”

Not the kind of a fix for jobs I’m in the market for.

Zuma's avatar

@ETpro Exactly right.

Let’s also not forget wars, they too are good for corporate profits. Greg Palast in Armed Madhouse has documented how the Iraq war was instigated by two groups of economic elites that take their turn in government through the revolving door of lobbying and government service: Bush crony oilmen embedded in the Pentagon, and a group of neo-cons embedded in the State Department.

So now that we (mostly) agree that neo-liberal economics is discredited, what kind of concrete job creation proposals could we recommend to the Obama Administration?

The_Idler's avatar

The first question is which is a more realistic obstacle to overcome?
Political weak-will WRT trade agreements/legislation (Corporate influence in government)
or
Public apathy & ignorance (Corporate influence on public)

Which is a more realistic objective?
– Obama to directly ‘reign-in’ the corporations, by basically policy U-turning WRT free-trade and laissez-faire ‘agreements’. (the hard part is appeasing/over-powering the corporate interests [including WTO, but hey, come on, this is the USA!] and convincing the public that the existing system is unsustainable and exploitative)
– Obama to directly appeal to the public, by explaining the situation and attempting to personally influence the practices of small-to-medium businesses and the consumer. (the hard part is convincing the public that the existing system is unsustainable and exploitative, and that they can actually do something about it!)

It seems ridiculous that a government has to say to the public “We can’t really handle the corporations on our own, so you’re all gonna have to pull together and make an effort.”
but that is the world we live in.

So the war seems to be one of two theatres:
Obama’s idealism and commitment vs. Corporate-sponsored laissez-faire lobbying & legislation
&
Americans’ sense of public duty vs. Corporate-sponsored ignorance and apathy

Doubtless the two have some overlap (esp. in your democracy), but where Obama should concentrate at the present time (i.e. ‘begin’) is an important consideration. I have even less idea of the details of the legislation, than I do of the depth of public ignorance and apathy, but I think identification of these two ‘theatres’ is an important strategic device.

Zuma's avatar

@The_Idler You can see the level of public interest, knowledge and involvement/commitment in this very thread. What do you think?

ETpro's avatar

@Zuma So now that we (mostly) agree that neo-liberal economics is discredited, what kind of concrete job creation proposals could we recommend to the Obama Administration?

Sell energy independence as a future cost saver and a national security imperative. Put people to work in a moon-shot plus New Deal level effort. Put the low-skilled ones to work in constructino of new nuclear plants, the smart grid, drilling for existing oil and gas, cash for caulkers and other efficviency improvement on our homes and buildings. Put the scientists and engineers to work developing the next technological breakthrough that will truly set us free from fossil fuel reliance once and for all.

Zuma's avatar

@ETpro A moon shot? Nuclear power, with all the unsolved problems it has? (Not hydrogen?) Smart grid? What’s that? What about our crumbling infrastructure? Our parks and recreation? Could you flesh this out a bit?

Any ideas about what technologies we should put scientists and engineers to work on? (I had an idea for a self-stabilizing platform that would harness energy from the jet streams, but I couldn’t figure out a good way to get the energy back to the ground.)

ETpro's avatar

@Zuma I meant moon shot as a scope-of-project descriptor. And certainly, I’m not against fixing crumbling bridges and the like.

We do know how to build nuclear plants complete cycle and keep them incredibly safe. I would be willing to bet they are as safe as conventional power plants, which do carry their own risks of explosions, catistrophic pollution release and the like.

The smart grid is a electrical power delivery system for the 21st century and beyond. It is capable of not just delivering power to consumers of it, but accepting power back from them and recording the flows in each direction for accounting. With it, solar or witd powered homes can sell power to the grid when they have a surplus, use their own power internally when at equilibrium, and draw power as needed when their own generation capability is low.

As to what technologies, the most advanced group should work on that exact problem. But there are promising areas to explore. Some types of algae can produce very efficient fuels. They need large quantities of CO2. We may be able to power an alge fuel-production lake with a coal-fired plant and use the algae for the needed carbon sequestration. Lawrence Livermore Labs just successfully tested the first step of a controlled fusion reaction. They beamed 196 high-energy lasers at a single target and raised it to 6 million degrees Fahrenheit. Had the ampule been filled with heavy water, that would have initiated a fusion reaction.

There are great strides to be made in lowering the cost and carbon footprint of production of the goods for wind and solar energy. Much of this is relatively mundane engineering and chemistry.

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