Economics: We Are The Wrench In The Flywheel

"We, the people of the United States, in order to . . . . . ." Yeah, you get the idea. This country, it's us. The problem is that while we've the right to form a more perfect union, we don't quite know how to go about doing it.

Freeing ourselves from England allowed us to make great progress. But that was then. This is now. We've gone over some bumps along the way, e.g. the great depression. But, then, Europe didn't do so well either. Along comes Marx and Lenin fighting for the down trodden masses. And, in truth, there were lots of Russian masses trodden down by the Czar and the landed gentry. But what did communism accomplish? It simply took the masses from under the Czar to Stalin, who also trod on the masses (and everyone else) and did so no less cruelly than the Czar. (Okay, initially the Jews weren't quite as down trodden by Stalin. But, it didn't last long. Soon the Jews were just as abused as all the other Russians and then some.)

Capitalism hit its stride with the advent of the industrial revolution. (It needed lots of capital.) But, for American miners, steel workers, sweat shop workers and others, things weren't all that great. But, if you could get someone else to work for you, whether in a mine, or in a factory, or at a sewing machine, and you had some idea of what you were doing, you could now rise in station. And, if you were very lucky, you could become a capitalist.

The workers was helped by three developments; namely, unions, technology (it allowed for greater worker productivity), and a labor shortage brought on by WW II. But, there then occurred something whose debilitating consequences were entirely unforeseen. (Actually, most of what we've experienced has been largely unforeseen.) It started when politicians began teaming up with the unions. This resulted in the tortured passage of free trade acts, a National Labor Relations Board that would deny a company like Boeing the right to open a new factory in a right-to-work state, and demands on industry that they pay medical benefits far exceeding their ability to fund.

So, have we reached a dead end? I think not. Here's what needs to be done.

1. Politicians must trim back the entitlements they have bestowed upon the public. The politicians as servants of the people can't be permitted to vote for unsustainable entitlement programs simply because it enhances their chances of getting re-elected.

2. Public service workers, e.g. cops, firemen, teachers, their administrators and the like, must be denied the ability to squeeze out of the public more than is appropriate. In brief, a new way must be found to negotiate their contracts. The way it's been done heretofore is entirely unacceptable. (Well, there goes that voting block.)

3. Re-do our tax system so that the government is not in a position to pick winners and losers. Let the market do that. And, that goes for both companies and the public.

4. Improve the productivity of the American worker. That's done through education. But, here, the politicians seem no smarter than the average town idiot.

5. Avoid simple-minded fixes. Do what's really needed. Enforce anti-trust laws. We do need our Robinson-Patman law to disallow price fixing and other kinds of behavior that interferes with the workings of a free market. What we don't need are legislators like Chris Dodd and Barney Frank, who for reasons of their own have leaned on (and quite heavily) banks to force them to make "ninja" loans. (Loans where the borrower has no income, no job, and no assets.) Oh, and lest I forget, get rid of Fannie Mae and Freddie Mac. Let their CEOs get honest jobs, jobs where they have to report to stockholders.