Reenergizing the American Economy
If one looks at the history of the last 120 years, what many wealthy Republicans want are monopolies and guaranteed profits. For years, the best sweetheart deals over the long haul were found in South America. Then Eastern Europe was the next best venue for such deals. Now with the rape of American industry in full swing, the best deals are with the Chinese, Indians and a number of third world countries willing to pay big bucks up front. For a time, average Americans seemed to gain some benefit from the low prices that were the result of such wheeling and dealing. But it was only for a time. Seen any low prices lately? Wealthy Republicans have discovered low wages and fat profit margins. Welcome to the new economy.
Actually the new economy has been around for more than thirty years. The truth is that people noticed but didn't notice. It began with hostile takeovers that took American companies with lots of American jobs and turned them into lean operations that didn't have the R & D to keep their place in the world economy. Too much money was going into the pockets of people who were already rich but who couldn't seem to get enough. This kind of stuff still goes on. In recent years, many newspapers have been destroyed by such corporate raiders who fail to notice that newspapers need all the resources they can muster to survive the arrival of the Internet Age.
There's actually a myth that American ideas are what's keeping the American economy afloat. Like all myths, there's a grain of truth to it but the current myth is tied to a business superstition that you can't make a profit unless you set up a factory in Vietnam or Malaysia or whatever country is currently paying the lowest wages. It's part of a canard that big corporations throw around: We are in the business of ideas! Sure. Big corporations often buy their ideas from small corporations who get their ideas from university researchers looking for venture capital. Eventually the big corporation gets its big hands on the equipment of the small corporation, unscrews the stuff from the factory floor and ships it overseas for someone else to make. With an unemployment rate of 9.4%, America's empty factories now extend from Los Angeles to Jersey City. In the long run, selling generations of American know-how cannot keep the economy afloat.
The weird thing is that Ronald Reagan seemed to get that Americans not only need to lead in the best ideas but they need to lead in at least a few key areas of manufacturing. That is, after all, how we became great in the first place. Now, like most Republicans, Reagan seemed to have the idea that what the United States needed was a lot of poor workers with no bargaining power and no safety net. But unlike the Republicans of today, he actually felt the government sometimes needs to get involved in business. Reagan in particular stimulated the computer sector. In the 1980s, the United States was behind Japan in certain areas of computer technology. But Reagan felt technology was a national priority and even a national defense issue. And some years later Al Gore and Bill Clinton got it when they helped the Internet boom any number of times (No, Gore didn't invent the Internet as Republicans pretend that he claimed, but he did help it with a number of issues; actually Republican politicians and pundits of this era aren't good at inventing anything useful but they are admittedly fairly good at inventing nonsense).
For eight years, George W. Bush sat on his hands as it became obvious we had an energy problem. In the last year of his presidency, oil rose to $147 a barrel. Oil rose so high that oil prices were a factor in the economic meltdown of last September. Very quickly, oil started going the other way as America stopped going places and as the rest of the world fell into a steep recession. Nobody was buying oil and a barrel of oil dropped to the low 30s. Unfortunately, conservative lunkheads who have trouble paying attention started traveling again and buying big cars. The Los Angeles Times have noticed the climb in prices:
At some stations in the state, $3 gasoline was old news. A Mobil station in Goleta, near Santa Barbara, was charging $3.69 a gallon; a Chevron in Shoshone, near Death Valley National Park, was posting $3.66; and a 76 on the Westside was posting $3.59...Death Valley? Now there's a metaphor. Look, the energy crisis is here. It's not going anywhere soon. During a recession, the use of oil drops. So does the price. But that doesn't mean the problem has gone away. So far, it's not clear that a significant majority of Americans get it. Maybe a small majority get it. But for things to change a majority of business people need to get it as well.
Here and there, one sees some glimmer of hope in the business community. There are people out there who get it, who have ideas, who have the know-how or who are close to getting the know-how if—and this is a big if—they can get help bringing their ideas to the market. This requires money. The problem is that if we wait around for big business to do something, the ideas and initiative and jobs will simply go overseas. The smart thing to do is to do what Reagan did in one of his few truly smart moves: get the government involved in stimulating new technology, this time in the alternative energy field. Here's an article from CNNMoney that offers a glimmer of hope:
Thousands of jobs are riding on Ener1's efforts to build the best car battery in the world.
The start-up firm is the only U.S. company able to mass produce batteries on American soil for an automobile industry poised to make a monumental shift from gasoline to electric power.
The company has applied for a $480 million government loan to expand its facility and hopefully allow it to land a big contract. If that happens, Ener1 says it will go on a hiring spree.
Maybe Ener1 deserves the loan and maybe not. But I know there are hundreds of small American companies that deserves such loans and that will be the backbone of a new energy sector that will power American jobs. This is the future. Not the business as usual we've seen for thirty years. Americans jobs depend on companies that develop and use American talent. Let's hope Barack Obama gets it. Let's hope obstructionist Republican fossils get out of the way. It's time for the future to arrive in America.