Wednesday, March 3, 2010

Political Thoughts

Political Thoughts

It is clear that the United States and probably the World is in serious political and economic difficulty. Not since the Crash of 1929 have there been such high rates of unemployment and the levels of debt are astronomical.  There are voices on the right and the left that propose various radical solutions.  But so far, few if any have faced the roots of the problem. 

The first cause of our current difficulties is the decoupling of production from local or at least national control.  Multinational corporations can locate where they will and retain the benefits of the nation in which their headquarters is located.  These same corporations have the financial clout to buy and sell politicians.  The prosperity and well being of towns and cities rises and falls practically overnight based on corporate decisions made at great remove and with little sensitivity to the impact of those decisions, except on their bottom line.  If the trend continues we will live in a corporate state and perhaps a world state within the next 20 to 50 years or so.  The alternative is locally controlled production and enforced corporate responsibility. 

The second cause of our current difficulties is simply unmanaged population growth.  Many of the social issues we face : increased violence, increased homosexuality, increased insensitivity to suffering, overloaded systems, increased demand for resources, increased pollution;  all stem from this source.  Resolving this issue will be very difficult due to religion, tradition, and natural human tendencies.  The visions of Malthus do come to mind.  In a state of nature, populations wax and wane in response to the natural abundance or scarcity of resources and predators.  Ours is not a natural state and most societies insulate their populations from natural balancing mechanisms.  Historically, war has been a frequent human response but in an age of nuclear weapons, war as we have known it is not an option. 

Both of these issues highlight the question of liberty.  The question of balancing the needs of the community against the needs of the community is the core social and political issue.  Most advocates of radical measures whether right or left seek a reduction of individual rights in favor of powers vested in governments.  In the past this has led only to totalitarian regimes and eventually to economic disaster or revolt. 

It must also be kept in mind that while most people simply want security and to be left alone, there are the Princes (as Machiavelli calls them) who want to have power and make a name for themselves.  At whose expense are these great names made ?

For my part, I do not claim to have the answers or even answers that can be implemented given current political conditions.  And yet, it seems to me that there are some practical measures that could be taken to correct the present situation. 

A couple of ‘modest proposals’ follow :

1)    A Limited Debt Moratorium coupled with a reduction in entitlements
This measure is intended to give individuals, families, and small businesses breathing room to adjust financially and reduce their debt.  At the same time, with a reduced tax base, it is unrealistic to think that we can support financial entitlements at current levels. So, the pain is widely distributed at least and does give some hope of improvement. 

Debt Moratorium : Mandate the suspension of interest on all outstanding loans and revolving credit for a period of 5 years.  Reduce all outstanding loans and revolving credit balances by 20%.  Any new loans or revolving credit would be capped at a maximum of 20% interest. 

Entitlements Reduction :  Unearned entitlements such as welfare benefits and Medicaid and all others whose sole requirement is poverty to be reduced by 50%.  Social Security and Medicare (excluding part D for prescription drugs which is really a subsidy for pharmaceutical manufacturers) would be untouched since they are earned retirement benefits.  Social Security and Medicare would also be removed from the general fund and administered as private accounts.

Although it is a partially earned entitlement, the earned income credit should also be reduced.  I’m thinking somewhere on the order of 20% to 50%.  This is based on observation and experience and anticipation of the relief that other measures outlined below would provide.  

2)    Local Reindustrialization Programs

There are thousands of buildings lying empty across the nation that were once used for manufacturing operations of one kind or another.  These could be converted to locally owned producers of things like textiles, furniture, autos, trucks,  agricultural processing – organic or commercial, and other such marketable items.  These would have three partners – the employees who would also be coowners, the municipality where they are located (limiting the possibility of their sudden removal or closure), and the Federal Government (with limited oversight and eventual repayment).  The wages and benefits offered would be lower than industry standard but there would be a profit sharing plan and the security of regular employment.  This would also make competitively priced, locally produced merchandise available in presently depressed markets.  After some years when the Federal investment is repaid, the business would be an employee/municipality operated producer of quality value priced merchandise and a source of local prosperity.

This would also provide an alternative to imports and corporate merchandise at a usually lower price. It would make demands on the workers and the city government which would also make them more self reliant and conscientious. And there is no reason why so called ‘green industries’ could not be included provided that the principle of local control is included.

   3) Actually Enforce the Anti-Trust Acts

As we have seen since the 70s and 80s, mergers mean fewer jobs, higher prices, and less diversity in the market place.  Since the 80s particularly, the trend has been for large businesses to buy and sell smaller ones to increase their dominance of the market.  This has largely destroyed the traditional small business and decreased employment.  Vigorous enforcement and a review of mergers and buyouts over the past few decades would cause some disruption in the current corporate business community but, even in the short to medium term, would greatly increase employment and market diversity.  There are limits to the economy of scale and monopolies tend to restrict the market.  

  4) Declare Energy a Strategic Resource
Coordinate and direct the activities of energy companies to insure reasonable consumer prices and the provision of national requirements.  This includes gas and oil, coal, biofuels, nuclear, and the research in progress on fusion. Make the people a partner in their operations and a regulator of and sharer in their profits. The agency responsible should be independent of the government but act in conformity with national needs.  Coupled with this measure there needs to be s policy supporting and encouraging individual and community energy independence. Let’s see more windmills and environmentally friendly chimneys – fire wood is a renewable resource, more solar panels, more steam heat in public buildings – and let’s give tax incentives for it and require the energy agency to buy excess kilowatts. This will decrease consumer costs and encourage not only national but also community and individual energy independence. 

These four measures could go a long way toward restoring employment, returning prosperity, and increasing independence across the nation.  While it is true that some areas would benefit more than others, all would benefit except perhaps the entitlement recipients but, they too would eventually benefit from the increased prosperity.  Who knows, they might even find jobs.

While there is little that can be done about over population directly, we can encourage smaller families, later marriages, the use of birth control (abortion only in extreme cases as its excessive use is damaging to health and its indiscriminate use is offensive to many religions).  We can also deport illegal aliens and build that fence along our southern border. We can also limit welfare support to three children – more children than 3 does not mean any more money or support.

Not perfect and the details will be difficult but something that certainly could help, and help a great deal.  Politically it may be impractical but then politicians may someday find advantage in it.  If you happen to like it, if it makes sense to you, have your congressman look at it, spread it across the internet, tell your friends.  Otherwise write it off as just another crackpot notion.  Certainly there are powerful interests that won’t like it, unfortunately they are in many cases the same powerful influences whose actions and inactions led to the present state of affairs.