Sam, it has already been explained by Evil Captor why this is incorrect. But, I just have to point out that it is silly on the face of it. Maybe you could convince people who have never lived in Canada that this sort of thing is the case but for those of us who have lived in both Canada and the U.S., it is obvious that this is not correct. I still remember when I was walking around a dicey area of Vancouver and thinking, “Well, I guess they do have bad areas here in Canada too.” Then a few months later, I was back in the U.S. and made a wrong turn and drove through part of West Philly and I thought, “Holy shit! There may be bad areas in Canadian cities but they sure as hell don’t look like this.” The idea that children raised in such areas aren’t much worse off than the average Canadian (let alone a poor Canadian) just seems wrong from intuition.
And emulate FDR’s WPA policies: we will:
-pay people to sweep the streets
-pay writers to write books that nobody will buy(Federal Writer’s Project)
-finance a massive road-building program (pave the country, cost to coast)
-grant every citizen a 4%, 30-year mortgaeg so he can buy a house
There, very soon we will have Zero unemployment.
Pass it on…“New Deal”!
Someone had mentioned that getting excess regulations off the backs of small businesses would help innovations a lot. I agree. There are a lot of regulations for small businesses on the books that aren’t vital. If we could just get it down to regs that would keep small businesses from forcing people to do really dangerous stuff without adequate safety and to keep them from exploiting their workers too badly (slavery can and would happen here if we let it, witness the crap we keep finding in those Florida sugar cane fields) and which will keep small businesses from selling dangerous stuff (no “Bag O’ Broken Glass” type toys). If we can do that and keep the whole weight of OSHA and other regulation-intensive agencies off small biz’s backs, we could crank the biz cycle.
If we can do so while still maintaining real disincentives to keep corporations and wealthy individuals from totally fucking people over, fine.
My suspicion is that if we dismantle every overseas base, etc., we’ll wind up fighting enemies on our home turf. Didn’t the World Trade Center disaster hurt enough?
I’m completely with you on this one.
Also an excellent idea.
Oh, America games the system just like Japan and China and virtually every other country in a position to do so games the system. The real problem is, the playing field isn’t level, and won’t be for some time to come.
A disaster. You just fund health care with tax dollars, does nothing to affect the price of health care, except providing an effective cap in terms of how much an individual pays in taxes. Would probably be a huge incentive for a rise in health care prices.
Great idea. Now try getting it past that army of lawyers, accountants, corporate lobbyists and the IRS itself. I hope all your papers are in order, Herr Mswas.
Also a great idea, but the key is going to be figuring out how to get it past ConAgriCo and their lobbyists. There are a lot of wealthy farmers who got that way by being very tight with their state and federal representatives, they could teach most urban folk a few lessons about politics. As it is, they’re content to just quietly collect all those subsidies.
I’m with you on this one, too. Large corporations, as evidenced by the jobless economy, are becoming more and more inimical to individuals … people, in short. Fighting their influence on an individual basis is an excellent idea … just don’t know if Mr. and Mrs. Teevee Idjit will ever get this point.
I’ve done a fair amount of garage sailing in my life, which is kinda like what you’re talking about – people sell what they don’t need for giveaway prices. My experience is that the marketplace tends to work in these economies, too. You can own any number of Dazey Seal-A-Meals, Abdomenizers, old IBM PCs with 128K of RAM and a 10 Meg hard drive, old paperback bestsellers, chairs that are literally on their last legs, candles made in craft classes, etc., for next to nothing. But stuff you really need – a new CV joint for your car, a new power supply for your computer – can be hard to come by, and costly when you do find it.
The real question is, other than the cost savings, why would we want to? Is it really too much to ask that everyone should have at least one room for themselves? I bet your average Mexican finds this prospect highly desirable.
I recently read a book called “Reefer Madness” which said that the drug and porn industries and other black market industries are becoming an increasingly large part of the U.S. economy, and that their underground nature is hurting everything from the respect for the law to economic stability. Makes sense to me to reform these areas.
I like it! One problem with a WPA type of operation is that you do not want it to keep people from re-entering the “real” labor force. I see your idea as a kind of government VC (venture capital) with a few restrictions. You’d need to make sure the ideas come from the people, not the government, and that the startup money would get repaid, perhaps slowly, if the venture is a success. (I’d rather do this than have the government own shares.)
The one thing I’d add is that some of the services could be of public benefit and non-profit, but eventually moving to self-supporting in some way. But in general, sounds good.
I also like this constructive idea. There are a lot of talented people with ideas for new products and industries that we, as a country, are not taking advantage of. However, one big downside would be the expected government bureaucracy to manage the whole thing.
Then why don’t you start a venture capital fund to exploit this untapped reservior of ideas? If what you say is true, you should have no trouble getting people to voluntarily part with their money.
OK. Want to kick it off with an initial contribution? Say 50k?
I’m glad everyone likes this idea, but I have to be honest – it’s unlikely the government will make a lot of money from this agency unless it gets very lucky. It will probably lose money for some time before they strike gold. The whole point of the exercise is that the government is able to loan money in times when VC types can’t or won’t, and to people the VC types won’t loan to. When the economy is going great guns and the economy is flush, startups in a hot industry can get money very easily – this is a lot of what caused the dotcom bubble to inflate.
But in an economic slowdown, money tends to tighten, which means that firms that might come up with products or services that will succeed cant’ get capital, which further prolongs the slowdown/recession. The proposed agnecy would resolve that problem by keeping capital for new startups avaialbe in tough times, but it would probably fund a lot of failures in the process.
So, your proposal is to create a bubble during economic downturns as well?
Keep in mind that if your plan were in effect today, George W. Bush would be investing your tax dollars in companies he (or his designate) chose. Are you sure you want that?
That’s a downside, but another is that you’ll need regs, and people to enforce them, to keep corps and people from gaming the system. Frex, it’s well known that certain Asian families have a history of gaming the federal agency charged making sure minority businesses get some portion of government contracts. The contracts aren’t supposed to go tot he same minority business time after time – the idea is to give minority biz a leg up so they can compete more effectively in the private sector. Some Asian families have circumvented this rule by having different members of their extended families apply for the contracts as different businesses, concealing their relationship with the rest of the family.
I see a possibility that large corps will try to use the agency as an adjunct to their R&D programs, in which the government pays for the salaries of thier staffers. I see a possibility that a lot of people wll try to get the income without actually setting up a company or doing anything. It’d be necessary to have personnel and rules to see that this sort of thing doesn’t happen.
No, my proposal is to try to keep the normal ferment of business innovation going during an economic downturn. I’m somewhat surprised to find you opposed to business innovation.
Personally, you think? Obviously, politicians might try to game the system as well to subject proposed startups to ideological tests rather than commercial tests … possibly there are rules that can prevent that.
I never said I was opposed to business innovation.
The smart money does invest during downturns. It’s the “stupid” money that tries to beat the system or follow the herd.
It’s quite possible that a gov’t VC fund could pick some winners. It’s more likely that it would be used as a political tool, or just throw money after another
“ethanol fuel” project. Taking the risk out of VC funding defeats an important self-regulating feature of the business world. It’s the same principle that results in people taking better care of the homes they own than ones they rent.
Yes. But it would provide value to the country. As I’ve noted elsewhere, other countries provide health care to their citizens. Other countries provide access to higher education. (For example, I was in Sweden in the early-'80s. I was told that the government paid for university educations, and that students would pay the money back over 30 years. I seriously doubt most people – especially older, laid-off workers – could qualify for such a loan.) How can countries that are not as “rich” as the U.S. afford such programs? Two ways are obvious: First, they tend to have higher taxes. Second, they spend less on their military programs.
People in this country squeal like stuck pigs about taxes. I don’t like paying taxes. But we also expect the government to provide such things as protection from attacks from other countries, and interstate road system, etc. We want all of the benefits, but we don’t want to pay for them. Well, I’m willing to pay higher taxes if it means that everyone in this country gets the same medical care we get through our private insurance programs regardless of our employment status or ability to pay. I’m willing to pay higher taxes if it means we can all have access to higher education regardless of our age or the size of our bank accounts. I’m willing to pay higher taxes if it means that I don’t have to worry about unemployment and that I’m likely to have a better, more satisfying job later.
And billions and billions of dollars can come from curtailing our foreign adventures. I’ve always thought that the Missile Defense Plan was a boondogle. I think our invasion of Iraq was wrong, and I object to spending $87 billion for it. Those two costs alone would account for much of the funding for the programs I mentioned. IMO cutting back the military budget and keeping our noses out of other people’s business would save us hundreds of billions of dollars that can be spent on more productive programs, and it would also do much to improve our reputation in the world. The cold war is over. We don’t need the forces to battle a Superpower. Lets spend the money more constructively.
As I said, people will squeal if we raise taxes. I don’t remember who it was, but there’s someone who keeps talking about the infringement of his “freedom”. But social programs do provide freedom: Freedom from poorer health because of lack of access to medical care. Freedom from ignorance because you couldn’t afford higher education. Freedom from losing even a modest home (or apartment) just because you happen, through no fault of your own, to be unemployed. “But countries that have such programs have double-digit unemployment!” Yes. But those unemployed still have access to medical care the same as employed people.
And I seriously doubt that most people would choose to remain unemployed. Yes, there are people who are content to live on government hand-outs; and yes, it’s unfair to the rest of us. But most people want to work. Medical care and the ability to pay rent (or a mortgage) is one thing; but what if you want to buy a new car? Gotta work. Most people, I think, want to be able to buy a new car, new furniture, DVDs, a plasma TV… And I think that most people would be bored if they are not working or going to school. It’s nice to have a break, but it gets tiresome after a while. So I don’t see non-contributors as being a large enough problem to worry about.
In other news: I’m employed at the moment. I’m in a two-week “try-out” at a local business. So I haven’t had the time to read this thread. If it works out, I’ll have medical and dental insurance. I’ll be able to pay tuition to attend school (at night). But I still believe that the government should provide health care and education to every citizen, and that unemployment benefits should continue until a person again becomes employed. [sub]And just to capitalize the “L” in “Liberal”, I’m also opposed to foreign military adventures and capital punishment; and I’m in favour of legalizing marijuana, even though I don’t partake of it myself. 
)[/sub]
John, what you have to understand is that most people who aren’t ardent free marketers regard lengthy economic downturns which lead to widespread unemployment for many, lowered quality of life and lowered expectations for the future for many, many more, as FAILURES of capitalism. You regard as part of the normal cycle, therefore to be accepted and not fixed.
I and others understand that it’s irrational to expect the economy to do nothing but improve, but we consider it SUPREMELY rational to do what we can to keep downturns as brief as possible and to mitigate their effects on people when they occur. This, I think, is at the root of your problem with the idea of a government agency to supercharge innovation during a downturn.
I would also add that the society that adopts such a system and makes it works will have a HUGE competitive advantage over those who do not – in short, I think free marketers may actually be harming the cause of capitalism here.
John, what you have to understand is that most people who aren’t ardent free marketers regard lengthy economic downturns which lead to widespread unemployment for many, lowered quality of life and lowered expectations for the future for many, many more, as FAILURES of capitalism. You regard as part of the normal cycle, therefore to be accepted and not fixed.
I and others understand that it’s irrational to expect the economy to do nothing but improve, but we consider it SUPREMELY rational to do what we can to keep downturns as brief as possible and to mitigate their effects on people when they occur. This, I think, is at the root of your problem with the idea of a government agency to supercharge innovation during a downturn.
I would also add that the society that adopts such a system and makes it works will have a HUGE competitive advantage over those who do not. Their downturns will be briefer and less severe, their recoveries faster, which means they’ll be in good shape to enjoy a more robust recovery when the rest of the world muddles thoughtlessly through the downturn in true free market fashion.
In short, I think free marketers may actually be harming the cause of capitalism here.
You have fused two different ideas into one: Shortening an economic downturn and providing a safety net for people out of work. It’s possible to do the latter without trying to do the former. I would add that it is supremely irrational to think the government can effectively “supercharge” innovation. Certainly it can supercharge activity, but activity is not necessarily innovation. It’s not like it hasn’t been tried over and over again. So, I would say it’s irrational to keep doing the same thing and expecting a different result.
You seem to be assuming that the government has some access to money that private business does not have access to. By getting the gov’t involved, all you’ve done is add overhead in terms of transferring money from one entity to another. Certainly gov’t people aren’t inherently smarter than business people. The only “advantage” a governement agency has is that it doesn’t have to worry about turning a profit. But if you foster activity that doesn’t turn a profit, you are damaging the economy, not improving it.
Well, of course that’s true when you add “and makes it work”. That’s the rub. And if the government can make a downturn last shorter, why can’t they make an upturn last longer? I can’t see an argument in favor of your system that wouldn’t logically call for the government to take over all economic activity.
Nonsense! This is just market fundamentalism rearing its ugly head. The government, for example, can choose to invest in ways that won’t make a profit because of market deficiencies. For example, sound investments in education are often not undertaken in the marketplace because it is not in the best interests of an employer to invest in someone who may then go off and use their skills elsewhere. (And the person in question underinvests in them because they may be motivated more by the short-term need to put food on the table than the longer-term benefit they would derive from the education.)
Plus, government spending can stimulate the economy in times when businesses simply will not invest because there isn’t the demand. Such demand can also be stimulated by giving tax cuts to the working class (i.e., those that will spend it immediately) but I seem to recall (for reasons that escape me now) that there are arguments why government spending can have a bigger bang for the buck.
And since the government controls the money supply, it does have a certain inherent advantage in terms of spending money that otherwise wouldn’t be there.
Appeal to emotion.
Your argument boils down to “companies and people don’t know what is best for them, so the government needs to decide for them”. Is there any actual data to back up your position on this?
The governement is in charge of almost all the K-12 education in the country. Are you going to argue that its performance in executing that task recomends itself to an expansion of government responsibility in education? Note that the the university system in the US, which contains a great deal of free market competition, is generally recognized to be the best in the world.
Companies, (especially the larger ones which can offord the expense), routinely finance continued education for their employees. I think you’d be hard pressed to find many Fortune 500 companies that don’t. A company that refuses to invest in its employees is going to find itself at a competitive disadvantage.
With a budge of $2.4T, of course the government can affect the economy. But business is best served when the gov’t remains a predictable, background element that takes care of its own business without interfering in the productive process. Market conditions are unpredictable enough without the gov’t adding to that unpredictability.
Tax cuts can stimulate the economy, but then what do you do next time? The typical downturn lasts about 9 months, and rarely longer than 18 months. Government acts too slowly in most cases. By the time it enacts the cuts and gets the money back into the system, the most likely scenario is that the economy will already be on an upswing.
I have no idea what you’re talking about here. It sounds like you are advocating that the gov’t print “extra” money, but I can’t imagine that that is what you mean.
One, government can borrow on the future through deficit spending, if it chooses to do so. Two, while making a profit may be a fundamental and necessary driver of normal business activity, government doesn’t have the same constraints. Furthermore, for government, profit (or perhaps better to say “return on investment”), doesn’t have to come strictly in the way of dollars. Helping enhance the skills of the population or providing a means for people to expand and develop their natural skills will ultimately help the economy and society. Such development is “profitable” in and of itself.