So, you see, I’m not the only person who figures that if we don’t create wealth, we can’t get rich:
…Whatever the politics, no new stimulus should be considered unless it deals with the fundamental illness undermining the country’s long-term economic prospects. Such a stimulus would address the country’s essential problem: persistent overconsumption amid underproduction…
…Though some parts of the stimulus, such as extending health and unemployment benefits, were clearly justified, the whole program never sought to address the roughly $800 billion annual imbalance between American consumption and production.
Instead, we have witnessed a grab bag of political handouts — Chicago machine politics on a grand scale — designed to placate key Democratic constituencies. Most have gone to what my old teacher Michael Harrington described as “the social-industrial complex” consisting of the education industry, social service providers and the various government bureaucracies…
…no matter how much the conservatives complain, Obamanomics most likely will end up with results remarkably like those of Bushonomics: more consumption, less production, expanding public debt, asset inflation on Wall Street and a slowly declining middle-class standard of living. The only real difference will lie in who gets to rob the public — instead of pharmaceutical and oil companies, we get Gorite “renewable” energy traders and well-connected “green” venture capitalists.
Americans need to place a pox on both these flawed models. We need a totally new approach that focuses on key productivity-enhancing investments such as improved transportation infrastructure — new roads, bridges, ports and waterways to meet the demands of an expanded economy for a growing population. We should be looking at modern equivalents of the New Deal electrification program, the GI Bill, the Eisenhower highway and the space program.
Bravo! Nice to know that I’m not alone. Making, mining and growing things – if we’re not doing that, then whatever else we’re doing, growing the economy isn’t it. And Joel Kotkin sees something my fellow conservatives are a bit blind about – we can, indeed, spend some government money to help the economy. The difference between Kotkin (and myself) and the Obamaniacs is in the realization that shoveling money at failed banks, failed car companies and ACORN just won’t stimulate anything. All it does is pay off supporters and mask failure.
The reason I’m convinced that we are heading for a massive economic collapse – something which will make the financial meltdown of 2008 seem tame – is because we’re not building any wealth which would allow us to deal with the horrifically bad debts we’re saddled with. Debts never, in a sense, go away. Even if you stop paying them, they are still a cost on the economy as a whole – and our debts, public and private, are both massive and non-performing (as they say in the financial industry). We owe vast sums and we’re not getting anything in return for the debt – and all Obama is doing is piling on more debt without taking any steps to do anything for the economy.
We can get away with Obamunism for a while – but eventually, the bill is presented for payment. With China in actually worse financial shape than we are, I expect the bill to arrive in March, or thereabouts. It’ll come like a bolt out of the blue to all who haven’t paid attention – there will have been one or two quarters of alleged economic growth and everyone will be patting Obama on the back and even conservatives will be waxing lyrical about the resilient American economy. And then we’ll all be completely broke and absolutely bewildered. Well, nearly all of us: I won’t be.
As I drove out to Laughlin, Nevada the other day, I saw in a rock formation by the side of the road made up of green rocks – indicating a large copper deposit right on the surface. And there it was – vast wealth, just sitting there by the side of the road, a few miles outside Harry Reid’s home town of Searchlight, and nothing was being done with it. Meanwhile, the United States imported $7.8 billion in copper in 2007. Its raining soup out there, and we’re not even looking for a bowl. Anyone want to bet that the reason why we’re not exploiting the resource is because of non-economic programs and pressures? Lets put it this way – anyone want to bet that US taxes and regulations have convinced the “money” behind copper that we might as well buy from foreign sources which are not subject to American control?
This incident started up a whole train of thought in me – in case you haven’t noticed, at your local hardware store probably a majority of the tools for sale are made in China. Does someone want to tell me that the United States cannot make a wrench more efficiently than slave labor in China does? I realize that our money twits are just interested in quarterly profit margins and thus its not a matter of “can’t compete” but “why compete when we can buy from them and still get big bonuses?” – but why do we, and our government, go along with this idiocy?
I’m not advocating protectionism – I’m just pointing out the fact that if we wanted to, we could darn well make our own tools, at a lower retail cost and with higher quality, than can be done in China and then shipped thousands of miles to the United States. There’s no way you can convince me that a modern, efficient tool factory in Tonopah, NV, will be undersold in Las Vegas, NV by an inefficient tool factory in Shanghai, China. China can probably outsell us in Korea, but not in Nevada. If we put our mind to it and cease and desist these idiot restrictions on the use of our own resources (in land, materials and labor) we can compete with anyone – and, given a choice, which of us would by the $2.99 Chinese hammer when there is a $2.89 US hammer right next to it? To be sure, the Chinese can (and already do) “dump” products on us below production cost – but wise trade action can swiftly detect and deter such actions.
If we want to stimulate the economy, we can – by shelling out money to start up new factories, open new mines and bring more of our arable land under cultivation. Yes, “green” jobs are ok, too – anything which lessens our dependence on foreign oil is a good thing, but you’re not going to create 3.5% GDP growth just by making wind farms. We need to do for our selves – and in so doing, we’ll make wealth and keep it at home. That wealth kept at home would be used to discharge our debts and provide the seed for further wealth creation. “Shovel ready” infrastructure also has its worth – but much better to make new infrastructure which would make American transportation more efficient. Why our are freight trains still crawling along on tracks designed 100 years ago, pulled by 60 year old locomotive technology? Why aren’t there plans for high speed rail lines to go right down the center of our interstate highway system?
Making, mining, growing: this is the key to economic success. Obama doesn’t see it. Most conservatives don’t see it. I do – and I’m going to run with it.
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