increasing demand in our economy through developing our infrastructure base

Making America Competitive in a Global Economy

The manufacturing base in our economic sector what I will call our tradable sector of our economy in America has not been essentially creating jobs for our economy as far back as 1990. The part of the economy that has shown good growth before the economic crises was in the untradeable sector of our economy. From 1990 through 2008 the majority of jobs that were created in our untradeable economy sector where the jobs centered around government and health industry related work. Allow me to throw a couple of other statistics out there. In 1990 America possessed 122 million jobs. In 2008 that number had increased to 149 million. The manufacturing sector added maybe upwards to 600,000 new jobs during that same time period. This is not even measurable, basically our manufacturing sector fell back when you realize that during those 18 years between population increases and the percentage increase in manufacturing jobs was a negative gain. The sectors that required a high level of education though experienced good growth; they included the financial sector, computer high tech industries and the engineering fields. It is evident this trend of sending manufacturing and tradable work overseas; those jobs with those lower educational requirements will not be coming back. The economy needs to increase demand for goods and services to grow our economy now. Therefore we need to finance investment through our government and private-public infrastructure bank. Without demand our private sector will not invest any of their $1.2 to $2 trillion dollars they have sitting on the sidelines for these past three years to produce the products that will grow our economy.

Kind of like a “Catch 22”, if our citizens and business sector does not have the demand for these products, the private sector is not going to stimulate the economy; it is not their nature. Business is about profits, the bottom line and making wealth for their shareholders. Our government though has a vested interest in a vibrant steady growing economy of 3 to 4 percent per year for our country to be successful financially. I do not and will not buy in that government is bad for America. It may at times create and over react in creating obstacles for business and its citizens but that is the “Art” of politics, knowing when and when not to give incentives and regulations out for the protection of the Constitution and the Citizens well being and protection. We have a positive history supporting this theory today that government along with its elected leaders must do everything humanly possible to create the incentives to put Americans back to work.

The other historical example we have regarding the involvement of government in fueling an economic recovery is how we paid off our debt that was greater than our nation’s Gross Domestic Production. Actually our debt was 124 percent of our GDP. We had just procured victory in Japan and Europe and were about to bring millions of veterans back to the states with no jobs teed up plus we had all those converted manufacturing plants that would need to be retooled from military products and services to new economic goods.

The changes made by the Federal Government during the Great Depression actually put people back to work. Now I realize our fellow citizens in the Republican Party will try to point out that we slid back into the depression after coming out around 1935. Don’t let this misrepresentation of what actually happen sway your understanding. President Roosevelt made a calculated mistake by trying to start paying down the debt in 1936; instead of the stimulus funds continuing to grow jobs we saw a retraction. This though was revised in ’38 and we again showed we were working our way to a more robust economy. Social Security was started during this decade as well, the very first social parachute program set up to protect the elderly from poverty and the ability to feed and house themselves.

The better example was after WW II. We were in more debt than we are today when you compare debt percentages to GDP. Today it is about 90 percent of GDP, back after WW II it was 124-125 percent. What is different today then back in 1946 is you had leaders in Congress and the White House who were not beholden to the wealthiest 2 percent, big business and multi nation corporations . They did not retract and take away the social programs established during the depression years. There were many Republicans and private citizens like Ayn Rand who felt that government had no business supporting programs that would protect the elderly, frail, returning veteran as well as the working and middle class.

Today, we must be realistic; the global economy is a fact of life. We are not going to bring back those manufacturing jobs that can be performed at 80 percent or less the labor cost in America. We can though develop a National Economic Plan that will finally create long term goals that we can start to implement so we are prepared to be a viable force in the New Global Economy in the 21st century. We must treat this Economic Plan like we treated the Race to the Moon in the 1960’s. It looked bleak back then; a Communist Country the Soviet Union was going to out “Science and Engineer” us to the moon.

The will power of so many sectors of our nation had to become part of the same team to make this a reality. At first no one thought we had a chance. There were set backs with astronaut deaths on an early Apollo vehicles sitting on the launch pad that caught fire and killed three astronauts, there was the funding issue brought up by the Republicans and how we were wasting valuable money from the government revenues while we were fighting in Vietnam. I believe all are living the modern technological advances today from those investments then.

The Great Depression job programs put people back to doing work that needed to be performed but that the private sector was not responsible for developing, the Tennessee Power Authority that brought electricity for the very first time to southern states (and other similar projects) which no private sector business would be able to finance the development especially since their business model and pro forma did not produce a profit fast enough. The G.I. Bill provided the means and the funds to send veterans back to college. They became the leaders in business, manufacturing and engineering; they were the financial and banking leaders that managed the greatest increase in domestic manufacturing which gave rise to the most successful working and middle class. We sent veterans back to vocational training so they would be the carpenters, brick layers, electricians, plumbers and heavy equipment operators for the early expansion of affordable housing, schools, other public institutions, bridges, power plants and other infrastructure projects that created the backbone/spine of our recovery. The V.A. and FHA Programs allowed the new middle class to realize affordable home ownership which created the robust housing industry of the time.

Creating “Demand” in our economy is the only option we have if we want to stay a leader in global economic markets in the 21st century. We cannot count on business in the private sector to invest the $1.2 to $2.0 trillion dollars they have sitting on the sidelines. We can though create private-public sector infrastructure banking that will allow the private sector to be a part of the solution to our economic crises as we claw ourselves back to prosperity.

The banks can be fundamentally run to ensure profits for the companies that want to invest in projects knowing they have the full weight and trust of the treasury in America. These banks can become additional vehicles for the Wall Street Stock and Bond Markets that have $29 trillion dollars invested throughout the world assisting emerging economies to become successful as well. The only issue we have to overcome is again the Republican Party. The Party who told us they would create jobs if they were elected to lead us in Congress during the 2010 election cycle. Not one single jobs program was introduced to date by the Republican House of Representatives.

We know from what Mitch O’Connell has professed as his main agenda that it is not about fixing our economy, no, it is about making the man who is President today a one term President. Through their deliberate stall tactics in the health reform formulation, and budget policies, to the creation of an additional $6 trillion dollars in debt by demanding that the Bush tax breaks would need to continue to have the Republicans support any unemployment benefits for the nearly 14 million people looking for jobs that do not exist in today’s economy. Now the Republican’s who were well aware that their deal to add the $6 trillion dollars to our debt by continuing the Bush tax breaks was going to eventually mandate the raising of our debt ceiling to make sure our investors in America who have been buying our bonds all along can really throw a wrench in our economic recovery and even slip us back into a larger recession, but this time with much higher interest rates to pay those investors therefore taking more revenue away from paying down the debt and making more people unemployed.

We need $1.2 trillion dollars to be invested in modernizing our countries infrastructure systems through government investment/stimulus plans and private-public sector infrastructure banking. If we do not provide for this spending we will not be able to offset the lost revenues from the manufacturing sector that our big business and multinational corporations took away during the past 30 years. We cannot count on the Republican Party to provide the leadership needed to make this happen. In today’s political climate bi-partisan politics does not exist. This is a shame, I wish it was not true but the actions coming out of Washington speak louder than any campaign speech they could ever make now. Fool the working and middle class once, twice even three times. The definition of insanity is repeating the same thing over and over expecting different results.

The working and middle class are tired of the petty bipartisanship wrapped up in social issues to make the working and middle class think that the Republican’s are for them. Do you really feel comfortable putting back in power in Congress and the Presidency the Party that spent over a trillion dollars fighting two wars without even including it as a budget line item? The Republican Party who has said they must create the policies that will starve government from being able to pay its obligations. Another example is the Medicare Prescription Bill they passed in 2004 without setting up a way to pay for it. The Democratic leaders I guess could have done that but they are honest to a fault; when they came back into office they put all the cost left off the budget by Bush and Congress and created an additional $2 trillion dollar short fall that really was there all the time but it was never advertised.

Do you really want to put the Party that did not allow its Financial Regulates to actually regulate Wall Street when they started to flood the markets with so much cash they had to come up with a tool that allowed people who would not have to show income to obtain those subprime mortgages therefore reaping billions and billions of dollars in fees; who then had to come back to the public to bail them out to the tune of $750 billion dollars while President Bush was still in office not Obama?

The crises did not materialize overnight America. The fact that Obama and the Democratic Party funded another $785 billion dollars in the Recovery Act did help to gain back 2.1 million jobs of the 7 plus million lost while Bush was President. It also kept many first responders on the job as well as teachers. Working and middle classes, do not be misinformed that the economy can become robust again by taking “Draconian” measures such as taking away all of the government collective bargaining rights for government employees when every union was willing to renegotiate labor cost to help all of the states meet their budget short falls now that the stimulus money was used up.

Don’t forget Congressman Paul Ryan’s (Republican/Wisconsin) rewriting of the Medicare Program (and an ardent Ayn Rand follower) to become a voucher program as well in ten years. If you can explain to me how an elderly plus 65 year old person can fund their medical cost for $8 thousand dollars a year, then you must be talking about Canada, Western Europe or medical cost in the late 1950’s. One day in the hospital will burn through that voucher. Explain to me what private insurance company is going to be able to compete with Medicare today when they have gross profit margins over 25-30 percent and Medicare is more like 10-12 percent. Private sector health insurance pays their CEO’s tens of millions of dollars a years for devising ways to not have to pay out on preexisting conditions in order to maximize profits for its shareholders.

There has never been a robust economic recovery in America that followed the draconian measures of the Republican Party, never. The economy can be restored and revamped to become more robust for the working and middle class like it has never been done before by electing leaders that believe in middle class working values.

Future essays will start to lay-out the other building blocks we must incorporate in our Economic Plan. Besides finding the political will to rebuild our infrastructure immediately, therefore, creating jobs that will create the demand for the private sector to produce more goods and services which will also create more jobs, enabling us to pay down our debt in a similar fashion we had done after WW II thus providing the global markets confidence again that investing in America is a good and sane thing to do.

We will also need to have the political will to establish as part of our Economic Plan a National Energy Plan. The days of paying big oil or big ethanol billions of dollars a year when they are making incredible profits in the billions of dollars and paying NO taxes, as well as to see them reinvest our tax payer subsidies back into the political system to control votes must and will come to a fair and equitable end. Those dollars can go directly into creating new energy technologies, jobs and educational opportunities. Finally we need to establish a credible tax revenue program that makes it fair for everyone to pay their just share. For now though until this new tax plan can be put together I highly advise we allow the Bush tax cuts to expire in 2012 to what those rates were when President Clinton was in office when his administration left the new Executive and both House of Congress (all Republican) with a BALANCED Budget in 2001.

JND

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