Dana Vashon said something interesting on Red Eye a few weeks ago, It’s not a lack of demand, it’s a drought of good ideas, and it’s got me thinking.

Let’s understand where we are. We’re not in a recession. Recessions are a psychological condition where a people hangs onto its money due to uncertainty. In our case though, the recession has lasted too long, and we know that many of our economic loses are permanent. This is a retraction, a permanent change in size.

We’re undergoing an information and technological revolution, and many of the jobs we’ve lost have been replaced by that technology. Much of the consumer demand our economy became accustomed to was fueled by home equity and wildly available credit. But through the housing collapse we lost over $2 Trillion in home equity, which shut off the easy-credit, and that won’t change because the home equity came from a pumped-up housing market. We’re also seeing our overseas competition advancing in all areas, including technology, America’s former monopoly.

During a recession, stimulus can be effective in “shocking” the economy back by filling in the missing demand and alleviating uncertainty. But in our situation, the lost demand is permanent, that’s why stimulus has been so miserably ineffective (and the fact that it wasn’t honest stimulus). The thing we’re trying to shock awake is gone. Washington sprinkling borrowed money into our economy isn’t going to recreate those lost jobs or consumer spending. Many of the unemployed people lack the skills required by the new jobs, and many of the consumer spenders now have under-water mortgages, are paying high rent, have ruined credit, or are trying to pay down expensive debt. Stimulus won’t make those people spend.

Technically, we’ve recovered from the recession, according to growth figures. The trouble is, we’re still missing the jobs we lost. Businesses and investors both have a lot of money safely penned-up. One of the reasons they’re keeping this money safe, besides the high level of uncertainty, is the utter lack of good ideas to put that money in.

To use Dana’s example, Facebook is valued at nearly $50 billion, and what does it do? It reduces productivity… Why are people investing in Facebook? There are no better ideas worth investing in.

That’s an old and annoying Democrat talking point: Rich boss pays a lower tax rate than his secretary. Indeed, raising the cap gains tax would reduce investment, which is the opposite of what we need. Besides that, Buffet’s tax rate is only lower because he isn’t counting the corporate tax which is paid on that money too.

It’s annoying that our ‘leadership’ is unwilling to fix things. Here’s a campaign slogan: Don’t fix it, tax’n patch it. Our debt is racing toward $20 Trillion, and the best idea they have is a runt version of the trickle-style stimulus we’ve been using. We’re going to trickle ourselves to death.

We need serious reform! What about reforming Medicare? Use means testing or raise the age. Because if we can get the deficit under control, the debt won’t matter. YES – our $15 trillion debt is offensive. But with the size of our GDP, it’s manageable. What makes it not manageable is the deficit and the lack of willingness to balance the damn budget.

If we could get the deficit under control, then we could do something serious, like drop $4-5 trillion on infrastructure updates. Maybe we could set up a smart-grid, something that could actually handle and distribute all this electricity the Liberals are demanding to magically appear from wind and solar. Maybe we could set up a super-broadband, and bring it to every town. Maybe we could update some water and sanitation.

What about reforming the tax system? You want to increase exports? How about taxing all the shit we buy, which includes all the imports we buy, and stop taxing the American work that goes into making our exports? Something like Herman Cain’s 9-9-9 plan. That kind of change would be profoundly good for both business and government efficiency.

What about zeroing the cap gains tax??? Yeah, it would hurt Warren Buffet’s feelings… But all the non-deranged people and businesses would have to let go of their money. They’re hanging onto it out of uncertainty: Risk. The way you overcome risk is with reward. Lower taxes on investment means higher reward, resulting in higher tolerated risk, and thus investment.

What about all these rich people who aren’t struggling? We could just tax them more to pay for bills labeled according to the electorate’s biggest current concern. Then we wouldn’t have to do any actual reform right now that could frighten old people and threaten Obama’s reelection. Even if we can’t force it through, we’ll be able to vilify the Republicans and set them up as the “Party of No,” or the “Anti-Jobs Party.” We’re already trying to get, “The Tea Party Recession” out there in preparation. Yes We Can! Yes We Can!

Everyone catch Obama’s speech???

No surprises, although, he did mention Medicare. He started off describing his American Jobs Act (or some-such name) which is basically the same little stuff we’ve been doing since 2001: Infrastructure spending, payroll tax cut, and a hiring tax credit.

It’s troubling to me that he’s still calling this a downturn, and claims this bill will ‘jolt’ us out. We’re obviously in a contraction, and simply need to evolve in the new economy, which requires serious reform to quicken, not more duct-tape and bailing-wire on our old ways. (Infrastructure is important to this, but it’s the fact that he thinks infrastructure spending will stimulate the economy that’s troubling. Didn’t he learn that one?) He also claimed this bill will create jobs upon jobs… Believe… Of course, none of this would ‘jolt’ our economy regardless. It’s way too small of a bill. We’d need $2-3 Trillion for any affect.

The first really funny part was when he claimed this bill will be “paid for.” Yeah, I know, right? Guess how? Well, you know how there’s that bipartisan deficit commission that was supposed to figure out some $1 Trillion in cuts by Christmas or our military gets gutted? Well, he wants them to find cuts in proportion to the American Jobs Act as well… Yup…

Next he described a second piece of legislation, some kind of debt-fixing bill. And here’s where I realized I’m finally learning how to listen to this guy talk. He started out with some general specifics – basically saying that the bill will raise taxes on the rich. Then he started shifting between phrases that indicated what the bill actually contains, and phrases that indicated how he thinks things should be. That’s his trick. That’s how he sounds so smart and reasonable. He mixes insinuation with actual claims, wishes with actual legislative clauses. He says what the bill will do: raise taxes. Then he recites a few lines of poetry about how Medicare needs reform and how our debt needs to be brought under control, neither of which the bill actually addresses.

It’s like a sales person selling an automatic egg sheller. “It cracks eggs. You shouldn’t have to get your fingers messy. It separates yolk from white. You should have significantly more time for the important things in your life. It will handle as many as six eggs at a time. You should have a pay raise every week, and you’re sexual performance will likely improve noticeably.”

After that he drifted into pure song, glorious ambiguous inspiring song. It was regular sweet Obama poetry, really nice, until it took an abrupt turn into out-and-out campaign rhetoric. It was his usual style. He mischaracterized a few Republican arguments, and made arguments against those mischaracterizations. Just as he did earlier describing his deficit bill (his trick) he subtly started describing how great the world should be, and how certain awful things shouldn’t be, effectively insinuating that the evil Republicans were the antithesis of these grand ideas. How annoying…

Oh yeah, two other funny things happened. Throughout the beginning of the speech, when he was talking about the jobs bill, he kept prompting Congress to action, “Act now!” Over and over. “Don’t wait!” I kept expecting to see a 1-800 number to start flashing at the bottom of the screen so I could call and order. And seriously! If implementing this plan is so ass-puckering urgent, why didn’t you present it weeks ago, before your vacation? Call now! It’s not like this thing is some kind of invention. It’s a leftover casserole. These prices won’t last!

The other repetitious thing, for half the ideas he described in or around the jobs bill (mostly around) he claimed were Republican ideas, ideas Republicans had supported in the past. If you weren’t already familiar with the current political climate, political history, or Obama’s style of feigning a bipartisan image, you might think Obama was just stealing all the Republican’s ideas.

Bottom line? This was more a prime-time campaign speech than a proposal. Sorry this was so long.

I managed to get an outline of Obama’s jobs plan. What do you think?

Obama’s three-part jobs creation plan. A continuation of WTF (Win The Future)

1.       Quick Jobs© Stimulate Private Hiring
We will begin awarding private companies who hire a worker who has been unemployed for more than 73 weeks, has participated in a Federal, State, or local jobs training program, and has successfully been accepted into the Quick Jobs© program, with a 6-month membership in Amish Mart’s Jelly of the Month club. [counted as taxable income]

2.       Jobs-Jobs-Jobs© Green Jobs Program
We will start dumping all kinds of money into Green projects. Vote for this bill and some of this juicy cash will end up in your district.   Acceptable projects will include wind and solar farms. Once these farms are up and running, they will stimulate someone to start building the necessary electrical infrastructure necessary to actually bring power from these types of energy plants somewhere useful, which will create even MORE jobs.

3.       Fair Fees Service (FFS)
In order to fund Obama’s New Deal without more Bush-esc deficit spending, and to maintain his promise not to raise taxes on people earning less than $250k, we will institute Fair Fees. These fees will be accessed on hard work and good ideas.

Workers working more than 30 hours per week will be charged a 5% fee on all wages over 30 hours, and %8 on hours above 40 hours. In addition, anyone in an advanced position (obviously having worked hard already) such as management or company officer, will be accessed a yearly fee, in addition to hourly fees, of $1000. Salary employees will be assessed a 3% fee on all earnings. A yearly fee will be accessed on all professional degrees, excluding law and journalism degrees.

Fair Fees will be accessed on all good ideas by the newly created Fair Fees Service, a vast bureaucracy that will create thousands of new jobs. The fees will be calculated according to an adorably confusing algorithm that will require an advanced degree in accounting to understand, thus resulting in even MORE jobs, and will in all likelihood result in a new accounting specialty in schools, requireing new teachers, and EVEN MORE JOBS.

We will fund the FFS with fee calculation fees. These fees will be a flat rate of 7% accessed on all Fair Fees, as well as all other non-tax fees, non-tax penalties, non-tax taxes, and non-tax calculation service fees and non-fee payments and penalties.

Wow! We’re really getting excited about this new program! The more we talk to each other about it, the more we’re convinced it will ‘fix’ the economy. Too bad we have to worry about the Obama-hating Republicans and their deformed child The Tea Party slowing down Obama’s ingenious progress with their blind and ignorant Obama hate.

The other day I heard a Liberal talking about some possible ‘good’ that might come out of the hurricane. His thinking was, that even though hurricanes are bad, the reconstruction afterward would be good for the economy, new jobs and so on. Because, hey, look how good the post-Katrina construction has been for Louisiana.

The sad thing is, I’m not even surprised at that kind of utter stupidity. It reminds me of the guy calling the snow storm that shut down NY, “14 inches of pure stimulus” because he saw people shoveling snow outside for money. *sigh*

To think such wildly stupid things, doesn’t it seem like you’d have to be a kid, or an adult with a brain injury that makes you as dumb as a kid? “After there’s a disaster, there’s always employment.”

I’ve got the cure for the economy! Let’s get a bulldozer and flatten all the homes and businesses on on all the major roads. Or maybe I’ll go burn down Meijer. Just think of all the employment that will result in over the year or two it will take to rebuild!!!! Just like the snow storm that shut down a whole city so people could make money shoveling, and just like the hurricane that’s damaging buildings and is shutting down businesses and stopping human activity, there will be construction jobs we can see afterward. Never mind the numerous more jobs lost due to inactivity and destruction of businesses.

Things like this make me want to join the Tea Party’s Nazi-esc takeover of the government. I know I know. How could a reactionary movement of employed people perform a Nazi-esc takeover of a government when their single tenant is to stop the growth of government? Well… I don’t know. Ask the libs. They know. It seems to me a Tea Party would have stopped Hitler and his Brown-shirts in their tracks.

Ending the unemployment benefits extensions would effectively lower wages for shitty jobs – logically – by increasing the demand for shitty jobs. It might also have the effect of decreasing the number of full time jobs, replacing them with more part time jobs, because it’s cheaper to have three employees working 30 hours each than two working 45 each, because of benefits.

I doubt employment will be pulled out of the crapper any time soon. They were talking about unemployment numbers on NPR. It sounded terrible. If you count the people who have temporarily given up, and the people working part time jobs while they look for full time, the unemployment rate is estimated to be at least 16%. Basically, we have the same number of available jobs as we did in 2000. So the only thing that will really fix the job market is a decade of growth, unemployment benefits or not.

I just hope we elect a rational adult this time for the presidency. Seriously. Someone with the ability to negotiate a deal between a fat kid and a vending machine, who can lead a group of flies to a pile of dog shit, someone who can show a little bit of character once in a while, someone who can/will do some honest math. Is that too much to ask? Am I being audaciously hopeful that we might elect a leader, not a character, not an icon, but an actual implementer of ideas?

The S & P recently  lowered the US credit rating outlook.  The reason for the downgrade, in a nutshell, was:

The United States has a large debt and deficit compared with other highly rated nations, and unlike with those other nations “the path to addressing [the debt and deficit] is not clear to us.”

That’s kind of a leadership – dare I say image – problem, isn’t it??? lol Glenn Beck has been warning of this for two years. lol

I think liberals and democrats have some wrong thinking on the idea of paying higher taxes. Like I said a couple posts ago, rich people will be investors, if not outright businesses. Taxing them takes carefully targeted investment out of the market, and then tries to ‘invests’ it otherwise according to bureaucracy. If the electorate think society needs something that only government should provide, why can’t regular people pay and even share for it – minus financially immovable people of course?

Also, there’s no reason we can’t get the economy back to 90s strength. It’s going to take risk and new ideas of course, and taxes just slow all that down. Once we’re back to 90s strength, then you can start raising taxes on The Rich. It’s actually a good idea then, in order to slow the economy down, to prevent all kinds of goofy crap, and build up a surplus to use in the next downturn.

That’s the idea anyway. The problem is wanker politicians who spend and pump regardless. Bill Clinton explained on an interview I heard a while ago that the reason the housing market was pumped up so huge was because it was the only thing growing our economy after the tech bubble blew. We kept low interest rates even though the housing market was hot as hell – getting people buying and selling homes, stuffing all the cash up in the air to be counted. Ooooooh, Mr. Politician, you’re making the economy so good – yeah!

So we have established the situation is bleak, but I cannot accept it is hopeless and not worth trying something.  Remember that our main goal is to save the state, not the city.

I think the first place to start is with the churches.  Encouraging non-US, preferably black, missionaries to go to Detroit would be beneficial in rooting out a lot of the corruption.  The problem is not simply that Unions are running amok or that Democrats are keeping the poor poor.  The problem is simply the human condition – pride.  It is not money that is the root of all evil, it is pride.  Men seek power and glory out of pride.  Men are selfish out of pride.  We are also lazy.  This problem needs to be addressed first and concurrently with any other program one decides to institute.

Secondly, professional black businessmen, actors, and artists of good character need to get into the inner city and start mentoring not only children, but adults, including in the prisons.  Natural leaders from within need to be supported in every way possible.  Maybe Alfonzo could lend a hand by coming into the high schools and middle schools and giving talks similar to his videos.

The social programs need to be reveiwed for success/failure and be deleted as found necessary.  If the people are being held down by the “helping hand” of the government, the hand needs to be removed.  Basic needs (food, water, and warm clothes) must be met; beyond that we only weaken the poor by making them comfortable.

Michigan needs to hire Rudy Gulianni to come and run Detroit like he ran New York.  He turned that city from one where you were afraid to walk around in, to one where you felt safe.  Of course, it has to be safe, not just feel safe.

A bipartisan organization must be formed to weakenthe Unions.  “The Next Job Could Be Yours” campaigns would be started state-wide.  The idea is not to remove and completely destroy the unions; the unions have done great things for the American worker over the last 150 years.  But the UAW in particular has increased wages and benefits so much that fewer jobs are available.  If you can pay $100 per hour in wages and benefits, would it be better for a city to hire 2 people and pay them $50, including benefits, or to hire 1 at $100?  When you push the wages too high, you either destroy the business you work for and everyone loses their job, or you just make it impossible for the company to pay both you and your fellow worker.  So who gets fired?  You or him?  Worth the risk?  We’ll have to go deeper than this.  I don’t know yet how Gettlefinger thinks.

Detroit could take a while to fix.  In the mean time, we must focus on other cities and strengthen them, like Ann Arbor or Grand Rapids.  My vote would be to strengthen GR.  The population is mostly Republican and that can only bode well for the state.  The city was on the rise before the recession, but they are hurting like everyone else.  Instead of moving large companies into Detroit, we should subsidize construction in Grand Rapids.  Plenty of infrastructure exists already.  Opportunity will take people away from Detroit and push them to GR.  As the population of Detroit continues to fall, our job of fixing it will get easier.  A red Michigan could be a game-changer in national elections.

So this is what we have so far with regard to key components necessary to revitalizing Michigan:

1.  Cut taxes, at least short-term (do we want to put an unemployment goal in here before we raise taxes a little? 4.5%?), for the top 1-2% income earners to create jobs.

2.  Fight the unions.  Now, let us discuss this approach.  Do you convince people one by one, to drop out of their union?  How do you bring down that establishment?

3.  Cut spending.  This will require us to look at the Michigan State Budget.  We could create a website that reviews the budget and proposes cuts to programs and then allow people to give there a opinion of the cut (or increase).

4.  Happier people are more active and social, or is it more social and active people are happier?  Any way, the State could subsidize companies to install full spectrum lights in their offices or install them in street lights so that they are full spectrum lights during cloudy days and normal lights at night.  Thoughts?

5.  Force businesses to build alongside the Detroit river and create a waterfront park like Wyandotte has.

Anymore?

Yes, just picture it.  We could have a bar (English or Irish bar) like the O’Shallaly (ever been there – fricken blast).  And in the summer we could show movies in the park.

Oh that’s easy. One of the causes of these problems is tax cuts for the rich. And the way you get jobs is put people back to work. Then people feel good about this and that and spend money, your boy, healthcare, and so on…

http://www.foxnews.com/search-results/m/28899119/jobless-rate-proves-stimulus-success.htm#q=tax+increase+jobs

… as congresswoman Carolyn Kilpatrick explains.

But for the non-stupid, the way to create opportunity is the big question. My answer will be the old tried-and-true Conservative argument: Hey Uncle Sam, get your fucking mule out the way – I got all kinds of shit I want to do! In other words, people create opportunity. If you want them to do more of something don’t tax it or tax it less. So cut taxes on putting forth effort.

Be careful though. This is necessary but short term thinking. We can’t just deregulate and cut taxes all day long. We need to tax so we can pay for decent public schools so kids like Bill Gates will have access (as billy uniquely did) to some seriously fancy hardware systems and come up with the next revolutionary thing. And we need regulation to make up for irrationality – like not noting that we were in a housing bubble or allowing 10/1 over leveraging in derivative funds. We have to be sure not to try regulating our way to prosperity too – like using Fannie and Freddie to hand any jerk a home loan or two job or not to keep the up-cycle cycling up.

I’d like to say the solution is cutting spending. This would allow blessed tax cuts which usher in business like a land-run. But promising spending is the bread and butter of the Liberal Democrat campaign machine. AND – once you start a program or entitlement repealing it is a political nightmare not to mention the mess of trying to take it apart without a big mess and screwing people.

Of course, as much as Democrats shit on tax cut ideas – how do they court business into their areas? The same way everyone else does. They give obnoxious concessions to giant companies to move in. So you end up with the worst of both worlds. One giant not paying taxes with all the job creating companies footing the bill.

So – the solution: I think we need Obama to come to Michigan and give a speech. He’ll give us plenty of ambiguous andunrealistically optimistic solutions, blame everything on his political opponents, and give us some industry leaders to vilify. He might even try to sell the idea that new monstrous bureacracies will create opportunity.

But seriously – bottom line, make nice with business – all business. Business is the essence of society.

Divinity Dove, Dr. Dove, and Professor Dove suggested some incentives to bring young professionals and businessmen to Michigan to help revitalize the state. For example, full spectrum lights, student loan assistance, parks and nature development along the detroit river, etc. Good grief you guys. You are recent graduate (wana-be) x-Michiganders. Would any of that shit keep you in Michigan? No. Of course not. You’re going to go where the opportunity is that opens up to you. So – Michigan needs opportunities opening up in Michigan if they want to keep young people. Not the other way around.

You can’t just offer some incentive to draw people in and hope that turns things around. Squirrels don’t cause nuts to grow on trees – they go live where nuts are growing on trees. That’s like the Dem philosophy of “creating” jobs to turn back growing unemployment. That’s not how it works. You need to promote business so actual opportunities will open up.

Like the clowns running Washington… Yeah, by their standards I could create 10,000 jobs with only $100,000. All I’d need is a few empty lots, some shovels, and some news paper ads – some offering work as hole digges and some as hole fillers. Yeah – that would pump $100,000 into the economy and put some people to work for a day. Would it do anything? NO. Would it create any economic activity? No. Would unemployment go down? No – well – not until more of the people looking for work give up anyway.

But wait! What about the economic activity produced when the workers spend their wages?

Well – that’s actually negative economic activity in a sense, because you have to tax someone – before, now, or in the future – to get the $100k to pay the wages. And no doubt – those taxes were/will be/are on business and entrepreneurs who otherwise would have spent the money creating economic activity (investing) which would have created actual opportunity.

Some people might think I’m simply misunderstanding the economics behind such thinking. So here’s what’s going on. The stimulus – which is similar to my hole digging idea – is an implementation of Keynesian economics. It’s a simple concept. Government regulates interest rates, banks, and stuff to stabilize business cycles. But if these controls aren’t enough and the economy slows down too much government picks up the slack by spending. The concept itself is sound.

The ‘downturn’ becomes apparent – or more apparent.
People slow spending (due to unemployment or fear of)
Sellers cut back orders and cut employment
Producers cut back production and cut employment
Loop back to step 1.

The idea is to stop this cycle, or prevent it. So government dumps cash into the economy in the form of spending to take up for slowed people spending – with the idea sellers will stop cutting orders and producers will stop cutting production and employment will stabilize.

I don’t see this method as being the “American” way of doing things, nor do I think it’s the most effective way to recover an economy. But I’m not in charge. Liberals are. And Liberals like this method because it’s yet another opportunity to further Liberal causes and generally redistribute reward. Regardless – as I’ve said – the idea is valid.

Here is the small problem though: Obama isn’t following the idea. This Economic Recovery Act business trickles the money out WAY WAY late and trickles much of it into state bureaucracies and infrastructure projects. This means the $700 billion isn’t getting in there and replacing spending – hell – they still have half of it pilled somewhere and aren’t organized enough to avoid fraud – one of the big weaknesses of the Keynesian idea. It’s a small matter though because I don’t think even effective Keynesian stimulus is what helps the economy. I think it’s the simple sense that some higher power is working to fix things. It gives people confidence – which is essentially what an economy is.

Here is the big glaring problem. You can’t try to stimulate an economy with clumsy “trickle up” stimulus and at the same time scare the shit out of investors and businesses!!! Everything from Obama bashing the bank CEOs to Pelosi ramming though cap and trade, the whole bag of anti-business pro-littleguy DESTROYS confidence.

And without confidence, even if people aren’t laid off, they slow spending. Without confidence sellers cut orders and employment. Without confidence producers cut production and employment. And without confidence we loop back to step 1.