Last week’s Carlyle Capital collapse and Friday’s Bear Stearns meltdown offered further proof that the U.S. economy is in deep doo-doo and that the doo-doo is getting deeper.
George DUHbya (yes, it’s spelled with a capital DUH) Bush demonstrated once again just how far out of touch with reality he is when he said of the economy, "It's important not to overcorrect, because when you overcorrect, you end up in a ditch." Had the First Fool been paying attention, he’d know that the economy has been in a ditch for quite some time, and that it’s sliding inexorably along that increasingly rocky channel toward a cliff.
The bottom half of the middle class can tell you how tough the economy has become. Rising prices and the difficulties of making mortgage or rent payments, putting food on the table, and obtaining health care are the standards by which they judge.
Even more aware of the economy’s inadequacies are the members of the leisure class at the low end of the economic food chain. They judge the economy by the same standards used by the middle class, but in addition, they have a legitimate argument in that, in many ways, the economy has bypassed them completely. For some of them—perhaps for many of them—the underground economy becomes a viable option.
Few people outside of the privileged class argue that the economy is doing just fine. While members of the economically disadvantaged classes mostly agree that the economy is seriously out of whack, they have no idea when—or even if—things will get better.
If Bush has his way—and for some twisted reason he almost always does—the economy will never improve. His tortured logic tells him (yet another example of why information obtained through torture is unreliable) that as long as the wealthiest few percent are getting wealthier, the rest of us don’t matter. Thus far, his approach to remedying our broken economy ensures that it stays broken. Preemptive wars and open-ended occupations are not the solutions. Tax rebates funded by future tax returns are not the solution. A taxpayer-funded bailout of investment bankers and other sub-prime mortgage lenders is not the solution. Bush’s strategy of punishing the victims and rewarding the victimizers is not the solution.
So, what is the solution? To get at that answer, we need to develop a clearer picture of the problem. As I understand it, the problem is twofold. On one hand you have manufacturers, middle men, and merchants, all of whom complain that sales have stalled because consumers aren’t buying due to lack of discretionary income or, in many cases, lack of any income. On the other hand you have middle class and lower class consumers, most of whom cite unemployment, under-employment, stagnant wages, and rising prices as their main reasons for not spending.
What if there was a solution that would simultaneously satisfy the needs of both groups? Well, there is such a solution, and the idea for it was first posited in a short sci-fi story some 30 or 40 years ago. I’ve forgotten the story’s title and who its author was, but the story’s basic premise was that endless cycles of production and consumption are the essentials of a stable economy. To achieve that economic stability, the author had his protagonist fully engaged in consumption and locked into a quota system. The only things the protagonist could look forward to were a series of “promotions” signified by corresponding reductions of his consumption quota.
By now the possible solution to our economic woes that I’ve been hinting at should be obvious to you. If businesses want more paying customers, they should hire more people and pay them a living wage. As an alternative, they could simply pay people to do nothing but consume, thereby avoiding the expense of paying benefits and the necessity of providing them with a workplace.
If they aren’t willing to do one or the other, they should just shut up and suffer in silence.