Contributed by Mike Walker...
All,
Back in December I sent some musings on the current troubles in our economy. Here are the grades with comments I would give to Washington so far:
A. Increase the velocity of the dollar in the economy. This means getting the cash flowing again in our financial markets
Grade: C+.
We avoided a disastrous defeat but have not secured a victory. To raise the grade Washington now needs to talk the “other” bankers like the people who run community banks. If you understand their issues/concerns with the current financial market then you will finally understand how to get the entire banking industry back on track.
This is where the capital needed for immediate job growth is most badly needed. Besides, the big bankers are too busy remodeling their offices.
B. Good Stable Jobs = Support for Private Sector Businesses
Overall Grade: C-.
Job #1 is support for Small Business. Grade: D.
This is the road to turning the economy around. Every other stimulus goal must be secondary.
When California began its economic turnaround five years ago it was borne almost entirely on the backs of small business. Small business created the jobs. Big business was still downsizing. These entrepreneurs in California not only created as many new jobs as the big businesses were shedding, they created a significantly larger number of jobs.
Small businesses are the dynamic and agile engines for growth on the playing field. If Washington really want to put people to work again then focus on small businesses.
Job #2 is support for the rest of the private sector. Grade: Unknown
If we want to keep jobs in America we need to make American industry competitive. We have the second highest corporate tax rate in the developed world. Shame on us! We need to be globally competitive and that means keeping big government out of the pockets of the private sector. The competing plans have not been sorted out to date.
Job #3 is infrastructure development. B+
Infrastructure can enhance economic growth but alone it cannot turn an economy around. So far Washington is doing a pretty good job. The stress on information technology is savvy strategic move.
The key to infrastructure development is to understand that it can never be an end in itself. Most in Washington seem to grasp the idea that the purpose of infrastructure development is to create an environment that allows the private sector to thrive.
To get an “A” grade we need to see more investment in defense. For example, the light armored vehicles (LAV’s) in the Marine Corps should have been replaced nearly ten years ago. The LAV’s were overhauled but eight years of war puts them right back in the “NEED TO BE REPLACED” category.
The last Job: Bailing out failed/failing industries and State/big city bureaucracies.
Grade: F.
This somehow became Job #1 to the professional political class in Washington.
It is folly to think the solutions to our economic problems will be found in the actions of any combination of the folks working at Ford, Chrysler, or GM. It is plain dumb to think it lies in state and big city government.
One last point, when the taxpayers put $ billions of dollars in the banks, etc, we received a lot of equity. When the banks, AIG, etc, turn around (and they will) the taxpayers stand to not only get their money back but with a nice profit to boot. You will be hearing screams of the rich banker folks from sea to shining sea.
When we pump $ billions into failed big businesses and state governments, the taxpayer money is pretty much poured down the drain. A small handful of career politicians will get millions in contributions from this mob but the taxpayers will be left with empty pockets.
Maybe the rich bankers should stop redecorating to take a cue from the government worker’s unions and figure out a way to keep their share of the taxpayer bail-out?
C. Change the business model in Congress
Grade: C
The jury is still out. The early signs from the White House and Senate are good but not those from the House of Representatives. Pork still seems to be the favored food there. Grass seed for Washington DC + Condoms/Family planning = Immediate Economic stimulus for folks out of work? Good grief!
This national economic downturn is a real problem. It is a serious problem. Congress needs to put our county first and their pork project/special interest pandering dead last.
Semper Fi,
Mike
