Thursday, April 30, 2009

Remaking America?

With Red Ink...

A sustainable, upwardly mobile middle class is what we have come to expect in this country. Now for the first time in my nearly fifty years I wonder if I was just dreaming all this time or if reality has just up and died.

Stories of Obama's grand plans to remake America blanket the media as we pass the 100 day mark of his tenure. I tend to agree that the debt based growth model we have been embarked on is essentially unsustainable. Consumption for consumption's sake seems perverted. Consumption based on the notion that we are building something better is noble and just.

The way it stands now we consumers borrow the money to buy products made in foreign lands by foreign labor so that our government can sell interest bearing bonds to foreign governments to fund social service programs to care for those without meaningful work. It leaves the consumer with a pile of personal debt and the government with mountains of red ink all the while tax and regulatory policies are literally pushing American businesses to move their operations overseas. It's insane.

Nothing I've seen from the Obama White House and the Democratically controlled Congress is giving me any hope they have any idea what to do to "fundamentally" change America for the better.

The laws on the books that have encouraged American companies to set up operations overseas were written for a different time and for a different set of conditions. In the 1960's when America was embroiled in an ideological global war with the Soviets it was right to spread American business to the four corners of the earth. It was the smart thing to do. Times have changed but the outdated laws remain. So America's working class suffers...

One can't really blame business - it is not about loyalty to a nation or the homeland it's about loyalty to shareholders and profits. It would be a bad business decision to ignore the way the laws and regulations are set up on the basis national loyalty alone. Corporate taxes (the 2nd highest tax rates in the world), regulations and outdated labor costs make it difficult for American business to compete with foreign based companies for the American consumer dollar. Greener pastures are sought. In many cases American based multinational corporations have relied on growing consumerism outside the U.S. for growth - and it has worked - for a while. As we have seen with this recession that foreign factories and importer/exporters still need the American consumer.

The President believes Americans need to consume less and produce more. Maybe so. Unless he plans on crafting tax law to favor job creation for the scrambling middle class the produce more part isn't going to happen. By default there will be less consumption if no one has a job. Instead of business and job friendly action I see a move toward higher taxes on wealth creators and their dividends and a wealth transfer towards those who produce nothing. Just wait until all the new regulations designed to combat a phantom foe called global warming degrade our ability to power our factories and our cities. Frankly, none of his plans make any sense.

We see stories of towns where the steel mill is closed down throwing thousands out of work while the steel to make a pipeline running through the same town is shipped in from India. Damn all the details - it just seems wrong. We have a vulnerable electrical grid that relies on massive and old generators - a breakdown or a terrorist attack could put thousands in the dark. No, not for just a few nights, but rather for months. Why? Because they're not made in this country any more. This storyline is repeated over and over in every state in the union. Why? Our tax and regulatory laws work against the interests of our own working class. Change that Mr. Obama - that's change we can believe in.

If the President wants to "remake" America and help the disenfranchised he might start by encouraging businesses to open back up on America's main streets instead of tossing billions (trillions) of dollars of debt atop Red Ink Mountain.