Thursday, December 11, 2008

A Way for Obama to Fix The Economy

I strongly urge everyone to read this article, which appeared in Spiegel Online. It is an article entitled, Does Communism Work? It is the best analysis I have read to date on what is going on economically in China. Having edited two books on China and also having visited China on three occasions, I can attest—on the basis of even this modest level of familiarity—that it rings true. I have some other quick thoughts to share here that are based on years of political observation from what might be termed a progressive Republican viewpoint. There is too much here for a more careful presentation, so please bear with the rough outline presented. Do read the article in conjunction with my thoughts below. Given the scope of the present difficulties facing this country, some of you may find these ideas refreshing. I’ll post links on Facebook, Twitter and Blogger.,1518,465007,00.html

The Chinese have clearly embraced a kind of pragmatism that has not been seen since the founding of our own Republic. I love the concept described in the article as: zou chuqu, which means “swarm out.” We need our own American version of swarming out and steamrolling inefficient and outdated ideas, regulations and the present ideologically driven, environmental choke-hold on industrial and other development. The Chinese have a commission known as the NDRC (the National Development and Reform Commission), which overseas all major projects. This is an outfit that simply knocks down all obstacles to development and quickly without endless discussion between competing sets of interests. It strikes me that we must have something similar to this here in the US. Our reliance on cowboy style capitalism is a cultural icon that no longer serves, nor are liberal good intentions about fairness and sharing resources sufficiently coherent to engineer economic recovery in our present circumstances.

What we are seeing in the US, in tandem with our present financial meltdown, is the display of a kind of ceremonial leadership, in many instances, of large corporations, regulatory agencies and government offices. I’ll give you one glaring example. As a former stockbroker and, as far as I can determine, the SEC (Securities and Exchange Commission) is charged with overseeing the securities market.

Securities and Exchange Commission (SEC), agency of the U.S. government created by the Securities Exchange Act of 1934 and charged with protecting the interests of the public and investors in connection with the public issuance and sale of corporate securities. The five members of the SEC are appointed by the President and confirmed by the Senate for terms of five years.

Where was Christopher Cox (head of SEC) and the other four board members during the development of many of the derivatives that led, in part, to the present financial meltdown? A proponent of deregulation, Cox indicated during recent hearings there were problems that they missed. Talk about an understatement! The fact that he was a proponent of deregulation is irrelevant, what is at stake is the simple issue of knowing what is going on in the market, and particularly, understanding the potential harm that financial instruments such as derivative securities might pose. At present, has he been asked to resign or punished in some way for his own and the rest of the Board’s lack of oversight? The head of American Express, by way of another example of financial non-sequitors, receives 50 million dollars a year for his salary. For what, we all might want to know? What does anyone do to earn 50 million a year for a company they don’t own? At present, American Express is experiencing its own financial meltdown and providing what can only be described as third world service in regards to the effect its policies might be having on card holders. Despite legitimate credit issues, AMX recently closed all Open credit lines and notified card holders ten days after they had done so. Their explanation was that they could do so legally. Legal yes but from a customer service point of view this was completely nuts, as there were innocent creditors who wrote checks against these accounts that bounced, creating further dislocation in financial markets. (Readers might want to Google this mini debacle for more info.) Note also the request for buyouts and bonuses from corporate heads whose companies are failing. This is beyond lunacy but it is also part of a mindset or set of business expectations that are no longer related to reality or common sense. Much like the Mandarins of old China, these dinosaurs have to go.

The departments of Commerce, Labor, HUD, Energy, Treasury and Transportation, for example, might make sense in terms of a logical breakdown of area responsibility but make absolutely no sense in terms of overall, coordinated development. Our current financial crisis is directly related to the slow down in industrial and other forms of development here in the US—what is quaintly referred to in the press as the job market. The financial crisis is just a symptom of mismanagement by individuals who have little or no moral vision. This goes beyond all party lines but bone-headed Republicans who think free-market capitalism will solve everything are as maladjusted as pin-headed Democrats who spend more time worrying about various emissions than the moral and spiritual pollution emanating from their own party.

If Obama is serious about reversing the present financial crisis, he might want to study how the Chinese overcame a rigid bureaucracy to create an enormous amount of wealth in a relatively short period of time. They violated many of the precepts of Communism to arrive at practical solutions for common problems. One glance at the skyline of many Chinese cities, the bounty of food available, a ride on their fast, modern trains or six lane, American style highways suffices to convince. This is not to say that the Chinese solution is without problems or moral difficulties but there is definitely something Americans can learn from Chinese pragmatism. What is needed now in America is our own version of the National Development and Reform Commission to replace present cabinet level departments of Housing and Urban Development (HUD) Labor, Transportation and Energy. Our present reliance on the deterrence of mutually competing interests is eroding our ability to compete in international markets and is stifling industrial and other development here at home.

And finally, I cannot state how important it is to rein in the burgeoning notion that curtailing industrial activity here in the US is somehow contributing to saving the planet. The best way around pollution issues related to potential climate change is to deregulate environmental restrictions on nuclear power while simultaneously developing green forms of energy. (Makani Power, for example, and many others both like it and in other areas of green energy development show a great deal of promise but are probably not going to be ready for prime time quickly enough to supply the massive quantities of cheap power that will be needed, for example, once electric vehicles starting sipping at the collective well of electricity. This is likely to be a huge problem when millions of households start hooking up their cars to our present antiquated energy grid. (The Chevy Volt, a truly practical electric vehicle, is due out in 2010.) When this energy crisis comes up, and I am predicting it will, will anyone thump politicians for NOT developing nuclear and other forms of power as part of what should be normal foresight and planning?

Morally speaking, the shallow notion (related to saving rather than developing the planet) that there are too many people in the world needs to be replaced with a pro-life, human-centered vision for development. A good reference, believe it or not, are the various Papal Encyclicals on labor and development. There aren’t too many people on the earth. There are too many people doing nothing and living unproductive lives because there is little or no leadership in the western world on the synergistic and geometric relationship between labor and long-term industrial development. The geometric relationship between labor and long-term development might be described as follows. Long term development requires long term labor. This leads or can lead to a stable middle class of workers who then use their earnings to buy products and homes, which in turn further increases the need for labor and more development but only if the population is expanding and only if the promise of jobs and more work continues. Long term projects are essential for this kind of stability. When the idea of geometric growth is coupled with a vision of what people really need and want morally, physically and spiritually, what arises is the opportunity for moral governance. At present, the following four infrastructure projects (these are not new ideas) could create billions of dollars worth of new jobs and create long-term development for the next century.

1. The North American Water Project: bring water down via pipeline from water rich Canada to the US and Mexico. Long term taxes and revenue from water would pay for the project but politicians have to stop thinking in yearly cycles and move up to 10, 20 and 50 year industrial development plans

2. The High Speed Rail Project: development starting in the southwest to link the Southwest to the West Coast. Second phase: link the East Coast to the Midwest; maglev for heavily trafficked areas that require quick and convenient transportation.

3. The American Independence Project (who doesn’t like independence?) massive investment in new nuclear power plants largely freed of environmental regulations

4. The Alternative Green Power Project: massive development of solar, wind and other natural resources. Long term credits to be subsidized by long term earnings based on government lending/rental of energy producing units to the private sector.

There is plenty of space on the planet for a population two or three times its present size and when we run out of space and raw materials here on Earth, there is no reason not to head out into the Solar System and beyond for resources. None of this will happen without a vision for industrial development that is rooted either in Genesis (multiply/reproduce and have dominion of the earth, etc.,) or an alternate vision of humanity that is rooted in practical solutions for what people really need and want. This isn’t socialism, it is common sense. The oldest civilization on earth, despite its disturbing and present reliance on abortion, may yet lead the way into the future.

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