Why is a struggling open market so hard to turn around? The answer is really quite simple: A centrally planned, … Continue reading The Mystery of the Progressive Open Market
The debt crisis is attributable to “structural” causes, meaning the way the nation’s financing is structured over the next several decades, but also to political and economic causes, meaning both the way we make policy and the way we live and experience the marketplace for trade, credit and consumer purchases. So, we need to implement policies that make serious, sustainable corrections on all three fronts.
Stabilizing debt financing requires the least expensive cost of borrowing possible, i.e. a AAA credit rating and the reputation for 100% likelihood of on-time repayment. It is unhelpful and counterproductive to indicate that the US might not meet 100% of its obligations on time 100% of the time. The long-term solution has to be oriented toward making social services solvent, and reducing the costs of debt repayment.
There are competing theories about what makes for good economic stimulus, and there are practices that work well and which … Continue reading Why We Should Have a National Infrastructure Bank
The House majority leader Eric Cantor (R-VA) recently published an op-ed, in which he argued that “If Washington actually had the discipline to live within its means over the long term, every American citizen would not owe $46,000 toward the national debt.” The rhetoric is effective, but the logic is flawed; not every American “owes” an equal share of the national debt.
The national debt is what the federal government owes in long-term interest on government-backed bonds, Treasury bonds. Long-term Treasury bonds pay out over several decades, and have (thanks to the high credit rating of the United States government) a very low rate of interest. The bonds are used to finance spending in the short term for which there are no sufficient tax revenues in reserve.
The road to economic recovery must run through major new infrastructure upgrades, innovation and development. The American infrastructure was once the envy of the world, a valiant testament to the ingenuity and collaborative muscle of a free people; now, it is crumbling [pdf] from malignant neglect, and the cynicism of our political system’s dealings with money.
Infrastructure spending was once part of the central mission of building a great nation, open to trade and competition, where free people would migrate, ship, travel and explore, according to their own free will, imagination, and opportunity. Now, that embarrassment of riches is little more than embarrassment, and the resulting confusion over how we let such a vibrant landscape slide so far.
The so-called “Ryan budget plan” —as recently as last year considered a radical, fringe proposal, even by top Republicans, but in 2011 approved by the Republican House majority as their official legislative plan for the nation’s fiscal policy— calls for eliminating Medicare and replacing it with a system of vouchers to lower the cost of buying private insurance.
The plan has already stirred a nationwide revolt in public opinion against the new Republican majority, and turned one Congressional district, not lost by the party in over a century, decidedly Democratic, despite the disproportionately Republican makeup of the interim electorate. But the ire of seniors and the non-affluent generally is just one of the perils of the plan.
We will not fall magically into a rising tide of job creation, just by depriving ourselves of services and privileges we have built into our way of life and on which our prosperity depends. And we will not create jobs by privileging those industries that are doing the least to innovate. Innovation is the American way; it is what the nation has always struggled to accomplish, and it must be the cornerstone of a new job-creation boom.
It may be that moments of grave economic pressure put grave strain on a culture’s ability to give voice to and to share a common understanding of core values. It may be that after the financial collapse that struck in 2007 and 2008, the US is facing a crisis of conscience and a struggle to regain its identity. We need to remember that we can take the reins of the 21st century economic landscape, and build the economy of tomorrow.
As civilization evolves, and science advances, and democracy effects positive change in favor of human dignity and freedom, one paradigm replaces another, and we become better at managing the problems that threaten to destabilize the human environment. There was a time when authority could use command and control to maintain order, for a time, but in our democratic and informational age, that paradigm is as primitive and unworkable as it is unjust, and our problems demand subtler, more values-infused solutions.
As the subtitle of a recent Economist report on closed industries in Italy says it, “Cartels that make life cushy for insiders exact a heavy toll on everyone else”. There is no real way around this: to profit from doing business well and providing excellent quality of manufacture and service is one thing; to pad one’s profits by coordinating market strategies with close competitors that join with one to form an exclusive cartel, boxing out the influence of stakeholders is quite another.
The Tea Party movement, which claims it is driven by a resistance to taxation, is really motivated by a widespread sense of economic disenfranchisement, that is now reaching everyone except the superrich. The populist urgency that underscores all of the Tea Party’s energy is not inherently linked to Grover Norquist’s anti-American “Club for Growth”, but the movement has no leader honest enough to openly demand progressive policy outcomes.
Instead, the popular movement has been co-opted by the establishment crowd that caters to corporate interests, foreign and domestic, and which seeks to shift the tax burden away from wealthy multinationals and billionaire investors, and toward the average American middle class and working family. While many Tea Party adherents say they are independent voters angered by corporate greed and government spending, they have routinely and unquestioningly signed up for rapacious budget reform that continues the pattern of transferring most Americans’ hard-earned household wealth to mega-corporations.
A federal appeals court has ruled that Congress acted within its Constitutional authority when it passed the Patient Protection and Affordable Care Act into law, last year. Importantly, the three judge panel voted two to one, with one Republican nominee and former Scalia law clerk in the majority, that the individual mandate is in line with Congressional authority to regulate interstate commerce.
It is the first time a Republican judge has sided with the individual mandate, in the ongoing wave of legal challenges to the law, and many conservatives see the ruling as a setback. Others say the challenge to the individual mandate will continue until it reaches the Supreme Court. But critics of that view warn there may be unintended consequences of pushing the challenge too far, consequences which might require more, not less, government intervention.