A Bold Proposal from a Keynesian Economist for America's Future.

A Bold Proposal from a Keynesian Economist for America's Future.  

   With Obama observing that "the private sector is fine" and the private sector, or at least the Republican party making it very clear that "the private sector" isn't fine, I'd like to examine why its struggling before we immediately heed to their complaints about excessive regulations and growth hindering taxes that have become an exhausted talking point and obserdly hypocritical cry to a silent majority that is tired of the scape-goating and excuses. To be honest, we need to recognize that the single biggest economic issue our nation is facing currently is really more of a demographic issue. The reality is that the baby-boomers are getting old, retiring at a clip of ten thousand per day, and past the time period in their lives where wealth accumulation is at its highest. Without the experiences of the great depression they were overall, rather liberal with their money as households. They did not experience the great depression of 1930s, rather instead an era of unprecedentant economic dominance as America became supplier of the world with Japan, Germany and Europe flatened by World War II and a third world, that well, was still the third world. They spent recklessly, were spoiled by their lifestyles and taught to think of their houses as a bank account that grows just by living in it. With wealth in hand, they prioritized maximizing profit margins for corporations by pushing free trade programs making it easier for companies to outsource jobs and manufacturing, which also allowed for cheaper household items. They were fortunate and while they took that wealth for granted, they were rational in their management of it. They were also aggressive and daring in that management and while it paid massive dividends for long period of time it exposed them to vulnerabilities that came to a head in 2007.

    The Bush administration had no interest in sharing the legacy of the Hoover Administration and as they looked at foreclosure trends, home sales and the effect on our lending institutions they acted swiftly to prop up the lending system and prevent a prolonged economic retraction, or depression. The stimulus which was passeed by the Bush Administration is defended by both Obama and Romney. It undoubtedly succeeded at preventing a depression. It was less effective than expected, however, because the lenders largely failed to do what they were expected to do with the money. They were expected to lend it back out to the public to encourage consumption while reducing rates to free up household cash flow and keep loans performing. In part, the public was spooked by the crisis and hesitant to spend and borrow more. In part, the regulations that were passed were too stringent, making it difficult for many to access lending. The policy wasn't wrong, keynesian economic models are not wrong, the implementation of them were a problem. At the end of the day, when the stimulus program was passed, the legislation failed to mandate modifications and lending with numerous complaints about a multitude of issues. It took time, and the reaction of the far right is always an all or nothing approach which is out of touch with the needs of most Americans, the policies need to be fine tuned and adjusted, refunded and expanded but to dismiss keynesian models of economics outright is to doom Americans to intense unnecessary suffering. If you have millions of dollars in the bank, then I don't blame you for disliking keneysian economics. Inflation and spending causes labor prices to increase, your relative wealth to decrease and your influence to wane. This pressure forces those with money to invest or use their money as opposed to hold it, this pressure drives economic growth. In healthy capitalism the most efficient and effective capital managers will continue to accumulate more wealth, whether there is inflation or not and will be able to benefit from a more stable society where minimum living standards and human rights are guaranteed.  We all benefit because that capital produces more jobs, better products and higher tax revenues to pay for more services and better security.

    What we are looking at is a job-creating strategy that will drive economic growth while increasing median incomes.  The overall strategy is to put cash reserves held by banks and major corporations that total close to 4 trillion in action to create jobs for the US economy.  There is over two trillion dollars in three American bank’s hands.   If lent wisely we can create twenty trillion worth of investment, enough for 200 million, one hundred thousand dollar jobs.   Now obviously those borrowed funds would not all go to new salaries, we don’t need to create that many, but if the conditions on it were to reduce unemployment rates of able bodied and minded workers towards 0% than there would still be trillions left to invest in new infrastructure, worker benefits (mandatory health, life and dental) employee education (tuition reimbursement), new stores, new factories, new offices, Research & Development, new Equipment, new software, new communication and information technologies and anything else the captains of industry see as worth while.  This spending would jump start our economy without increasing government spending and the idea is that with America back up and running its ongoing competitive advantages and economic strength will allow it to push forward and never look back.

     The key is to get these banks lending and CEOs of major corporations hiring.  Since 2 trillion of these cash reserves are in three major banks, you simply go to the CEOs of these banks and the other top 500 US CEOs and politely have them swear an oath of allegiance to the US constitution and swear them in as Commerce Officers.   They are expected to subordinate to the president of the United States and in exchange are given access to ultra low interest rate loans and a corporate tax cut to 28% with some write off revisions and a tax holiday where funds oversees can be brought back into the United States at low tax rates earmarked to help create a federal infrastructure bank and education funding bank.  The CEOs will report to the commerce secretary on a rotating schedule with quarterly meetings from all top 500 CEOs and annual meetings for the next 2000 CEOs with the deputy commerce secretaries.  CEOS will report on growth strategies, worker relations, product development, new revenues, Profits and Losses, business plans, competition and management principals.  

   America is going to maximize energy production, respecting traditional energies, while developing more wind, solar and clean energies.   An overhaul of the energy grid so that every homeowner can equip their homes with solar panels and sell energy back to the grid can be financed in part by specific loans with the banks that are paid off with the energy sold to the grid.  America should be exporting energy to the developing world.

     Organized labor should also be required to have their union leaders swear in as commerce officers.  A federal insurance plan will be made available and direct investment and lending from government will be prioritized.  The labor board and consumer protection agency will maintain the trinity of business as American commerce officers are given powers and support coordinated with the state department to help expand trade and sell products to other nations.

      In coordination with the major American appliance retailers and effort will be made to push American made products and leave no product niche left without a domestic competitor on the showroom floor.  We are going to need to start building again, and we can build here, in America, with American workers.  There needs to be more coordination between colleges and employers to figure out what type of training they need and how to provide it.  New high-tech manufacturing plants are going to be prevalent, with localized production of goods to cut distribution costs.  Parks will be reopened, the forty-day workweek will return and paid vacation and sick days restored. 

    American crafts and arts guilds will be reestablished and funded to keep Americas most creative at work inspiring and celebrating our society and its cultural achievements.  Funding will return to music, film, dance, art and entertainment.  

    High-speed cable internet will be spread across the nation with no regions left behind.  As electric car designs become more aesethically pleasing we need to diversify our fleet with heavy subsidies for electric cars, hybrid cars and vehicles run on natural gas.  Diversifying our fleet’s fuel supply will create decrease demand for oil and gasoline, decreasing the cost.  We need the gas stations to change their set up to provide for these vehicles and to help business centers expand charging centers.  Cheap credit can responsibly push our nation forward, keep us at the forefront of innovation and push us into a robust recovery where the ills of unemployment and poverty are forgotten. 

     Universal Healthcare has to be prioritized, but pushed in increments, transitioning with health vouchers for those who do not want government healthcare.  While the federal government should start by creating a federal health insurance option for those under 65 and self-sufficient or for employers looking to comply with making health care affordable, states should be left with a requirement to leave no citizens sick and state managed plan to meet those needs either by state run hospitals or by contract with the private sector. 

    America should maintain its military while growing its state department over the next twenty years with ongoing commitment to push the Middle East, Africa and South America into the modern world by advancing market liberalization and human rights.  Together we can bring America into a bold future where no one is left hungry, sick, uneducated or unemployed.   This is a realistic and attainable future, we have the ability to make this a reality but it will take a combination of individual and collective action from citizens of all classes, businesses of all sizes and industries, churches and houses of worship, city and county governments, upper and lower houses of all states and the cooperation of both Democrats and Republicans. 

 America, lets get back to work.