Who knew we might have avoided this economic crisis with more bridges to nowhere. Or somewhere. There are certainly lots of places that need new bridges or repair of old bridges. It is called an investment in our infrastructure.And the United States has not been making any. Has not made any for the last eight years at least. Thirty if you look at our interstate freeway system.
We are all focused on instant gratification: the big screen TV, the new Hummer, the larger and bigger house, the war in Iraq. But our failed economy is not just the people with the bigger and better house they cannot afford without the fancy but vaguely illegal mortgage, or the huge credit card debt (some accumulated no doubt because of the instant gratification of Exxon). Who knew how quickly instant gratification would mean a tank of gas so we could get to work.
There is an ever dwindling middle class. Their incomes have not risen in proportion to prices. And not since 1928 has the United States seen such a huge concentration of wealth. The top 1% has a full 20% of the income. In 1980 that 1% only had 8% of the income. Incidentally, those are the people GW Bush and John McCain do not want to tax.
But it is not just the people (and politicians) that have been short sighted in this. The United States has made no "investments" in its schools, infrastructure, health care and alternate energy sources. Earmarks put people to work. And, said this one panel of economists, the oil companies have blown it too, choosing to try and force a relaxation of EPA standards on new refineries instead of taking the money they had (more than adequate) and just building. The same can be said for many industries.
I have made a huge investment in my infrastructure with the studio (admittedly because of a cheating contractor it was bigger than it should have been) and there is more I could do if I had the money - like stain the whole house, build that deck, etc. But at the moment I am more focused on the "immediate or intermediate gratification" like firewood for the winter and a shed to keep it out from under the snow because those top holders of wealth are holding back on spending (including art). Which points to the "emotional" and psychological reasons for the bailout which may be the whole reason on some level. Investment companies were in mid-panic. Sp is the government.
I think because of this bailout we are all being forced to "rethink" our economic plans. And the government needs to do that too. And not in pulling back and not moving forward on health care and infrastructure. To put people back to work it needs to invest in infrastructure. The $700 billion bailout would have built 4,500 bridges to nowhere. I am sure we could all think of places we would like to see those bridges - could use those bridges or a new road or an adequate school or a working train/rail system for transport. And friends in the construction industry that could use the work building them. Then we would have money to invest in our personal infrastructures.
So the key here for the fat cats and companies and for the government is not to pull in on your spending but refocus your instant gratification (the war in Iraq for GW) to investment in the United States. And the long term view of your company's and our countries needs.
Off-topic, Jacqui, but another little Palin gem if you've not seen it.
ReplyDeletehttp://www.youtube.com/watch?v=Jj7nBrdm4LE&feature=bz301
What a grasp of world issues she has ;-)
I'd like to invest in my own infrastructure as well. I've been planning to remodel the kitchen for a long time and I even have my financing ready to go. But I'm honestly nervous about spending that money, or taking on that debt, even though I know it will improve the value of my biggest asset, my home.
ReplyDeleteI am one of those who pay their bills on time. I wonder if others like us will be as reluctant to spend/borrow, and the resulting economic stimulation that results from this bailout is going to result in just more bad debt to those people who have no such qualms. It's beyond discouraging.
I find it hard to make a decision on remodeling. I am normally all for it. And in fact I have a shower I want to add to a half bath to make it a 3/4 bath and then I can totally refit my upstairs bath. But I am not hiring a contractor for any of it except maybe the plumbing on the shower.
ReplyDeleteI always figure any remodel will cost 20% more than your highest bid. Because of a cheating contractor on the studio it ran way over that and so I am currently trying to build up a prudent reserve. But if nobody spends money we all starve. I is all about cash flow and not cash stay, but never spend over what is coming in.
I want to see a lot of regulation on financial institutions in addition to this bailout. And we need a build up. We need more factories in the US and we need the government to invest in infrastructure.
As everything apparently goes increasingly pear-shaped, Justin Webb makes another interesting comment:
ReplyDeletehttp://www.bbc.co.uk/blogs/thereporters/justinwebb/
I am in hog heaven here at the gallery on DSL since I have been restricted with my websurfing due to a fat download on my own Satellite ISP. So I have definitely enjoyed your links, John.
ReplyDeleteI think it is amazing that The President said he had faith in this bailout plan and he expected anyone to consider that an endorsement. This is the man (other than John McCain) that has been saying the underpinnings of our economy are definitely strong.
Wrong.
In the State of New Mexico it often seems that the only economy outside tourists is constantly reselling our state. That falls in the category of instant gratification and not investment in the future.
Sadly with all the exporting of jobs and outsourcing by major manufacturers with a tax incentive it proves all of the US is probably in this imaginary area of the economy. No real investment has been made in hard infrastructure by the government or companies.
Now it seems they have poisoned our chocolate!!!! This is insult to injury. I say Americans buy nothing for the next week. Let's see who needs bailed out then?
If you need something see if you can swap for it.
The bail out is socialism. For capitalism to work they need the accountability of failure. We have been supporting capitalism with tax breaks, loopholes, legislation written by and for them... We are only getting the negative aspects of socialism now. How can they use one side of their mouths to say we can not afford to give poor people basic medical attention and with the other side of their mouths ask for $700 billion dollars to prop up a bunch of greedy bastards who are not only not geniuses (their supposed genius was what supposedly justified their horrendous salaries) but unaccountable self-serving bastards as well.
ReplyDeleteEspecially of the size they are advocating. Treasury Secretary Paulson said he could only dole out maybe $50 billion a year. So why not just pass two years. And then take $250 billion bill on infrastructure; replacement of aging bridges, update of Interstate system, and rail upgrades. That would be an investment in American and put tons of people to work.
ReplyDeleteImproved rail system would mean more can be shipped by rail and cut diesel fuel expended with trucks.
The outsourcing of jobs to other countries caused a boom and now we are are the natural downturn of that. The only real way to boost up the economy is not a quick fix like the bailout but an concentrated investment by government and industry in the United States.