Wednesday, 28 January 2009

Mike Rivero on Obama's $825 Billion Stimulus Plan

With all due respect, this is shoveling borrowed money into a hole in the road! And while I will be the first to admit that our infrastructure has been allowed to deteriorate, focus on a public works program is a temporary jobs program that does not address the long term problem.

You want to boost the economy?

Okay, here ya go!

Short term: Cut taxes by 50%. That will light up the economy for the short term. Yes, we will have to make sacrifices like not running around the world killing brown people, or giving very expensive (and illegal) weapons to other nations so that they can kill brown people, but I for one an willing to make that sacrifice.

Long term: We have given away our manufacturing to other countries for the last 30 years. Our government actually gave tax breaks to corporations to make it easier to send high paying American jobs to other countries, then scratched their heads trying to figure out why Americans stopped buying things and worse, were suddenly unable to make the payments on their mortgages and credit cards!

Rather than deal with the loss of manufacturing back when it was still a small issue, the government covered up the loss of manufacturing jobs with the so-called "service economy"; the theory that you can prosper a nation by doing each others' laundry for a fee. From the point of view of the government (composed of politicians only thinking in terms of the next election) this was a great plan because tax revenues still poured into government coffers from all the services. Problem was that while money transferred from the private sector to the government, no new money was coming into the system. Inevitably that leads to a point in time where people start doing their own laundry again and tax revenues dry up.

So, here we are, dirty clothes piling up. unable to find work, unable to pay the bills, unable to buy new products, and unable to manufacture.

We cannot simply re-open the old factories. We could spend 100 years playing catch up to the nations who now lead the US in manufacturing, if we manufacture what they manufacture, and those foreign governments, much wiser than our own, will not allow their leads to evaporate. Look how Japan has committed to better computers and robots (while the US commits to making better bombs).

So, if we are to save our nation, we need a national commitment to new technology development. Not just refinement of what already exists but a leap way beyond, into totally new and portable energy sources (not just storage), photonics, large scale ultra-cheap desalinization, and of course ideas not yet thought of.

We need a revived CIVILIAN space program to jump start our technology the way the Apollo missions jump started our technology in the 1960s. Or we need a new Manhattan project devoted to the development of commercial technologies. We need to create something that ONLY the United States knows how to make, and that the rest of the world will want to buy.

Above all we need to recreate our national culture so that the products are the focus and value of a company, not the stock options. We need to remember that it is the beans and not the counting of the beans that makes real wealth. Above all, we need to reverse the trend that abandoned products as a way to make money and made money itself the product.

These are the ONLY things which can save our economy and our nation from economic collapse.

Originally posted at by Mike Rivero on 27 January 2009 in response to the Raw Story article here.

[Posted at the SpookyWeather blog, January 28th, 2009.]


steven andresen said...


I agree with the assessment here pretty much.

However, I question whether we should think of the development of a manufacturing infrastructure as being lead by a space program or a Manhattan project.

It is my understanding that both projects had a very narrowed focus on making a nuclear bomb, or developing the technologies useful for both putting someone on the moon and creating the icbm forces. That is, they were a way to develop military technologies while making the people think, at least for the space program, there was some civilian purpose.

I believe the Japanese or Germans have a much better strategy whereby they have a more directed economy with some strategy behind it. They also make it so that the people benefit from the government investment in the developments. It isn't so much private socialism of the profits.

I also understand that the United States did it this way in order to maximize the private profit making of the corporations in military kinds of technologies and to minimize any kind of investment in public infrastructure. Can't have labor unions or social services, they thought, because that just gets people thinking they might have a voice in the process.

By focusing on the destruction of the manufacturing infrastucture without also pointing out the simultaneous gutting of the public infrastructure, this proposal is not that good. I would expect the same kind of dynamic.

Maybe the new factories will employ special low paid workers from Iraq, who we will feel guilty about, and will work for pennies a day...

I am not sure about Mr Rivero, and whether he would push for the restablishment of this public infrastructure, but I do not want another 'war on impoverishment' that does not focus on building up the people.

SpookyPunkos said...

With Mr Rivero's plan, I can see where he is coming from because of his space background bias. He is going with what he knows best.

I agree with you Steve when you point out that both programs had a limited focus in terms of helping the wider economy. Rivero might be able to back up the effectiveness of his strategy as his knowlegde on these matters is vast. Nevertheless, as far as I know, the problems you have identified are valid.