A little protectionism could go a long way toward solving economic crisis…

I’m always repeating myself, but I will say it again: capital (or business) knows no patriotism.

I’m glad that President Obama has decided to slap a hefty tariff on cheap Chinese tires that have flooded our market.

But wouldn’t you know it? U.S. tire companies don’t like that. That’s because they are the ones who manufacture those cheap tires – in China. They are the ones who closed down factories in the U.S. putting millions of workers out of work.

I was at the library yesterday and read a Wall Street Journal editorial decrying the tariff as unwise protectionism. Apparently the Journal cares not whether people have jobs in this country.

Yes, I know the old argument that protectionism is what led to or exacerbated conditions that created the Great Depression. And strangely enough Al Gore, usually identified as a lefty and no friend of business (even though he makes money or made money from hedge funds and even a mine he owns, I believe), used that anti-protectionism argument against the pretend populist Ross Perot all those years ago. You know, that supposed business guru who decried big government but made his fortune by securing contracts from big government. But anyway, apparently the Journal is in agreement with Gore on the protectionism thing.

Hey I like economical tires just as well as anyone else. But I like safe tires too. Do you want your loved ones, not to mention yourself, flying down the freeway on unsafe tires?

Protectionism would not be good if it only served to protect producers of inferior domestic products when better quality could be secured from outside our borders. But the key is to have safety and quality standards and enforce them.

Also, world trade is a fact of life and a good thing. The U.S. would not want to put up a wall against all imports, if for no other reason than it would then suffer retaliation with barriers against its exports.

But at the same time, U.S. industry cannot be expected to be able to compete with low wage and even slave labor abroad.

The key is to have reasonable protection and for our own industry in a team effort between workers and management be competitive on the domestic and world markets. Where we can’t beat the competition on price, surely we can beat it on quality.

And as far as I can see it, incentives in law that encourage American-based companies to produce products outside the U.S. borders and then import them into the domestic market should be ended.

As complex as our economic problems are, how can one argue that increased domestic employment would not almost instantly solve the major part of our economic crisis?

P.s.

Still not mobile with the blog yet and I have to go back out on the road — but thanks for any comments and stay tuned and as our California governor would say — I’ll be back!

It’s a great life if you don’t weaken, and is democracy workable?

Once when I worked as a newspaper reporter/photographer I was doing a photo-story about an old rancher who still drove his cattle through the mountains between winter and summer ranges decades after nearly everyone else had turned to using trucks.

As the bawling herd of cattle broke out of a stand of trees into a clearing and the dust flew, he came riding right past me, turned his horse toward me and grinned, and said: “it’s a great life if you don’t weaken.”

That was more than 30 years ago, but I finally think I can appreciate what he was saying.

After being laid low by cancer and losing my ability to make a living and now, at least for the time being, being able to go back to work at my occupation of the past decade and more, truck driving, I can say with understanding that it is indeed a great life if you don’t weaken, and it’s a great life if you do weaken but get back your strength.

Related to all of this and the blog I am doing right now, my sister called last night and said she had not been able to get a hold of me (she did not have my cell number, but she did manage to find my wife’s finally) and noted since I no longer was doing my blog she did not know what I was up to.

I reluctantly had to drop my blog postings for the most part for the past several weeks because I have returned to work and have not had the time nor the energy nor the capability to blog each day as I had been doing. As I have noted previously I am trying to get my blogging system mobile so I might be able to resume more regular blogging.

Because the truck I am currently driving does not have an operable radio (the head mechanic tells me he is ordering one) and because newspapers do not seem to be a readily available or even affordable and because of time constraints I have been in a near news blackout for the past few weeks but have caught up a little since returning home for a day or two.

The last time I blogged I addressed the continuing health care debate. I don’t want to say much more about that other than I now think President Obama would do well to just push through a package that would ensure that no one is not covered, and some might argue that such is already the case. I would not argue that, but the issue is so divisive, that I think he would do better to move on and work harder on the economy and resolving just what our strategy should be in Afghanistan.

And I now read that so-called conservative columnist and TV pundit George Will has come out against our continued involvement in Afghanistan (I read his column). Could this be the equivalent of the Walter Cronkite moment in Vietnam? When Uncle Walter went there and suggested it was hopeless that seemed to doom the whole project.

Will uses big and often obscure words and phrases and analogies and seems a little more intellectual than your down-home ordinary reactionary type conservative and not quite as devious as your ordinary neocon who uses his or her education to excite and stir up the more ignorant or not so informed masses, but he is conservative and his position could give the right the tools or ammunition to back out of what might be a losing proposition. And wouldn’t it be weird if the right turned out to be anti-war and the left pro.

Actually, I think that in mainstream or at least Main Street America, except for those who have family members directly involved, the attitude is more one of indifference to the war, except that it is assumed that you either support Team America or you don’t.

And personally, even though I think our wars since WW II, the big one, wrapped up a few years before I was born, have been folly, I do think that if the nation decides to go to war (and we have) then the only object can be to win, and winning means complete defeat of the enemy and unfortunately at least temporary occupation of the conquered lands. If we cannot or do not want to do that, then we should not be engaging in war.

And then the issue of the Obama back-to-school speech where many parents reportedly want to forbid their children from listening and many schools are going along. So we are teaching our children to only listen to things you or your parents agree with. So much for democracy, critical thinking and open debate. And besides, it is my understanding that the president was only going to urge children to study hard and get good grades. And I guess originally he was going to ask the children what they could do to help him. And that seemed political. We need to protect our children from politics.

Sometimes I wonder how practical democracy for the masses is. Maybe that phrase I heard attributed to some college professor years ago was accurate: “the masses of asses”.

Hate your job? Watch the dumpster divers…

Hate your job? Don’t like the working conditions and think you are not paid enough?

Watch what I watched a few minutes ago and you might change your mind.

These days, I have read, it has become a status symbol just to have a job – any job.

I was getting something out of my car in the apartment complex where I now live (we had to downsize from a house to an apartment – we like it though). A young couple was dumpster diving, gathering all the recyclables they could in plastic bags. The guy said hi and told me “it’s a rough way to make a living”. While I was out for a morning walk a few days ago I had seen an older man and a younger man doing the same thing, dumspter diving, that is.

You could say, oh well, people make their own life choices. But really, especially in this economy, it is only by the grace of God, yes and maybe some decisions you made along the way, and luck that you are where you are now.

I truly think that as a nation (a world?) we are in another Great Depression. It may not be as bad as the last one or, in fact, it may be worse. But a lot of people whose lives have not been terribly affected yet, and especially that insulated class we call our leaders, don’t realize the misery much of society is going through.

On a happier note and related to all of this, I am back at work again truck driving. Unfortunately I am not at my last job – I had to go back to a previous job and am making half or even less than half as much as I made in my last job. But I’m not complaining. In fact, I am hopeful that I can keep working, and that will depend on two things: the economy, and my health.

For my regular readers, I had blogged the other day that I would be off the web for awhile because I was on the road. I’m back at home for a day and a half, but it’s back on the road tomorrow.

The optimists (the Republicans) say that if there is15 percent unemployment that it is not bad because that means 85 percent are working. Well without going into all of it, I doubt whether the statistics accurately reflect the real situation – they are at best an indicator. And the indication is that society is in turmoil.

I noticed a lot of businesses along the road boarded up. I was going to stop at a café I used to stop at out on Highway 97 in eastern Oregon, but it was no longer in business.

Stay with me here – I’m not skipping to another subject: I just read a news story that said that Iraq war veterans now in Afghanistan are finding the enemy there fiercer.

It’s an all-volunteer force now – kind of like a mercenary force, and I’m sure they all feel happy to at least have employment. And they seem to be quite brave.

But maybe our leaders need to rethink this whole thing. We’ve already leveraged or indebted ourselves to the tune of a trillion dollars or more to fight in Iraq, which we did not have to do, and now to fight in Afghanistan where our goal is illusive. And Afghanistan has been resistant to invaders through the centuries. Maybe in some broad geopolitical sense there is a rationale for fighting there. But in the real world of economics I am afraid it is going to bankrupt us.

If my job and I hold out I won’t have as much time to blog and pontificate or bloviate (maybe), but at least I will be part of the world again, and I do plan to continue this blog and may blog quite often when I can upgrade and get more mobile with it.

Raise tariffs, re-tool America, lower retirement age, and go for universal health care…

I watched Charlie Rose last night and heard Bob Woodward say that President Barack Obama has not really been tested by his own crisis yet. He said that he did not know what crisis might be in the offing, but perhaps unemployment might be it. And today I read that unemployment has reached 10 percent in 15 states. I know it is higher than that in my local area, and maybe in yours. If unemployment remains high, I think the Obama administration will be seen as a failure. Actually we are already in an unemployment crisis — so let’s see how Obama handles it.

Raise tariffs and provide tax incentives to U.S. industry that employs people right here in America, lower — not constantly raise — the retirement age to increase job opportunities for younger folks, and relieve businesses of providing costly health plans and thereby at the same time free up workers to more easily go to better or more suitable jobs by providing some type of universal health care scheme not tied to employment.

And so the doctors, and others, will not gripe that government bureaucrats (as opposed to private health insurance bureaucrats?) are dictating health decisions, let doctors serve on public boards to oversee the government-guaranteed health care. Notice, I have not written “government-sponsored”. Actually I assume that under any scheme to guarantee that everyone has health care coverage there will be government funding.

How about those ideas to put America back to work and get the economy going?

And while I don’t want to just concentrate on health care, I can see from my own personal experience that health care rules so much in our lives (it’s the cost and availability).

So I will address health care and then go back to some of the other economic recovery ideas.

The only way I can see that there is ever going to be health care for everyone is for the government to be involved, the free market can’t seem to do it.

I watched part of a documentary on PBS some time ago about how other nations handle health care, but it was kind of hard to follow or at least remember, except that it seems to have a lot to do with attitude of the public. For some reason maybe the rest of the world is just crazy, but they see a role for their governments to serve the interests of their citizens. For all the need and talk about health care reform in this nation, I sometimes get the idea that the general public is not into it as much as one might imagine, that is until something bad happens in one’s personal life, but then you’re so mired in your own mess, it’s hard to see the forest for the trees. But if the public really cared as much as it is reputed to, I think we would have had reform long ago. I keep hearing that Teddy Roosevelt ( a Republican – a progressive one) pushed for some type of national health care. That’s a century ago.

I’m extremely surprised the business sector has not pushed for national health care, seeing as how providing health care coverage for employees is such a major expense. And if employees don’t have coverage they will eventually be less productive and certainly it would seem more vulnerable to worker’s comp claims, which really can cost employers a lot.

Right now with so much of the work force out of work, huge numbers of people are without or soon to be without health care coverage or are trying to figure out how poor they have to let themselves get to become eligible for government programs.

Health care has become so expensive but is so necessary that it has become one of the most important, yet hard to meet, requirements in life, darn near beating out food and shelter.

Unless you have the fortune required to pay out of your pocket for all health services you might need, you generally have to join together with others in some type of group plan. So why can’t virtually the whole nation join together as a group? Yes it is going to cost, and everyone should have to pay a fair amount according to their means. And the amount of taxes raised for health care cannot be unlimited. So, yes, that means that decisions as to what is covered and how much the insurance will pay will have to be made. They always are, even in private insurance.

Taxing the rich (and who figures out what rich is?) to pay for health care is a bad idea. Social Security, the one program with “social (ism)” in its name that seems to have near universal support or at least acceptance, was designed so everyone (almost) pays for it and everyone is eligible and everyone has a stake in it.

A doctor who writes a column for my local newspaper said he dreaded any type of public option because the government would be telling him how long or what kind of treatment he can give his patients. Not any more than private or so-called group insurance does. And no one would tell him how long he can spend with a patient. That is up to him. He’s talking about his reimbursement. He can spend longer with his patient than the reimbursement covers (the government or other insurance entities only limit the money, not the time), and he can charge the patient the difference (and that is what is often done). Whether the patient can pay that extra amount is always in question (and do doctors consider themselves mere hourly employees?). And it might seem nice to compare the medical care market with any other consumer offering, but, you know, there is just not much competition. In fact, a lot of doctors do not accept new patients.

There is a concern that the number of family practitioners is dwindling because there is just not the money in the field there once was (still better than when they used to accept chickens from farmers). Maybe there needs to be more incentives to create new family practitioners, such as subsidized training for promising students. And maybe if the private sector cannot offer enough services, there needs to be government clinics staffed by well trained doctors and support personnel.

Such clinics would have to be well funded, because if not, you get the stereotypical zoo.

And then there is the problem – who wants to go to a cut rate doctor?

I got off the track on this medical thing. I was really wanting to put another pitch in for the re-industrialization of America. I know all the learned economists and political historians will tell you that raising tariffs is “protectionism” and protectionism is a bad thing because it leads to retaliatory protectionism from other countries and stymies world trade and leads to even more economic hardship and that there is precedent that proves it – the Smoot-Hawley Act of 1930 and the Great Depression. But that notion has been brought into question by some. And besides, that was then and this is now. I love history, but we live now and maybe things are slightly different today.

What so-called free trade has brought us is unbalanced trade where the U.S. competes with nations with a much lower standard of living and it continues to drag the U.S. down. Free trade was sold partly on the idea that other nations would prosper and come up to our standards. And I have to admit that in my ignorance I once thought if something can be made cheaper elsewhere, so be it, I’m generally for it. But there is such a thing as buying value (something that is hard to find these days – except in foreign cars), and there is such a thing as keeping the wealth in one’s home country. In our own greed we may have been tricked into giving up the store by becoming a nation of bargain hunters rather than a nation of those who produce or support in the production of quality products  and who share in the wealth that the demand for quality brings. Developing nations may develop, but they also may surpass us while we are not paying attention.

And even though a lot of money is made out of war, our current wars are a net drag on our economy and it is morally wrong to base our economy on war anyway. We should work to get out of war situations as quickly as possible and avoid wars when we can. And we are finding out that in today’s world rapidly moving events all over the globe can cause us to be overextended easily.

Kind of a scatter shot approach here. But just some thoughts.

P.s.

I heard someone mention on a TV news talk show that even with all the hubbub about whether a health care plan will make it through congress this term, even if it did it would be five years before anything went into effect. That’s absurd.

I still think everyone is trying to make this whole thing too complicated. Complication is not what we need. And it is hard to shop for health care, especially when you need it (think about it).

Just expand Medicare for those who cannot afford to pay for private plans now on the market. The market has no interest in providing health care for those with no means to pay. In fact, left to its own devices, the private health care industry would avoid offering coverage to anyone who might actually want to use it.

Right and left seem to have conspired, perhaps unwittingly, in economic collapse…

By this time I’ve forgotten what the big bank bailouts were all about or at least how they were supposed to operate.

I know I did hear along the way the canard that banks were forced to take government money and the strings that went along with it. Maybe I have it wrong, but I don’t think anyone was actually forced to do so. In mid October, when Bush Jr. was still president, then U.S. Treasury Secretary Henry Paulson and other government officials sat down with some high level bankers and told them this is the way we are going to do this, and they were ASKED to sign on the dotted line. They all did.

(My source: http://online.wsj.com/article/SB122402486344034247.html )

But had any of the participants not wanted to play that game, certainly they could have just said, thanks, but no thanks, we’re good.

They were not good, though, and they knew it. The bankers were facing bankruptcy, and had men still worn hats, they would have been literally hat in hand, but they were figuratively hat in hand. So they signed.

My own opinion is that it should have never come to that. The big banks should have been allowed (forced) to go insolvent. Bankruptcy and/or the federal banking rules (as you can tell, I am not versed in these subjects, but who is?) would then take over. Probably not a pretty picture, but is it a pretty picture now? And have we not been forced to throw billions of public dollars at these institutions? And has not the government had to borrow billions from China? And will not the taxpayers who fund all of this simply have to end up paying interest to borrow their own money back?

And yet, the banks are still calling the shots. The Wall Street Journal reports (I get this indirectly off of a journal report carried on Yahoo online) that in the recent so-called stress tests for the big banks the government bent to the demands of the bankers and toned down their capital requirements, even though the bankers still think they are being unfairly treated. And now I forgot what the penalty is for not having enough capital. The big banks are “too big to fail” the government has already told us, so I guess we would just have to borrow more money to give them so that they can eventually loan us the money back at interest.

People that really understand banking probably won’t be reading this blog, and by chance if any readers who do understand it all read it they might laugh at my naivete. But I challenge them to think hard and then answer that if in reality I have not pretty well summed it up, albeit in oversimplified terms.

Where were the conservatives we hear so much about when they should have been railing against all of this? Well, yes, I know that many of them complained, but their complaints were too full of talk on side issues such as gay marriage, co called “pro-life” (anti-abortion), family values, when their message should have been a well thought out and reasonable and sober assessment of every-day economics and the basics of capitalism and free enterprise.

I think many of the conservative voices were spooked by the idea that the whole economic system could have indeed come crashing down and that all of the king’s horses and all the king’s men would not have been able to put Humpty Dumpty (the economy) back together again.

The Republican presidential candidate tried in vain to appease the conservative element of his party, but perhaps as a campaign ploy to show he was “presidential” in a crisis, or perhaps out of real concern, remember? he temporarily “suspended” his campaign and rushed back to Washington to take part in the bailout – so much for conservatism.

And since the conservatives had no coherent alternative, except to vote no (a good start, but there still has to be a well articulated alternative to catch the public interest), they ceded the job of economic repair to the left-of-center crowd, which strangely enough at first was led by a faux conservative, none other than George W. Bush (to the extent that carrying water for billionaires is conservative, Bush was conservative, but that is all).

If you’ve read this far you might likely come to the conclusion this blogger thinks of himself as conservative. Not really. I stick to middle of the road. But while I support government involvement for the well being of its citizens, I am not so supportive of a government-run economy that seems too socialist in nature or of a too cozy relationship between government and business that seems almost national socialist (NAZI) in nature.

Just like left and right resemble each other at the extremes (totalitarian government), I think our current economic crisis can be to a large extent blamed on the extreme left and right who perhaps unwittingly conspired together to use government for their own ends. An example, the extreme left wanted to put every citizen in his or her own home, regardless of income. The extreme right wanted to sell them that home (with the backing of the government).

Re-industrialization could save America; time can save Republicans…

While I am not a Republican and doubt I ever could be, I am thinking the GOP might find its salvation if it can just have some patience and it probably wouldn’t hurt if a few of its leaders didn’t feel they had to kowtow or at least walk on egg shells around the talk show blowhards that give it such a bad name. They already have accepted Bush Jr. as a bad memory, that’s a good first step on the road to salvation. And maybe they ought to talk Dick Cheney into going peacefully into retirement.

While I along with most folks hope the nation’s economic ills will improve soon, I think reality is that while there will likely be improvements in some areas there will also be much discontentment – cue the Republicans.

And maybe we don’t really want to use our tax dollars to guarantee warranties for domestic autos but at the same time cut aid to the needy (trouble is the Republicans probably don’t want to use tax money for warranties, but don’t mind cutting the aid).

While President Obama seems like he can’t lose right now, over time some of his program will wear thin – again cue the Republicans.

I didn’t jump on the bandwagon and try to assess President Obama’s first 100 days, but, belatedly now I’d say he certainly has faced the most pressure at one time of any president of the United States in my lifetime: the worst economic disaster since the Great Depression, ongoing wars in the Middle East and terrorists close to grabbing nuclear weapons in Pakistan, health care that is becoming costlier and less available to the populous, global warming (or at least some type of extreme environmental change), and a possible pandemic.

But for the most part he has come through with flying colors. He is calm, cool, and collected. He gives press conferences and to my ears his answers seem well thought ought and reasonable whether I agree with all of his points or not. He is able to use clear English sentences and is not given to goofy looks, malapropisms, or deer-caught-in-the-headlights moments. He did make an unfortunate reference to the mentally challenged a while back on the Jay Leno show while perhaps acting a little too glib and cool (maybe presidents don’t need to be on late night TV).

I agree with Arianna Huffington, for someone who has done such a good job so far on so many things it is dismaying that he is bungling in his bailouts, that is to say he should not be bailing out banks or big business.

I mean billions to Chrysler and what do we get? Bankruptcy. We could have had that without billions in taxpayer dollars. We want to preserve our domestic auto industry but to do it Chrysler has to make a deal with Fiat of Italy.

At least saving the auto industry has something to do with preserving jobs.

The big bank bailouts? All they seem to have to do with is throwing money down a rathole. I still say let the big banks fail. Something will take their place. Why doesn’t the government just cut out the middle man and loan money to businesses and individuals? (not forever – just in the short term.)

As we all know, there are thousands of relatively small banks around the U.S. that acted like traditional bankers, extremely cautious with their money and did not get into trouble. Why can’t there be newer large banks, if they are needed, to replace the thieves and greedy devils who got us into this mess in the first place?

President Obama says he does not want to keep running the car companies and that he does not have the power to get the banks to do what he wants, at least not right away.

I say quit trying to run the car companies Mr. President; you have way too much else to do. And you do have power over the big banks because they would not be in business were it not for the generous giveaway bailouts of taxpayer money begun by George W. Bush and continued by you. Tell them either do what you want or you cut off the money and demand what you have given them back (although the latter is problematic).

From now on out let’s stop this hideous bailout program for private enterprise. While the bailouts may seem by some a means to save private enterprise they are in fact the seeds of destruction for private enterprise.

And this may be the answer the Republicans are looking for. I think they need to calm down and stick to their supposed free market principles and let the cards fall where they may. Hyper inflation along with a continued stagnant economy seems likely to be in the offing (although I certainly hope not). Get your act together Republicans and come up with coherent and acceptable programs to counteract this disaster. Just saying no and calling the Democrats “socialists” will not suffice.

Make your program or proposed program known and when things get bad enough, the electorate will turn back toward you, realizing they didn’t want so much socialism after all.

And lest anyone get the wrong impression about what I personally think, I will say right here and now that both parties have accepted forms of socialism for decades and so do I. But eventually there is a limit, just like there is a limit to free-wheeling capitalism (we reached that limit round about last September).

The independence and flexibility true private enterprise presents is eroded by the artificial element bailouts present in what should be a natural market of supply and demand and success or failure dependent upon business expertise rather than the generous hand of Uncle Sam, who will not be able to be generous once the money is gone (China will not be able nor willing to support us forever).

Rather than fund Wall Street-type big bankers and auto makers and others who have failed to make good business decisions, the government should be rescuing, lending a helping hand, to those citizens in need – not necessarily on a lifetime permanent basis, but on an emergency basis. But the government coffers to enable government to come to the aid of the citizenry are being depleted by the profligate and shortsighted ways of the business elite who use their lobbying powers to extract as much out of Uncle Sam as they can before the well runs dry.

Of course the political power of the United Auto Workers has played a big part in getting President Obama to work so hard to salvage as much as he can of its memberships’ jobs too. Now the UAW is taking a 55 percent ownership stake in Chrysler. Hopefully at least that will give its members incentive to help operate a lean and mean machine that can survive tough competition without more government aid.

Saving jobs is a good thing, but how far can the government go? Will it step in to save your job?

What we need is something that probably cannot be done via politics, at least not directly. We need a new attitude among those in business that says that their mission, aside from the obvious one of making a profit, is to produce products and services for a sustainable economy that will keep our nation strong for our generation and the next generation and for all to come.

We’ve gone too long on the notion that quick profits and making money solely through speculative bubbles is the way to go. We need capitalism, but regulated capitalism. We do not want to smother ourselves in total socialism, which stifles the very soul of a nation and each human being.

Yes, we do need to energize the economy through new green energy sources, but we also need to re-introduce ourselves to the industrial sector as a whole. 

While researching for a separate transportation blog I do, I was dismayed to read that a big truck manufacturing executive predicted that partly due to the current recession and the lower returns his industry is seeing it will likely move all production to Mexico or elsewhere where labor is cheaper.

Personally I think that is an unpatriotic attitude on the part of industry. Any industry that moves out of the country and then tries to import its products back in, all the while enjoying the benefits of the American taxpayer, to include legal protections and free-world defense, should face a strong tariff for those goods.

I am not so sure that free trade is what it was cracked up to be. It seems kind of a lopsided deal to me. We are cutting our own throats in the process.

The socks, the work shoes, the jeans, the shirt, and the cap a truck driver wears and the rig that he drives could all be made in the United States. More people would have jobs and there would be more freight to haul. Right now fewer people have jobs and there is less freight to haul – although granted a large portion of what freight there is comes from overseas.

Our elites thought they were clever when they said we could be a service economy, shut down the smoke stacks and live clean and not get our hands dirty. We shipped our jobs overseas and now have a lot less to do here. And we will not be able to continue to pay ourselves to stand around and do nothing, even if we do go to more socialism.

World trade of course must continue to be part of the equation. But what we call “free trade” ought to be replaced by “fair trade”. Other nations heavily subsidize their industry and many do little to nothing for their citizens who must endure terrible working and living conditions. As for competing with modern industrial nations, that should not be a problem.

Re-industrializing alone will not solve the problem I realize. Germany, for instance, is a major industrialized nation and it is suffering from the worldwide recession and is facing major unemployment and for the first time in decades its industries and skilled workers are facing doubts about the future.

Unfortunately, boom and bust seem inherent in capitalism. We need to be ready for the boom.

The problem is really all about how we divide up the fishsticks…

While on any given day with all the bad economic news I am prone to think that the situation is hopeless or at least that we will be in this recession (depression?) for a long time, I also realize that the world governments, particularly the richer westernized democratic ones, probably have the power to save us all.

(I know, conservatives will pounce on this and remind me that “government is not the answer”.  And as a middle-of-the-roader I will remind them back that no government or anarchy is not the answer either. We can maintain our freedom and at the same time cooperate with each other through government to maintain some type of order.)

Overall there is no shortage of food and we have not destroyed our planet yet (the fact that Eskimos in Alaska are being flooded out due to a melting of the polar ice cap notwithstanding)  and there is no shortage of work to be done. And as far as a lack of money or too much money owed, one must keep in mind that there is no intrinsic value in money, especially since paper money or computer accounts do not represent some specified amount of, say gold.

In an introduction to economics class I took we had a text that used hard-to-understand economic terms but also had simplistic but probably quite accurate explanations as well. It gave a little illustrative story about the nature of money. As I recall, it basically told of an island (this is fictional, of course) where the natives traded fish as money and then moved on to trading fish sticks because they were easier to handle and could be stored over time. The king kept the fish sticks in his bank, but then there was a fire and all the fish sticks were destroyed and all the islanders were in a panic because they thought they were all broke. But the king said not to worry because he would issue paper representing fishsticks and they could trade back and forth just as before and that he would by his authority guarantee the soundness of the paper fishstick currency (this is my recollection of what I read in Economics, the Science fo Common Sense, by Elbert V. Bowden, copyright 1977).

As I have blogged previously, I along with a lot of others grew up hearing and reading that a government could not successfully simply just print money based on nothing. It had, for example, been tried by Germany in the 1930s and failed miserably with a haus frau having to push a wheelbarrow full of marks to the bakery to buy a loaf of bread. In more recent times, people in Zimbabwe had to hand over millions of their equivalent of dollars to buy a loaf of bread.

But today in the United States of America our government is essentially printing make believe money which represents no more than the full faith and credit of the USA. And people still want dollars.

Part of the value of our dollars is based on money our government is borrowing from countries such as China and then giving it to the Federal Reserve to in turn give it to the banks who in turn loan it to businesses (or are supposed to).

I realize that anyone who is learned in economics realizes that I am already in way over my head here, but if you can show me how I am wrong, go ahead and comment at the end of this blog.

But really money is not bars of gold or silver or fish sticks, it has become a device we use as kind of tickets or coupons to divide and share our resources. In our semi-capitalist society we operate on the notion that the dividing is not done necessarily on an equal basis but a basis determined on what we do for each other. If you can do more for others than the next guy you have created more value and you get more coupons or tickets or dollars. But in our benevolence we also dole out fishstick paper to those who may not be able, temporarily or permanently, to put forth effort to create value.

If ever there was a pure dog-eat-dog capitalist society with no social safeguards or socialist type policies we have not had one in the USA since the at least Great Depression of the 1930s.

With Republican rule we did our best to move away from too much socialism (maybe) and promote more capitalism, but strangely it ended with Republican President George W. Bush unexpectedly in a financial panic moving our government to some form of what looked like national socialism (not completely unlike the Nazis if the 1930s, as far as the relationship between the government and big business).

And now the Democratic President Barack Obama has taken it a step further, essentially nationalizing the banking industry and the domestic automakers (minus Ford so far).

Some ultra conservatives might want to go back to a system in which some men simply put in a day’s work for a day’s pay and others who had saved up capital lived off the profits of their businesses and the interest they made on their capital and where for those who because of lack of talent or health could not make it depended upon the charity of churches and family.

And I am not going to say that what I just described in the previous paragraph is completely undesirable, but I will say that society seems to have decided long ago that it was not completely comfortable with that approach.

What we have in the USA now is basically an economic system based on capitalism but with some elements of some form of socialism, and we have a democratic republic for a government that incorporates some socialism, especially in terms of an economic safety net.

Right now our system has been severely damaged and we are trying to fix it. I think we can because in the end it is always a cooperative effort and I think that even if we disagree wildly with each other on the finer points of how our system should work, we have thus far agreed on preserving our nation and the ideals of individualism and freedom of expression and freedom of the pursuit to life liberty and the pursuit of happiness.

Now if we could just figure out how to divide up the fishsticks….

P.s.

Please view my German-American blog at http://vonwalther.wordpress.com

Over supply, under demand for cars; let businesses and banks go bankrupt…

As I take my daily walk down the street I often see cars and trucks with for sale signs on them parked along the curb or in vacant lots.

I wonder why our government has seen fit to get into the business of selling new cars (the auto bailouts and the Treasury Department guarateeing warranties off all things) when so many are shedding the ones they have, but can no longer afford.

I am not at all sure there is much of a market for new cars. We may well have an over supply already. Of course a lot of people would likely prefer to have a new car but cannot afford one now with the recession (or depression).

It seems like the market place should determine the fate of the auto business.

As to all the new incentives, such as offers by the auto companies to make your payments should you lose your job, extended warranties, and equity protection, well that is maybe a good deal, but the buyer surely pays a hefty price at the other end of the contract. It is a big insurance policy. I would say that if you expect you might be losing your job, now is not the time to be purchasing a new car. As to the warranties and equity protection, if the American manufacturers had been making superior products, they would not be necessary. Maybe the era of planned obsolescence and making the big money in parts and repairs is coming to an end, hopefully.

And don’t get me started on the repair con jobs. I went to my foreign car dealer to get my door fixed and found out the guy wanted me to sign on the dotted line to just look at the problem (minimum half hour labor) and at the same time he is telling me that they likely would not be able to fix it. I refused to sign, so he looked at it for free and told me he could not fix it. I took it to a body shop and they fixed it in five minutes for free (I had done business with them previously). I’m no mechanic, to say the least, but I was a truck driver and knew from experience that adjusting a door that won’t open and close properly is usually about a five-minute job (unless there has been major damage). What I am trying to say here is that most of us go into auto repair places and get ripped off because we have little idea of what they are doing (to us).

But even though I have a negative attitude toward the car business – oh and one more story: many years ago I haggled with a car salesman who claimed he was going to give me a super deal on my trade in that no one else was willing to give. But when I suggested that he was simply tacking more dollars on to the other end of my contract he sheepishly admitted to it.

However, back to the auto business itself: it is important and I have no doubt it will survive. I think it could have done so without government help. It might mean different people running it, but where there is a demand for a product, certainly there is a viable business opportunity. As I have written previously, one of the big mistakes of the domestic manufacturers was to not be flexible enough to meet changing demands in the market place.

….Just read a blog by a respected economist – Pulitzer Prize winning one – who said what I and so many others have suggested. The bank bailouts are not working because the bankers have been just taking the money and paying themselves. I am referring to the big banks that took the bailouts. Okay, you want a source for that. I’ll break here and look it back up. Here it is: American economist Joseph Stiglitz, interviewed by the German magazine Der Spiegel. Just Google Der Spiegel and you can get the English language version.

Treasury secretary Timothy Geithner and many others contend that simply letting the major institutions go bankrupt would have been a disaster. On the other hand, many, many economists differ, saying that bankruptcy would be the answer.

My contention would be that governments should stay out of directly funding and/or running businesses, although providing some incentives might be wise. Where governments must act is in protecting the welfare of the population on an emergency basis, and businesses should support that. To do otherwise will risk chaos, in which everyone loses.

Everyone’s debt is cancelled; we all start anew…

Everyone’s debt has been cancelled. From the top investment banker to the the lowest person on the totem pole, some unemployed guy somewhere, and everybody in between.

We can all start over again.

But the new rules going forward are that from now on out you are on your own. Take on more than you can afford or more than you can safely risk and you are on your own. Your bad, as they say nowadays.

April Fools!

But, you know, I thought of this some time ago and suggested it to my wife (about the only person who listens to me, and under protest at that) in half jest.  But I am beginning to think it really would be a good idea and quite plausible and doable.

I mean we are printing money backed by basically nothing in order to try to keep our economy going. And we seem to be bending over backwards to help those who should not need help and at the same time seem to be nearly incapable of helping those who really need help.

All this borrowing from China and deficit spending and printing of phony money is putting us in a precarious position that even the top economists agree is unsustainable. We will eventually collapse — even more so than now — under the weight of the mounting deficits.

So why not stop everything and restart it?

Everyone’s debt is cancelled, but tomorrow we begin anew. Those who want to repeat the mistakes of the past are free to do so, but at their own peril. Everyone else gets a second chance.

April Fools maybe, but not such a fool idea after all.

Born again believer in newsprint newspapers???

Just as I had convinced myself that for newspapers to hang onto their model of paper newspapers would be like continuing to produce buggy whips when everyone was going to the Model T Ford, something came along to almost make me a born again believer in my old friend and source of income, the traditional newspaper.

It’s no secret that newspapers all over the United States (particularly big ones) are folding or on the edge of doing so. The Seattle Post-Intelligencer no more, except on the web, and the Rocky Mountain News out of Denver gone and the San Francisco Chronicle on the brink of shutting down if no buyer can be found and so many others gone and even the New York Times, the very symbol of newspapers in America (even if its politics offends conservatives) facing massive cutbacks.

But the bright spot may be many generally small local daily newspapers. They often have a niche and meet a demand for news in which they have little to no competition. And if they are fortunate enough to be independently owned, as opposed to corporate owned, that can be a blessing.

I may be easily swayed by the place newspapers have in my heart (and sometimes it’s been a kind of love hate relationship because of my personal history with them), but what threatens to make me a born again believer in the ink on paper business is some things I read on the web (and isn’t that ironic) on a site called the “Silicon Alley (not valley) Insider” (edited by Nicholas Carlson).

The main points are paraphrased and otherwise interpreted by me as follows:

Did the railroads turn themselves into airlines?

One newspaper investor identified ten good buys around the country and opined that newspapers should only use their internet sites as a link to national and world news and that they ought to charge for local news on the internet or not provide it on the electronic format at all. He also said that they definitely need to charge for their local news presentation in their regular paper format.

And it was also suggested that the newspaper industry knows the traditional printing business and would do better to stick with it and that it is not the newspapers’ job to figure out how to make money off of advertising on the internet.

It was suggested that hypothetically by calculating from cost figures supplied by the New York Times, that it could stop printing and have enough money to buy each of its readers that new fangled electronic reading device called a Kindle. But that was only hypothetical and to do so would be to lose its print ads (its main revenue) in the process.

I think the idea here is that railroads should stick to the railroad business and airlines to the airline business even though they both are in the transportation business.

And that brought up the contention I guess made long ago by Harvard professor Theodore Levitt that railroads thought they were in the railroad business, not the transportation business.

But as things have come to pass, railroads are much more profitable than airlines (I’ll buy the Reading Line and pass go and collect $200 please).

An inescapable fact in all of this though is that production costs for the traditional newspaper to include the printing presses, the newsprint, the ink, transportation, the labor, and so on can be prohibitive.

(Newspapers, especially the smaller ones, often make use of their presses for commerical printing jobs.) 

So anyway it was all food for thought, another perspective.

P.s.

It troubles me that San Francisco, the city of my birth, could lose its last remaining daily newspaper. My wife picked up a copy of it the other day – not much left ( I mean I liked what I read, but there was not much of it).

(Copyright 2009)