Tue Jul 15th, 2008 at 04:50:51 PM EST
Perhaps it's the hot weather, but I think the meltdown in the financial markets has something to do with it. I've been involved long enough that I've lived through several of these ups and downs before, but this time seems different.
In no particular order, my complaints:
- The standard of living of too many people is declining at once. Those at the bottom are getting squeezed by rising food and fuel costs, while those in much of the developed world are seeing the social contract ripped up.
- Financial institutions are failing and national governments have no idea what to do about this. The world has seen this before, and the results are never pretty: Germany in 1923, and the succession of IMF induced crises in Latin America and Asia in the 1980's and 1990's.
- Falling stock markets, not just as with the dot-com bubble, but with blue chip companies like GM and Citigroup. The last time this happened (1929) even JP Morgan couldn't stem the tide (although his firm is doing quite well this time mopping up the spills).
- From the previous point it follows that many people who have been forced, or persuaded, to invest for retirement are now seeing much of their wealth go up in smoke. Nevertheless McCain and his cronies are mounting a new attack on Social Security. This week Pete Peterson has launched a billion dollar misinformation campaign including a movie claiming that Social Security is going broke.
- Not satisfied with rehashing the "evils" of communal, national, insurance and social service policies, the right is now pushing the theme that it was the incompetent implementation by the GOP that got us into this state, and not their utopian (or is it greedy) beliefs in free markets, unconstrained capitalism and wars of opportunism.
- Even with the present meltdown, the "left" is showing no signs of understanding what sorts of steps need to be taken to avert an even bigger disaster. In the US Obama and his fellow Dems are timid, centrist, and unable to envision bold steps. In the EU the situation seems even worse in that the better social services make people more complacent and less willing to address issues. The EU itself has become like spilled molasses, walking through it takes place one slow step at a time. Meanwhile Brown, Sarkozy, and their fellow mediocrities blunder on with trivia. The other parties aren't showing any leadership either.
- The oil "crisis" has removed whatever traces of sanity remain. Stupid and ineffectual ideas like drilling off the coast of the US are being proposed and time is being wasted on debating them, when the development of a real energy policy goes nowhere.
Now maybe I spend to much time following the chattering classes and the real people are dealing with the important issues of the day: the US baseball season, and the upcoming Olympics. Maybe everything is really fine as long as McDonald's still offers the "dollar meal" and Bud is still brewed (even if it's owned by Belgians).
I don't want to end on a negative note, so here are my suggestions:
- An immediate creation of national work programs similar to the WPA and CCC in the US during the depression. Those joining get a decent wage and are put to work on those projects which private industry can't make a killing in. This means infrastructure repair, home health and child care services, educational assistance and tutoring for those in need, etc.
- In the US create a national health care system which covers everyone not presently covered elsewhere or those who lose their coverage when they become unemployed. Extend unemployment insurance.
- Freeze all mortgage foreclosures and force lenders to treat the loans as "non performing". Homeowners would be required to maintain the property and pay local taxes while negotiating a new repayment plan. Holders of the mortgage backed securities would see their income "deferred". This is preferable to seeing their holdings written down to zero.
- Impose immediate fuel rationing in developed countries. Some system of tradable ration coupons (or their electronic equivalent) with a cap on the amount issued which declines each year. Couple this with a gas guzzler car purchase tax based upon how low the fuel economy is compared to some standard. Offer interest free loans to any car company that agrees to switch to high efficiency vehicles under an accelerated timetable. The loans would cover the cost of conversion. The new smaller vehicles would not, in general, be cheaper than the monsters they replace, this excessive price (if any) is what would pay back the loans. Offer incentives to people willing to have their guzzlers destroyed.
- Institute massive public transit and freight systems wherever they are inadequate. This effort would extend to ocean vessels as well which would have to be refitted or replaced to be cleaner and more efficient. Sail could be considered with appropriate incentives. Set tariffs based upon environmental impact. There should be no reason why Australian lamb in the US costs less than local chicken.
- Cut military spending, cancel existing contracts for useless hardware, withdraw from overseas bases and redirect the personnel involved into the projects listed in point one. Firms in the military sector should either be nationalized or be directed to use their technical expertise for productive purposes. Someone has to build and design all the needed mass transit.
- Eliminate all tax havens, secret bank accounts, holding of profits outside of the parent country and fake incorporation schemes. If Bermuda and Switzerland go broke they will just have to increase their tourism appeal to compensate. Corporate tax loopholes should be closed, or alternatively, eliminated and replaced by a universal VAT. Similarly taxes should be rationalized on individuals. There is no reason for a distinction between earned and unearned income - they both buy the same goodies. Intergenerational wealth accumulation should be prevented by the tax increases and a robust estate tax scheme.
- The evil rulers around the world (this includes the developed countries - they know who they are) should be given an offer they can't "refuse". Leave now with a modest settlement or go to jail. The international criminal court shouldn't be restricted to those with hard to pronounce names. The concept that the world stands by while a single madman causes untold grief was discredited when Stalin, Hitler and Mao were doing it. That it is still going on after the world has lived through that is beyond belief. I'm not talking about the latest conservative wet dreams of a "concert of democracies" meant as a cover for neo-colonialism. Perhaps we need a new form of international democracy. If enough people in enough countries have had enough of a Bush or Mugabe then they have to go, not matter how much they have intimidated or fooled their local citizens. After all the rest of the world is feeling the consequences of their actions, so why don't they get a vote?
Is any of this going to happen? Not likely. Could any of this happen? Change has happened before, inspired by idealism. The most powerful phrase of the past 300 years has been "all men are created equal". They just need to turn off the TV and get to work remaking the world.