Conservatives are thinking that Barak Obama is making a mistake jumping into the fray so quickly to prepare his economic package. Although I am sure Obama would like to have the entire package in place in time to launch it right after the inauguration, it would be quite a feet indeed to have that much work accomplished in that short of a time span. Clearly, Obama is wasting no time at all in preparing a team so it can hit the ground running as soon as possible after taking office. And much to his credit he is just as clearly considering more than one front, evidenced by his appointment of prominent scientists to deal with the environmental issues that have been neglected for the last eight years by the outgoing administration.
Nonetheless, conservatives still fear his direction will have less effect on economic recovery than what they feel would be the case if he were to take a different tack. What a surprise that the right would take that view. The beltway boys on Fox news discussed their reservations that the proposed tax cuts are going to the wrong people. They follow the conservative philosophy embraced by Republicans which has always favored tax cuts for those who had the ability to use the savings to re-invest in more plant and equipment or ventures which would in turn result in more jobs, thereby fostering a more thorough boost to a lagging economy.
This view was much more realistic during the industrial age than it is now in this age of globalization. A major problem with this outlook now is that the wealthy are not investing in such a way that will foster job growth here in the U.S. With labor costs higher in America than anywhere else in the world, owners of the means of production are not motivated to sink their funds into plants and operations here. As long as their prime motivation is to increase profits and as long as the CEOs and decision makers must answer to boards of directors and stockholders who collectively insist on positive financial performance, they will not sink money into creating costly American jobs when they can build in Mexico, India, Taiwan, Sri Lanka, Malaysia, Korea and a host of other locations where the average worker can live high on the hog while making wages that are lower than what we here in America consider to be at poverty level.
As long as globalization is part of the picture and as long as Americans are on the top of the wage and cost of living scale we are going to experience the pain of economic contraction that comes with the world economy’s process of seeking its own form of equilibrium. The smaller economies of the world are experiencing upward pressure on wages and costs of living at the same time we Americans are experiencing downward pressure on the same factors. Until the world’s economy reaches some semblance of economic equilibrium, this process will continue. And as long as these conditions prevail, economic recovery here in America will not be painlessly achieved by blindly giving tax relief only to the wealthy.
Yes, the middle class and the poor will spend the money differently than the wealthy will. But they will spend it here. Yes, they will spend much of it on consumer goods made in China and other places previously mentioned here, just as the wealthy are spending investment dollars in those same places to maximize their profits. Globalization is not going away. Neither can it be ignored by planners of an intended economic recovery.
Obama knows this, and is surrounding himself with a philosophical mix of competent advisors and planners so he can come up with a realistic plan to address the most difficult problems ever faced in American government. All accounts at this point indicate that he wants to hear good advice even though it may be contrary to what his current thinking may be. Were that not the case he wouldn't be placing Republicans in his cabinet over defense and transportation. If this continues he will have a much different persona in the White House than his predecessor. Wouldn’t that be a pleasant change?
Nonetheless, conservatives still fear his direction will have less effect on economic recovery than what they feel would be the case if he were to take a different tack. What a surprise that the right would take that view. The beltway boys on Fox news discussed their reservations that the proposed tax cuts are going to the wrong people. They follow the conservative philosophy embraced by Republicans which has always favored tax cuts for those who had the ability to use the savings to re-invest in more plant and equipment or ventures which would in turn result in more jobs, thereby fostering a more thorough boost to a lagging economy.
This view was much more realistic during the industrial age than it is now in this age of globalization. A major problem with this outlook now is that the wealthy are not investing in such a way that will foster job growth here in the U.S. With labor costs higher in America than anywhere else in the world, owners of the means of production are not motivated to sink their funds into plants and operations here. As long as their prime motivation is to increase profits and as long as the CEOs and decision makers must answer to boards of directors and stockholders who collectively insist on positive financial performance, they will not sink money into creating costly American jobs when they can build in Mexico, India, Taiwan, Sri Lanka, Malaysia, Korea and a host of other locations where the average worker can live high on the hog while making wages that are lower than what we here in America consider to be at poverty level.
As long as globalization is part of the picture and as long as Americans are on the top of the wage and cost of living scale we are going to experience the pain of economic contraction that comes with the world economy’s process of seeking its own form of equilibrium. The smaller economies of the world are experiencing upward pressure on wages and costs of living at the same time we Americans are experiencing downward pressure on the same factors. Until the world’s economy reaches some semblance of economic equilibrium, this process will continue. And as long as these conditions prevail, economic recovery here in America will not be painlessly achieved by blindly giving tax relief only to the wealthy.
Yes, the middle class and the poor will spend the money differently than the wealthy will. But they will spend it here. Yes, they will spend much of it on consumer goods made in China and other places previously mentioned here, just as the wealthy are spending investment dollars in those same places to maximize their profits. Globalization is not going away. Neither can it be ignored by planners of an intended economic recovery.
Obama knows this, and is surrounding himself with a philosophical mix of competent advisors and planners so he can come up with a realistic plan to address the most difficult problems ever faced in American government. All accounts at this point indicate that he wants to hear good advice even though it may be contrary to what his current thinking may be. Were that not the case he wouldn't be placing Republicans in his cabinet over defense and transportation. If this continues he will have a much different persona in the White House than his predecessor. Wouldn’t that be a pleasant change?
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