Saturday, May 23, 2009

It's the Economy, Stupid

You'd have to be living in a cave not to know that our economy is in the crapper. Jobs are disappearing left and right; the stock market is in shambles; foreclosure rates are on the rise; and certain states who will remain nameless can't even find the funds to pay state tax returns. (We're still waiting.) You don't have to be Ben Bernanke to know that things are bad.

Now, I'm no economist (read: "I'm a blowhard with an opinion and a blog."), but it seems to me that there are some simple ways in which we should view this financial crisis. These are just a few of my opinions on the economy.

Don't just throw money at the problem.
This goes from the top-down. Instead of the federal government throwing wads of cash at financial institutions and auto makers, maybe they should try policing the greedy, multinational corporations. That and they could just let the businesses built to fail do that which they were intended (make a profit for a select few, while creating substandard products and high-tailing it to Mexico before declaring bankruptcy).

The idea of spending our way out of the hole even prevails throughout the not-so-rich, AKA 95% of us. Somehow, it's believed that spending more money, adding to our debts will be best for the economy. Isn't that how we all got into this mess? If you know that you can't afford that $300k home even though the lender wants to lend you three times that, don't buy it. Just because your neighbor has leased Hummer doesn't mean you need one as well. We will not spend our way out of recession.

Not everybody lives in the poor house.
Folks forget that there are still a select few that own most of the wealth. Actually, I often hear that 5% of our country's population owns over half the wealth. I'm sure those folks are not hurting nearly as much as your neighbor or yourself. Sure, some real estate guy somewhere lost a million dollars last year. Of course, he's worth nine or ten million, but whatever.

There is still a disproportionate amount of wealth controlled by a small number of people. I'm not saying that all of Terrell Owens' $8 million has to go to the poorest of the poor, but why can't he make $100,000 to play football so that a few people could make $30,000 a year building homes? What is Bill Gates really going to do with $58 billion? He can't give it all to education...or can he?

The Boomers are screwed.

Our parents bought into the myth that their pensions and Social Security would carry them into the sunsets of their lives. As it turns out, they're lucky if they don't have to be greeters at Wal-Mart for the remainder of their time on Earth. Don't get me wrong. I feel sorry for Baby Boomers, including my own folks. They believed in the false promises of their financial stewards in the boardrooms, on the trading floor, and in Washington. I don't know that I'll be able to afford retirement, but at least I don't have false hope.

Capitalism is fine. Democracy is fine. Together, they don't work.
Some economist or Libertarian will jump all over me for that statement, but it's true. Capitalism doesn't work without governmental oversight. You'd think that a government for and by the people would be able to keep the capitalists under control, but that doesn't seem to be the case. Once corporations were granted individual rights, our demise was underway. It takes a fool not to realize that those with more resources can afford more influence. The evidence is in the last 200 or so years. Why else would so few own so much of the wealth?

Soemthing has to give. Some sort of balance has to be maintained. Our present pace cannot be sustained.

The end of the Big Three is not the end of the world.
Now that Obama and Congress have thrown so much at Detroit, there's no way they'll let them fail. However, if one, two, or all three car makers closed their doors, someone will fill the gaping hole in the market. Without Fords or Chevys to purchase, consumers will look for something else. Here comes a Hyundai or Toyota with a suitable alternative. With the increased demand, factories will need to be built. That will create jobs and there are a few out-of-work auto workers out there who'd gladly take those jobs. Sure, $100 an hour might be out of the question, but it will be something. (Also, some CEO might not make millions of dollars for running the company into the ground.) Besides...

Buying local doesn't mean the same thing in every market or industry.
One way I see us getting out of this mess is to return to buying locally. Local food producers will become more attractive as they can cut shipping costs and provide a higher quality product. Little DIY economies that are both self-sufficient and humble are popping up everywhere, filling the void of corporate0induced hegemony. The money people spend on local businesses goes right back into the community, improving life for all.

Now, buying local does not mean that only American-made cars or something of the like. Corporations don't count as local, no matter where you live. Corporations are bigger than the borders in which we perceive contain them. Chrysler is bigger than Detroit. Anheuser-Busch (rather InBev) is bigger than STL. These corporations don't put as high a percentage of their profits into their local communities as their Mom-and-Pop counterparts no matter how many hospital wings or parks they build.

I'm OK with individual welfare, not corporate welfare.
It would really be OK with me if our government started helping people pay their mortgages, put food on the table, and provide a decent education for the people of this country rather than shell out billions to wasteful and greedy corporations. Why do we continually expect that corporations know better how to handle our tax dollars than individuals? I'm sorry but I trust that single mother of three who somehow balances her minimum wage income to provide the necessities for her kids than that corporation who wastes money on corporate jets and bonuses for executives who cut hundreds of jobs.

People regularly criticize individual welfare programs, but they don't realize that our government passes out way more money to failing corporations than we do to individuals. Skip the middle man. Give the assistance to the people.

War is expensive.
One of the biggest expenditures (both human and monetary) of the past eight years has been war. It would be way cheaper to send negotiators and humanitarian aid to trouble spots around the globe rather than tanks and soldiers. Kill them with kindness. It's cheaper.

Greed really is the root of all evil.
In the end, most if not all of our problems are based in greed. Why do some people need two houses? Why does a corporation have to dominate every other company in their industry? Why does a corporate chain have to wipe out the competition in every town?

I could go on. I could actually cite my arguments. However, this is is not the beginning nor the end of the discussion. What do you think? Am I way of base? Do you have better ideas or thoughts? Please share. Be civil. I can handle critiques, not rudeness.

(BTW-The comic above is drawn/written by my neighbor. He has a pickup truck that he keeps debris in the bed so that no one will ask to borrow it.)


jmenter said...

I think your criticism of "capitalism" has more to do with the wealthy having an inordinate amount of influence on how the political system works than anything else. By itself, capitalism isn't necessarily a problem. The problem comes when "the haves" can and do easily change the rules to favor themselves.

And I think you may be a little hasty in calling greed "the root of all evil." We all behave in a self-interested fashion. I don't think there's such thing as altruism. Greed is totally necessary and, in moderate quantities, serves us all very well. Conspicuous greed is certainly a problem (and a solvable one at that), but simply saying "greed is evil" is a dangerously gross overgeneralization.

comoprozac said...

I think the fact that we have so few people with so much wealth while others wallow in their generational poverty is directly due to capitalism. That's a problem.

And the fact that the wealthy wield so much influence is a bi-product of capitalism and American democracy.

You make a good point about greed. I agree that a little self-interest is not so bad, but I don't know that I'd call that "greed". I think there is a real difference between greed and a little ambition. I'm not sure actual greed is ever a good thing, but it is fine for people to want better for themselves