Monday, March 3, 2008

How to Solve the United States' Worst Economic and Environmental Problems

First, the main economic problem is reduced job opportunities. As manufacturing jobs leave the country, middle Americans are watching their job opportunities shrink. They move to poorer-paying jobs that contribute less to society. Instead of providing goods and services that benefit other people, they sell goods and services provided by others. Junk-mail advertising, telephone soliciting, clerking in big-box stores. Data entry work for marketing companies. A nation of people taking in each other's laundry. Or selling each other long-distance phone service.

This problem is compounded by competition from immigrants from countries where people have even fewer opportunities. In this regard, the only plausible solution is for other countries to solve their own economic problems, for which this article is a template.

The second problem is too much cash floating around. Credit has been so easy to acquire that people have reached the saturation point with stuff, even buying houses they can't afford. Furniture, appliances, electronics, sports gear---how much stuff can a person own? The first time a cold economic wind blows, everyone stops shopping. Of course. It's time to conserve cash and pay down debts. Our federal government has come up with an economic stimulus plan so absurd it sounds like a joke. The government will borrow billions of dollars and dole it out to people in the hope they'll spend it on things they don't need. President Bush's biggest fear is that people will behave intelligently and do otherwise.

Now let's look at the environmental problems. Fossil fuels account for nearly all the air-pollution problems and a big part of the water-pollution problems. Even outweighing those is climate change caused mainly by burning fossil fuels.

As the other articles in this blog have shown, the most important solution to these problems is to convert from fossil fuels to renewables, especially windpower, and nuclear energy. What are the barriers to improving this situation? You saw this coming, didn't you? First, there aren't enough trained workers. Second, it takes a lot of capital investment.

So we see that the solution to our environmental problems is also the solution to our economic problems. When people go to work manufacturing the equipment for renewable and nuclear energy sources, or constructing the facilities, they can earn good pay because these are highly productive jobs with a big economic payback. Furthermore, and for the same reason, these are splendid investment opportunities. With the low interest rates presently being paid on investments and the low interest rates charged to borrowers, people have little incentive to save. But given this excellent investment opportunity, people can direct their earnings toward long-term financial security.

Is this sleight of hand? Voodoo economics? Not at all. It's simply the transfer of money away from wasteful consumerism toward long-term investment. It will transform the country in magnificent ways but it's not a magic trick.

The economic pressure driving this change is so powerful it won't be contained; the only point in question is how long it will take to start it. My opinion is that the only thing holding it back is an administration that believes consumerism is the sole engine of wealth. If I'm right, then next January we'll see the beginning of an avalanche of economic drive. All three of the leading candidates understand that prosperity depends on growth, not on spending.

Get ready and hold on.


Robert said...

Good comment.

Quality of life should be the true bottom line rather than just how much stuff people can consume.

Nuclear is part of the solution along with a movement toward voluntary simplicity. New technology can use less energy such as tele-coumuting via the Internet rather than driving to work.

Solar and wind are good energy sources also.

It seems like we have been floundering for years. Sustainable lifestyles and economics is a good focus. Still there are a lot of potential wild goose chases along the way like much of the bio-fuel industry that may create more greenhouse gas than equivalent energy from fossil fuel.

Car free lifestyles should be promoted and also child free lifestyles for a larger segment of the population.

Red Craig said...

Well said, Robert!

Danny said...

Here's a good example: Say you have 2 people. They both attend stanford for a career in, say, economics. They both want to work for microsoft. But, here's the catch: one lives in San Francisco, and the other in New Delhi. They both graduate with nearly identical grades and stats. Now, Microsoft will hire only one of them. Which one gets hired?

A: the man from New Delhi. It will cost Microsoft $15000 a year to get him on a good base. It will cost $70000 for the man from San Francisco. Since major companies only care about money, they will take the Indian man and leave the U.S. man unemployed. Put that on a scale of ten million people with similar situations, and you have mass unemployment, and that kills our economy. The major companies only care about what they can get for their money, not what they can do for the US economy. Outsourcing is killing our economy, too

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