Friday, September 03, 2010
Obama Falling Short When It Comes To The Economy- My Concerns About the Stimulus Package Have Turned Out to Be Justified
Back in January 2009, I wrote that the $800 billion dollar stimulus was mostly a waste and wouldn't have the desired impact on the economy long-term. (and of course the echo-chamber that is the DailyKos dismissed everything I wrote, because no one can criticize or even question President Obama). Much of the money was wasted on local pork projects for individual Congressional districts. It was not part of a cohesive plan to create long term employment. Paul Krugman and others argued that the stimulus wasn't ambitious enough. I basically came to the same conclusion.
The response should have been more robust. But even with $800 billion, there was an opportunity to create millions of jobs (sustainable jobs) by transforming the American workforce, and creating new industries. President Obama and the Country missed a golden opportunity that may never come again, to invest billions in the energy of the future, to transform the nations infrastructure, help small businesses, transform transportation and to retrain workers for the jobs of the future. It turns out that I was correct last year. Although in this case, I hate to say that I was right.
What Should Have Been Done - What Is Still Possible
1. We should put a few hundred billion dollars into establishing a new green industry in this Country. How? There should be additional stimulus... this time the funds should be targeted properly, with the goal of creating long-term, sustainable jobs. This could be done with $200-$300 billion.... or an amount sufficient enough to boost growth and create jobs.
A). Encourage to creation of wind farms with tax incentives, royalty incentives for farmers/landowners, etc.
B). Encourage Counties, and local communities to use wind and solar to reduce their energy costs. The Federal government could help out by paying a portion of the initial capital investment to get the projects started. (If you can reduce electric bills by 25%, 30%, 40%, 50% in local communities, people would respond favorably). Yes, some taxes would be involved to get these projects going, but the citizens could make that money back and then some in the long run through the savings on their energy costs. Not only would the projects save money on energy long term... but they would create jobs. We could blanket this Country with solar and wind projects over the next 10 years.
C). Provide low interest or no interest loans and grants to start-up companies, and existing companies that are involved in green energy, green manufacturing, green energy transportation, and research/technology. Provide millions in grants to start-ups with the best proposals, the best ideas and the best promise. Provide loans to existing companies that want to expand their factories, as long as they agree to hire Americans here at home. Encourage other companies to provide venture capital to new businesses.
D). Create a quasi-federal Research & Development agency that would use the talent and clout of the Federal government to conduct research and to find breakthroughs in energy. This agency could also be responsible for providing low cost research space for the future Bill Gates's or Paul Allen's of the energy sector. This agency would also be responsible for holding major grant competitions for private industry and individuals to encourage fresh ideas, out of the box thinking, new technologies, new patents, new breakthroughs, etc... to create the next big thing. The point of this would be to award grants for/and perhaps even subsidize (for a time) the best & brightest ideas. The purpose of the government playing this role would be to spark competition and help fund new projects (directly or indirectly by encouraging private investment). One of the biggest complaints from the R&D and Tech communities is that there are not enough incubators (low cost research facilities and cheap business space) for small start-ups, and not enough capital to turn research into good ideas and good ideas into new technologies and new technologies into jobs. It takes a lot of Capital to do this.... and private investors are reluctant right now...and there aren't enough of them, and we know banks aren't really lending money. The government should come in and fill that gap and play the role of facilitator.
E). There is a need to create more public works programs. Not on the level of the New Deal... but something along those lines.
F). We need a national strategy on energy and transportation. Currently, regions, and individual States are working on their own high speed rail systems. It would make more sense to make this a unified national system, for a variety of reasons (one reason is to increase economies of scale which would improve purchasing power and would actually lower costs for local States. Costs would also be lowered by spreading the cost burden. There would also be an advantage of establishing standardization...standard track, standard train parts, etc... again.. lowering costs overall. Currently, with the disjointed approaches, by Amtrak on the East Coast...and with projects in California, Illinois, etc. It is hard to see how these systems could be tied together in any kind of cohesive system. In China, Spain, Japan, Germany...and other nations... these projects are unified, national efforts... not disjointed State-by-State projects. As a result, those systems overseas operate more efficiently and smoothly. With all the levels of government in our system.... it will take years for these projects to get off the ground... if they get off the ground at all. When they do, the impact won't be maximized because the systems won't be tied into any comprehensive national network.
G). Help to create the demand for Green energy... by offering a system of tax incentives for businesses, homeowners, and landlords of apartment properties.
2. Help small businesses.
President Obama should have been spending more time rolling up his sleeves, working on repairing the economic mess that was left for him by George W. Bush and the Republi-cons. He should have been on our TV screens addressing the nation once a week... or at least on a regular basis...during prime time, highlighting all the efforts by Republicans to obstruct progress. And he should be doing this right now. If that means interrupting dinner time for Americans... then so be it. Most Americans are unaware that the Republicans blocked efforts to help small businesses.... (while at the same time the Republicans were going on TV and Radio claiming -with a straight face- that the President was doing nothing to help small businesses... only in America can con artists get away with this kind of nonsense). It is the Presidents responsibility to keep Americans informed about what he is doing to improve the situation.
He should have spent more time making plans to create jobs... should have participated in nationally televised town hall meetings, .....and should have been looking busy...like a man concerned. You have to look busy. Perception is 50% of the job. That's one part that you can actually control. Yet he has blown almost every opportunity to do so over the past few months. Bush & his handlers understood the importance of perception...they squeezed every drop out of it that they could, and they were able to make one of the worst Presidents in American history seem like a warm, caring, personable, halfway intelligent and concerned character. This is how they were able to create success...even as Bush made a routine out of lying to the American people...and as he was driving the Country over a cliff.