Sunday, November 23, 2008

Our Economic Crisis: Proposals For National Recovery

The spectre of an auto industry bailout is a daunting one for the country. It is at the hub of a number of industries. Its total collapse would be catastrophic. On the one hand is the argument that a bailout is a humanitarian necessity. Taken to its uncritical extreme, this extends life support to faulty product lines, obscene corporate bonuses and inefficient labour practices that have left the auto industry in a condition resembling a sumo wrestler running in the Boston Marathon.

The other extreme is the advocates of “market correction uber alles” who believe that a collapse will force a restructuring of the market that will ultimately prove beneficial. The months and years that such a correction can last can span the length of an entire childhood. I feel impelled to advocate a synthesis of the two opposing viewpoints.

I have stood at the threshold of diabetic collapse with a blood sugar level of 657. medical students peered into my cubicle with manifest astonishment that I was able to converse with them. Insulin, diet and exercise were all prescribed as a remedy. I quickly discovered that more insulin could atone for a multitude of dietary transgressions. I also discovered that this could jack up my weight and lead to other problems.

Diet and exercise are the part of this metaphor that corresponds to fiscal prudence. Upping insulin corresponds to pumping cash into an ailing enterprise. The strategy of my treatment team was to come in with insulin and a drug that stimulated the pancreas as an adjunct to treating root causes. I am now drug free and managing my sugar with diet and and admittedly far too little exercise. This corresponds metaphorically to an approach of initial crisis intervention and phasing in an adaptation to prevailing market forces.

The “market uber alles” approach reminds me a bit of Marxist purists I used to listen to back in my Trotskyist days. “Charity is petty bourgeois reformism.” they thundered. It only postpones the inevitable collapse of the capitalist system.” As I nodded my dutiful assent, the subversive thought took root in my mind that my comrades cared more about Marxism Leninism than human beings. I have since developed a belief in capitalism that is rooted in its place in the Talmud and in Scripture. But I am left after my exit from the communist camp with a lingering distrust of sacrificing human life on the altar of ideology.

At this critical juncture, I believe that the cure for capitalism is more capitalism. What is really needed is to adapt its market mechanisms to the new challenges of our time.

The auto industry has for years promised fuel efficiency and small yet safe cars. It has promised using alternative energy sources. Its behavior resembles that of a recalcitrant tippler, promising to give up drinking as soon as he empties out the liquor cabinet. We are still waiting for a mass market line of cars with decent gas mileage.

The unions continue to negotiate contracts that prohibit flexibility in deploying workers. Instead of multitasking, workers are confined to single tasks that bloat the payroll. This is far more costly than paying high salaries.

We learned a valuable lesson during the last spike in gas prices. Companies started moving production back to the US from China and elsewhere. Transportation costs actually cancelled out some of the gains from paying Chinese low wages instead of American pay scales. This is an important lesson about the role of worker’s wages in market competition. We should not be smashing unions, we should bring them back to their intended role of representing an interested party as a partner and not an adversary. The most nobly conceived institutions can be corrupted by human malevolence. Congress and labour unions provide vivid illustration of this.

There is a time to square off in ideological camps. Slavery, abortion and prayer in schools are issues where such an approach comes to mind. Saving our economy is an area where creative transcendence is far preferable. A broad consensus could easily evolve around the twin goals of vibrant capitalism and a living wage. The icon of such a movement could show a cross section of attire from working class and managerial . Its slogan would be “Partners in Prosperity”. It could offer the opportunity for ideological partisans to showcase their civility as an advertisement for their faction while working together with opponents for a common cause.

There are billions of dollars in circulation right now that could be a healing force in our economy. They could be put in service of national recovery if the direction were provided. Most investment money is drawn to investing in a product or a commodity. The strategy or economic philosophy is usually not pitched as a selling point to investors. The time has come to fill this void in the market.

A mutual fund is a financial instrument in which savvy investors invest for people who buy a share in their investment portfolio. They are regulated by law and have records which can be examined by interested parties.

A “National Recovery Mutual Fund” would be a new incarnation of this type of financial instrument. It would invest in troubled industries that are willing to employ the right mix of fiscal prudence, creativity and flexibility demanded in our troubled times. They could employ great minds of economics and articulate spokespeople to present a recovery program to concerned parties. It would be money with “strings attached”. In ideal circumstances, it could acquire a controlling interest in a company and push through needed reforms without fanfare.

Such a fund should be funded entirely with private money but regulated by the government to control abuses. It should be clearly labeled as a high risk investment rather than something that is insulated from failure.

An incentive that the government could offer would be the opportunity to write off losses from investing in this fund. Allowing carryover from year to year could make such an investment more appealing to investors.

The internet offers opportunities to buy stocks on line. “National Recovery Mutual Funds ” could be offered in attractive denominations of $10.00 and $25.00 with waiver of brokerage fees or a payment of a minimal service fee . If they were offered by various online brokerage houses, they could be a gateway to more conventional investments. Purchases could be made as easily as people now order books, clothing and auto parts on line.

Under certain circumstances, floating a bond issue might also be a possibility for those who wish to invest in recovery but at a lower risk. Refitting production lines for more profitable product lines might be desirable but financially unfeasible. National Recovery Bonds could also be a useful tool in voluntary financing of economic revitalisation.

These NRMF’s could be a magnet for talent. With proper promotion, an NRMF spokesperson could have strong persuasive powers. Policies of fiscal prudence, energy efficiency and other ideas that meet with resistance could be championed by investors who were not only promoting commodities and services but a socio economic agenda as well.

A big part of the financial burden in Detroit and elsewhere is that of burdensome pension plans. There is an alternative to shaking off these burdens with a declaration of bankruptcy. A national lottery could be used to finance services to those affected adversely by the current recession. If it catches on, it could even provide relief to corporations from pension payments that might otherwise drive them into bankruptcy.

These are all sources of voluntary financing that do not involve bloating the federal budget. They are admittedly high risk investments that are rendered more attractive by a sense of altruism. Keeping America solvent and protecting our strategic independence have an importance that needs little clarification.

Except for avowed Marxists, these ideas have an appeal that should cut across party lines. A creative reinvention of capitalism should have an appeal across the political spectrum. It strengthens capitalism and solidifies the tax base for any mission the government might undertake. People who differ passionately on hot issues like abortion,gay rights and the war in Iraq might find themselves working side by side on an issue that puts them on common ground. It could provide an abundance of “odd couple” moments as people of disparate backgrounds learn how they can “agree to disagree” while they work on a shared agenda.

The care for suffering workers that makes it appealing to the left is self evident in a “National Recovery” package. Its voluntary private funding makes it equally appealing to fiscal conservatives.

I sincerely believe that implementation of this program could lead to an economic upturn for which the Democrats could claim credit in 2010. This may well make a Republican resurgence that much more difficult. As an American, I am far more concerned about healing our economic ills and preventing suffering. There is a spiritual hunger that will always gnaw at the American psyche even when our bellies are full. As it says in Amos 8:11“Behold, the days come, saith the L-rd GOD, that I will send a famine in the land, not a famine of bread, nor a thirst for water, but of hearing the words of HaShem.”

As a religiously based conservative, I see it as my duty to strive for the alleviation of material suffering in order that people may face their spiritual selves.

Abraham Maslow, the renowned American psychologist postulated a hierarchy of needs. In his view, when man’s most basic physical needs


Click here to read my complete article on The American Sentinel
The spectre of an auto industry bailout is a daunting one for the country. It is at the hub of a number of industries. Its total collapse would be catastrophic. On the one hand is the argument that a bailout is a humanitarian necessity. Taken to its uncritical extreme, this extends life support to faulty product lines, obscene corporate bonuses and inefficient labour practices that have left the auto industry in a condition resembling a sumo wrestler running in the Boston Marathon.

The other extreme is the advocates of “market correction uber alles” who believe that a collapse will force a restructuring of the market that will ultimately prove beneficial. The months and years that such a correction can last can span the length of an entire childhood. I feel impelled to advocate a synthesis of the two opposing viewpoints.

I have stood at the threshold of diabetic collapse with a blood sugar level of 657. medical students peered into my cubicle with manifest astonishment that I was able to converse with them. Insulin, diet and exercise were all prescribed as a remedy. I quickly discovered that more insulin could atone for a multitude of dietary transgressions. I also discovered that this could jack up my weight and lead to other problems.

Diet and exercise are the part of this metaphor that corresponds to fiscal prudence. Upping insulin corresponds to pumping cash into an ailing enterprise. The strategy of my treatment team was to come in with insulin and a drug that stimulated the pancreas as an adjunct to treating root causes. I am now drug free and managing my sugar with diet and and admittedly far too little exercise. This corresponds metaphorically to an approach of initial crisis intervention and phasing in an adaptation to prevailing market forces.

The “market uber alles” approach reminds me a bit of Marxist purists I used to listen to back in my Trotskyist days. “Charity is petty bourgeois reformism.” they thundered. It only postpones the inevitable collapse of the capitalist system.” As I nodded my dutiful assent, the subversive thought took root in my mind that my comrades cared more about Marxism Leninism than human beings. I have since developed a belief in capitalism that is rooted in its place in the Talmud and in Scripture. But I am left after my exit from the communist camp with a lingering distrust of sacrificing human life on the altar of ideology.

At this critical juncture, I believe that the cure for capitalism is more capitalism. What is really needed is to adapt its market mechanisms to the new challenges of our time.

The auto industry has for years promised fuel efficiency and small yet safe cars. It has promised using alternative energy sources. Its behavior resembles that of a recalcitrant tippler, promising to give up drinking as soon as he empties out the liquor cabinet. We are still waiting for a mass market line of cars with decent gas mileage.

The unions continue to negotiate contracts that prohibit flexibility in deploying workers. Instead of multitasking, workers are confined to single tasks that bloat the payroll. This is far more costly than paying high salaries.

We learned a valuable lesson during the last spike in gas prices. Companies started moving production back to the US from China and elsewhere. Transportation costs actually cancelled out some of the gains from paying Chinese low wages instead of American pay scales. This is an important lesson about the role of worker’s wages in market competition. We should not be smashing unions, we should bring them back to their intended role of representing an interested party as a partner and not an adversary. The most nobly conceived institutions can be corrupted by human malevolence. Congress and labour unions provide vivid illustration of this.

There is a time to square off in ideological camps. Slavery, abortion and prayer in schools are issues where such an approach comes to mind. Saving our economy is an area where creative transcendence is far preferable. A broad consensus could easily evolve around the twin goals of vibrant capitalism and a living wage. The icon of such a movement could show a cross section of attire from working class and managerial . Its slogan would be “Partners in Prosperity”. It could offer the opportunity for ideological partisans to showcase their civility as an advertisement for their faction while working together with opponents for a common cause.

There are billions of dollars in circulation right now that could be a healing force in our economy. They could be put in service of national recovery if the direction were provided. Most investment money is drawn to investing in a product or a commodity. The strategy or economic philosophy is usually not pitched as a selling point to investors. The time has come to fill this void in the market.

A mutual fund is a financial instrument in which savvy investors invest for people who buy a share in their investment portfolio. They are regulated by law and have records which can be examined by interested parties.

A “National Recovery Mutual Fund” would be a new incarnation of this type of financial instrument. It would invest in troubled industries that are willing to employ the right mix of fiscal prudence, creativity and flexibility demanded in our troubled times. They could employ great minds of economics and articulate spokespeople to present a recovery program to concerned parties. It would be money with “strings attached”. In ideal circumstances, it could acquire a controlling interest in a company and push through needed reforms without fanfare.

Such a fund should be funded entirely with private money but regulated by the government to control abuses. It should be clearly labeled as a high risk investment rather than something that is insulated from failure.

An incentive that the government could offer would be the opportunity to write off losses from investing in this fund. Allowing carryover from year to year could make such an investment more appealing to investors.

The internet offers opportunities to buy stocks on line. “National Recovery Mutual Funds ” could be offered in attractive denominations of $10.00 and $25.00 with waiver of brokerage fees or a payment of a minimal service fee . If they were offered by various online brokerage houses, they could be a gateway to more conventional investments. Purchases could be made as easily as people now order books, clothing and auto parts on line.

Under certain circumstances, floating a bond issue might also be a possibility for those who wish to invest in recovery but at a lower risk. Refitting production lines for more profitable product lines might be desirable but financially unfeasible. National Recovery Bonds could also be a useful tool in voluntary financing of economic revitalisation.

These NRMF’s could be a magnet for talent. With proper promotion, an NRMF spokesperson could have strong persuasive powers. Policies of fiscal prudence, energy efficiency and other ideas that meet with resistance could be championed by investors who were not only promoting commodities and services but a socio economic agenda as well.

A big part of the financial burden in Detroit and elsewhere is that of burdensome pension plans. There is an alternative to shaking off these burdens with a declaration of bankruptcy. A national lottery could be used to finance services to those affected adversely by the current recession. If it catches on, it could even provide relief to corporations from pension payments that might otherwise drive them into bankruptcy.

These are all sources of voluntary financing that do not involve bloating the federal budget. They are admittedly high risk investments that are rendered more attractive by a sense of altruism. Keeping America solvent and protecting our strategic independence have an importance that needs little clarification.

Except for avowed Marxists, these ideas have an appeal that should cut across party lines. A creative reinvention of capitalism should have an appeal across the political spectrum. It strengthens capitalism and solidifies the tax base for any mission the government might undertake. People who differ passionately on hot issues like abortion,gay rights and the war in Iraq might find themselves working side by side on an issue that puts them on common ground. It could provide an abundance of “odd couple” moments as people of disparate backgrounds learn how they can “agree to disagree” while they work on a shared agenda.

The care for suffering workers that makes it appealing to the left is self evident in a “National Recovery” package. Its voluntary private funding makes it equally appealing to fiscal conservatives.

I sincerely believe that implementation of this program could lead to an economic upturn for which the Democrats could claim credit in 2010. This may well make a Republican resurgence that much more difficult. As an American, I am far more concerned about healing our economic ills and preventing suffering. There is a spiritual hunger that will always gnaw at the American psyche even when our bellies are full. As it says in Amos 8:11“Behold, the days come, saith the L-rd GOD, that I will send a famine in the land, not a famine of bread, nor a thirst for water, but of hearing the words of HaShem.”

As a religiously based conservative, I see it as my duty to strive for the alleviation of material suffering in order that people may face their spiritual selves.

Abraham Maslow, the renowned American psychologist postulated a hierarchy of needs. In his view, when man’s most basic physical needs are satisfied, then emotional needs claim a person’s attention. At the top of Maslow’s conceptual pyramid is the hunger of the spirit.

Most missionaries who go to Africa, Latin America and America’s impoverished inner cities bring physical sustenance and healing. A logo in the office or a well placed inspirational tract is a nod to the religious motivation of the person providing a helping hand. Christians, Muslims and Jews have all offered this sort of aid as a way to bring credit to their respective faiths.

Our current fiscal crisis is the task of the hour. It does not mean abandoning all other causes, but it is of critical importance. The compassion Americans have shown the world is sustained by our continued prosperity. Its resolution is not therefore a morally neutral issue.

I realise that my readership is predominantly conservative. I hope my ideas will resonate with liberal readers who might stumble across this article. If one of them reshapes the concepts and reaches a wider readership , then I would be overjoyed. Because I realise that the solutions to America’s problems involve reaching past my ideological boundaries.

When Ronald Reagan proposed “star wars’ technology to end the arms race, he offered to give it away to the Russians. Although it did not materialise exactly as he had envisioned it, it nevertheless marked major improvements in missile interdiction technology.

The ideas I am proposing may need to be reworked by those with the insight and education I lack. But I believe that the underlying concept is a sound one, that the American people posess vast economic power that is not being directed in a constructive manner, or indeed any manner at all.

I am personally inspired by Ronald Reagan, who offered to give away a scientific concept to an opponent. I am putting my ideas up on the internet for public consumption. If liberals bring them to fruition, that is fine with me. I am concerned about the contents and not the label on the package.

************************************************************************************************

I care very strongly about the ideas in this article. I hope readers will comment, pass this article on or even incorporate some of its ideas into their own writing. I would like to reach out to legislators who could do their part in bringing some form of thes ideas to fruition. The issue is too important to to see ourselves as spectators Sphere: Related Content

No comments: