The Grumpy Pundit

There has been a lot of fuss about the recent election here in The United States. The Democrats, of course, are smug. The Republicans, well, some (not all, but some) are in a positive frenzy of angst, predicting the end of freedom and the coming Socialist Apocalypse.

I pretty much don’t give a damn. I’m more concerned about getting done some necessary home repairs and wondering what kind of drapes the wife is going to pick out for downstairs.

I am, you see real independent, not a “can’t make up my mind” independent. My beliefs do not fit neatly into the obligatory party line of either party, but I will throw my weight, such as it is, behind whichever party seems to best suit the needs of the moment. Typically, that means that I am opposed to whichever party is in power at the moment. This time I supported Obama, because of the gross incompetence of the current regime. Next time around I might support someone else. I’ll see how things look then.

The one unwavering plank in my party platform is a firm belief in personal freedom. In being left the hell alone. neither party is even vaguely committed to that. It’s not even a talking point. As far as that goes, the only difference between them is that the overlap of which freedoms they want to restrict is not 100%. (The rule of thumb, not entirely accurate particularly in the current changing economic climate, is that Democrats want to regulate the economy and Republicans want to regulate morality. It works as at least a vague guideline.) As the man sang, everybody knows that the war is over, everybody knows the good guys lost.

Beyond that position, I don’t much care. The form of government doesn’t matter much to me. Democracy, Republic, Kleptocracy, Monarchy, whatever; if they’ll leave me alone, I’m fine with it. Hell, I’m not even irrevocably wedded to capitalism. Capitalism is great at finding the most efficient way to do certain things, at least on quarter-by-quarter bottom-line basis, but efficiency is not necessarily the highest goal in human society. (Maintaining nursing homes and orphanages isn’t efficient. It would be much more efficient to kill the old people and enslave the orphans. There have been societies that did exactly that, but we do not admire them for it.) A far-right society ruled by the unrestrained greed of huge corporations would be as much a nightmare to live in as a far-left society ruled by the all-powerful State.

Besides, capitalism is a system of shortages, limited resources. “Supply and demand.” As technology evolves, and we move out into space, where the resources and the energy to exploit them are practically infinite, how will capitalism work? We could be facing that situation as soon as a century or two from now, maybe sooner. That’s not all that far in the future; my grandchildren, if any, may live to see it.

So forgive me if I can’t get too worked up over which set of thieves gets to rob us for the next four years. I think we’d be better just picking people at random; then we at least might get someone honest and competent.

I just sent this to President Obama (or rather, of course, whichever staffer gets to read these things):

Regarding the auto-industry bail out.

As a long-time General Motors stockholder, I would like to say PLEASE STOP. General Motors are Chrysler are bankrupt. Chrysler will never be a viable business on its own. General Motors might be, but it will take years and hundreds of billions of dollars of taxpayer (MY) money to get them to that point…if it ever happens, which is improbable.

The arguments based on jobs don’t work. Workers will have to be laid off anyway as the companies scale back. The arguments based on patriotism don’t work. A Honda built in the US is a more significant part of the US auto industry than a Chevy built in Mexico.

Ford MAY be viable, if they can survive their huge debt load long enough to get the products in the pipeline into the hands of consumers. They’ve done many of the right things, and have good products. They just need some time.

It is time to perform triage. If there must be an auto industry bail out, the limited resources available should be put into a company that has at least a chance of surviving without infinite taxpayer support.

Abandon Chrysler. There is no hope there, and never will be.

If you MUST bail out GM, do so through a structured bankruptcy. Simply giving them a blank check without forcing any change will simply led to more blank checks to a non-viable company.

Put most of the resources behind Ford, if they need it. The money there might do some good.

The American taxpayer is tired of opening his wallet to bail out incompetent companies who just happen to be short on brains and long on lobbyists. Stop the madness.

It’s a pretty standard course of action these days that when the US economy gets in trouble, the government starts ladling out ’stimulus’ money. This ’stimulus’ (whether in the form of direct payments, tax breaks, or low interest rates) is supposed to jump-start the economy and create jobs. The idea is that creating demand for products (either from consumers or other businesses) will encourage companies to hire people to meet that demand. Increase demand, increase production, create jobs. Seems straightforward. Unfortunately, the borders of the US economy are porous.

That was not always the case. Between WWII and 1990, it took about eight months for the jobs lost in a recession to be recovered. Job recovery from the 1990 recession took 23 months. Job recovery from the 2001 recession took 36 months. We’re still waiting on the current recession.

The reason behind these ‘jobless recoveries,’ I think, is that in our globalized economy the demand created by stimulus spending no longer has to be met by workers in the US. The stimulus money basically leaks out of the US and stimulates economies all over the world. Imagine a colander in a sink. You keep pouring water into the colander, but it never gets full. Not until the entire sink is full enough of water to raise the level in the colander.

That is the situation we have when the government tries to ’stimulate’ the US economy. The money pours out into the global economy as fast as they can pour it in. They’re not really stimulating the US economy; they’re stimulating the entire planet’s economy, which takes a lot longer and a whole lot more money.

And so we get ‘jobless’ recoveries. As the global economy grows, these recoveries are going to take even longer, unless we drastically re-think how we go about managing our financial crises.

There seems to be three different ways the problem could be approached. (Well, four if you count “Don’t do anything,” which is the likeliest course of action.)

The social safety net could be strengthened so that there isn’t as much urgency to stimulate the economy. The downside of this is that increasing unemployment payments, and extending low-cost health care to the unemployed, would be expensive. The upside it that it would probably be less expensive than what we’re doing now.

The stimulus could be made more direct, to focus it on the US economy. That would require more direct government involvement, not just writing checks to consumers and businesses and hoping they do the right thing with the money. The government would have to directly put people to work, require that companies create their new jobs here in the US, that sort of thing. The downside is that government job programs are generally inefficient, and any government involvement in the economy causes some people to begin bleating, “Socialism!” The upside is that it would keep some of the money in the US economy.

Finally, we could make the borders of the US economy less porous. This would involve a small tariff, say about 5%; just enough to impose some friction on the money leaving the country. The downside is that it would annoy many of our foreign trade partners, who are used to having unfettered access to markets in the US, and many US companies which are used to being able to move parts of their operations overseas without restriction. The upside is that it would restore some of the competitive imbalance that US companies currently operate under, and keep many jobs here in the US.

I favor a mixed approach; strengthen the safety net for workers, and impose a small tariff on all imports. The tariff would go a long way towards paying for the safety net.

This would raise the cost of some goods, either directly in the case of imports, or indirectly in the case of companies having to maintain more expensive operations here in the States (as opposed to hiring people in China or Indonesia and importing their products), but with more jobs and money kept in the country people would be better able to afford the more expensive goods. NOT doing it will mean increased taxes to pay for all that stimulus money that is pouring out of our country, to benefit workers all around the world. We simply can’t afford that any longer (though that is exactly what the powers-that-be want to keep doing).

In either case we pay. This plan at least lets us pay each other.