In Philadelphia, as in Wall Street, and throughout the USA and world, people are occupying cities and institutions. I call it, “Occupy America.” I may not be the only one to use that overall name, as the name is natural, but I did think it up on my own. These movements are America’s Tienanmen square protests, a loose coalition of disenfranchised citizens exercising their right to freedom of speech and protest to complain about the social and financial inequality facing America during this period of America’s demise.They are also complaining about excessive greed and corruption, political paralysis, and the financial demise of America.
Just like the Chinese protests, there are many misunderstandings about both the Chinese and American protests, and there are many commonly misunderstood similarities:
- No single group(s), cause(s), or leader(s) is behind the protests;
- The protests enjoy popular support by the public at large;
- The protesters do not seek radical change of the destruction of society or the government; and,
- The protesters come from a variety of socio-economic sectors which, when combined, represents the great majority of sectors of America.
What we are witnessing, just as China witnessed, was a reaction to excessive greed, corruption, and governmental ineptitude. The protesters (here and several decades ago in China) are/were more interested in seeing the government function (for once) as it is supposed to function and, unlike the typical protester, are/were not really interested in changing or destroying the fundamental values and institutions of each respective government.
Unfortunately, due to a lack of transparency: (i) corporate and individual greed; (ii) political ambition; and (iii) the promotion of narrow self interests above the good of the nation have wrecked large scale and catastrophic damage to of our critical institutions, such as our commercial and investment banking industry, the housing market, and even the political/democratic process, each of which has caused wide spread and catastrophic ripple effects throughout the economy. And these are just some examples, as are the following statistics. Mortgage foreclosures are worse than in the great depression. Our national Budget Deficit has exceeded critical maximum limits (self-imposed). Unemployment is twice the rate normally considered as “high and unacceptable.”
An example of what went wrong can be seen in the misuse of investment and loan facilities by both the commercial and investment banks (which were recently effectively allowed to merge, most unfortunately. While the industry was consolidating and executive compensation skyrocketing into sickening numbers in the hundreds of millions of dollars, and severance packages and golden parachutes were put in place to protect those insanely high compensation packages (which insured a very select few would be very very rich no matter how badly they, and the companies they managed, performed), the same companies were facing total mismanagement, catastrophic financial losses, and even being forced out of existence due to poorly understood and highly reckless investments and loans in a very non-diversified manner. Due to the consolidation in the industry, when these firms imploded, they dragged the entire country down with them, and we remain down.
Because of the injuries to our financial sectors, credit is tight, thus choking the future forecast for job creation, income generation, and economic growth. With this stranglehold on jobs, income, growth, and the housing market, the real estate market can not recover as there are no buyers to buy houses and no lenders to lend the buyers the mortgages necessary to buy houses. Without economic growth, there will be no increases in overall gross US income to create additional revenue and thus taxes without increasing income tax rates.
With individuals and corporate investors watching their wealth shrink, there is no money being invested in or with commercial and investment banks, and thus, their capital for lending and investing continues to shrink. This is a vicious circle.
It is exacerbated by the high costs of imported oil, which are far higher than the price at the pump, – (Click here to see my post on the hidden costs of imported oil). Although we have slowly and slightly begun to enact an energy policy, we need to do much more and act much faster! Separately, our commitments and past expenditures (and resulting debt) from the Iraqi debacle (which was the fault of the Republican administration and congress, further constrains this government’s ability to correct the situation and inhibit us from taking minimal action in such places such as Syria where a small investment would go a long way.
Lastly, and most urgently, our nation’s infrastructure structure continues to crumble. Incredibly, we desperately need jobs in the industries which would be necessary to repair and improve our infrastructure. That is the one area where there is a shortage of skilled workers. Simultaneously, we face the possibility of unbelievably sudden catastrophe in some geographic areas (such as northern California) if certain events should occur (such as a failure of the damns and levies necessary to protect the water supply in northern California), while we also face the certain long term demise of our national economic strength if more national and extensive infrastructure improvements and projects are not made. It has been a long time since the Hoover Dam and TVA were built. For example, we need new bridges, while others need to be replaced, repaired, or expanded. The same goes for our power grid, highway system, mass transportation system, and on and on. China is making that investment, yet America doesn’t even consider it.
It is not surprising that America would not consider tackling her major decline and decay in infrastructure when there is already a huge budget deficit and national debt. This is most unfortunate insofar as tackling the biggest threat this nation has faced since World War II is also the key to restoring this country to her strength and greatness and prosperity which she enjoyed after World War II.
The permanent solution to eliminating those annual deficits, paying down that national debt, increasing national wealth, and getting people back to work would be solved, in the long term, by training and educating our workers and then hiring them to restore this country’s historic superiority in her infrastructure. People needs jobs, and the jobs we needed filled pay six figure incomes yet, incredibly, increase the real wealth of this nation and meet the future needs of our society,. These jobs, and the work which needs to be done, which are necessary to restore our national infrastructure to a state of preeminence in the world.
We need to stop teaching and our children that to be successful, one must wear a suit and make a seven figure income by “shuffling” existing wealth. Casinos, stock brokers, and even lawyers do not, for the most part, create real wealth. They simply protect or redistribute existing wealth. The problem is that it will take decades to begin to train, fix, and then begin effectuate the repairs necessary to our infrastructure. These projects will not be complete for decades, and the profits from the necessary investments will not be realized for a few decades even more.
Our elected officials have very short term horizons. The longest a President can hold office is for 8 years. There is no chance that any long term policy will see any positive benefits during the political life of any politician who enacts the policy. The myopic focus on our budget deficit is a flawed analysis. It is acceptable, and even desirable, to borrow money, if that borrowed money is being put to good use and will create real wealth in the long run. As any person with a shred of economic or business knowledge will tell you, there is a tremendous difference between a dollar spent for capital improvements and capital investments compared with a dollar spent on current or past expenses (such as the Iraqi war.)
Since politicians, especially those currently calling themselves the Tea Party (who demand expenditure cuts as and oppose any revenue increases, under any and every circumstances) are blindly blocking any and all possible economic measures which have been or could be advanced by our democratically elected President, despite the mandate he received by the voters. As long as this continues, there is no chance of politicians having the political will or ability to incur the massive debt and expenditures necessary to begin the necessary infrastructure projects that this country will pay dearly for not immediately commencing.