I was born in Cuba where my dad and I used to watch the huge waves crashing into the Malecon wall in Havana during hurricanes. We get an Irene almost every other hurricane season down there so I know the routine: 80% of the trouble is in the rain so we – my sons and I – prepared around the house, got some non-perishable food-stuffs in case we lose power, and bottled water. Then we have hunkered down to enjoy the show of nature’s strength, hoping that nobody gets hurt anywhere.
I typed this while I wait for Irene.
The author above describes with extraordinary clarity the difficulties that the ordinary American (or consumer) faces. The author did not cite the cause that led Americans into borrowing: It was the stagnation of wages since the Reagan period, when a large percentage of the middle class was forced to turn to borrowing to maintain the illusion of prosperity.
All the determinant forces in our culture – government, industry, media, and commercial advertisement – corralled the population into a state of mind: Consumption was the Shan-Gri-La of western civilization and the more conspicuously we consumed the more valuable we were in the social scale. Consumption was glorified. When president Carter called for austerity and conservation in the late 70″ he was mocked regardless of the fact that, if president Carter ever did anything right, it certainly was his call for austerity and conservation at that moment.
With the push toward globalization by former president Clinton and his republican allies in congress, the fate of the American low and middle classes was sealed. Capitalism, which had shown a more humanistic mask during the Cold War, became brazen after the demise of its foe, the USSR. Borrowing was made easier. The don’t-worry-be-happy society moved into the XXI century. After September 11, 2001, President Bush urged Americans to go shopping.
He did not even have to urge them: Americans had been culturally programmed to buy things they don’t need until they lose their shirts off their backs.
Two wars, one financial crisis, and a decade later, the federal government is still trying to stimulate the irresponsible consumption of the last 30 years. I believe the most blatant attempt to induce people to consume until bankrupt is the absurd reduction in the social security tax. That is a true sham, jeopardizing the retirement of future generations for the political fortunes of a few today.
The federal government is consciously avoiding the roots of the problem: We have a deficit in jobs and those who work, generally speaking, earn too little because our laws foment both conditions. Our laws favor the investor, even if he/she invests overseas; not the American workers.
But the majority of people are not investors in the classical sense. The majority of Americans make their living working.
The author produces all the right ideals and goals at the end, except that it won’t happen in this Washington of today.
I am not running for office in Washington but for governor 0f New Jersey. What do I intend to do deal with these problems?
1. I will seek to reduce government by all the measures I have explained in my pages Political Program and Tax Reform above. Property taxes are out and income tax increases.
2. I will seek to attract capital to New Jersey by reducing corporate taxes to zer0 while at the same time increasing the tax on dividend paid by companies that do not operate in New Jersey, as I explain in the pages Tax Reform and Economic Highlights above.
3. I will seek to increase the New Jersey minimum wage significantly. In fact, it should more than double up instantaneously.
All the reforms must happen to be effective. This is a very coordinated plan. Piece-meal it would fail to produce the desired results.
If we want our economy back on its feet, we must get capital investment and manufacturing back. We must reduce the size of government in a manner that it does not affect education and the overall quality of life, and we must elevate the standards of living of the majority, not only because it is the right thing to do but because it is the smart thing to do… they are the consumers, the 71% of the American economy.