WHAT´S IN AMERICA´S FUTURE FOR JOBS & THE ECONOMY?
Gary Ater
October 06, 2009
...It's the economy stupid!
For someone that writes as many columns and articles as I have about the current political climate, it is understandable that there will be those that will immediately text me or send an e-mail message with their own comments or opinions. Many of the comments are constructive, some in support of my approach, or not, some are just interesting, and some need serious grammar corrections or major "spell-check".
However, in a recent response to an article of mine that had been picked up on Google News, a reader responded with; "OK smart-ass, how about giving us some of your gems on what to expect from your vast economic expertise? You are really good at telling us what went wrong in your 20-20 hind-site, but what should we expect in looking ahead? Or is your crystal ball only good for looking bass-ackwards?"
It´s a fair comment and request. Actually, I have written some past articles with some prognostications on what I thought was going to be happening in the country when looking forward. But I also stated at the time that my expectations or so called "vision" was not based on some vast knowledge of the nation´s or the world´s economy. My views were usually based on past historical responses to previous US economic down-turns or just some "seat-of-the-pants" ideas on what I thought was reasonable commonsense.
The problem today is that the issues and results of the past can only be applied to a small slice of today´s economic problems. Even back in the Great Depression of the 1930´s, FDR and his the "New Deal" had to start from scratch in developing new regulations, government departments and safeguards to prevent future "Great Depressions". And in that 20-20 hind-site, we can see that FDR, Truman and their administrations succeeded in developing an atmosphere for an expanded middle-class and a growing economy that lasted over 30 years. At the time, the United States just happened to be a massive juggernaut of world manufacturing and there were few manufacturing competitors in Japan and Europe, as most of their capabilities had been destroyed in the devastation of World War II.
Today, the new Democratic administration is having to deal with a new set of issues.
The US today is having to "fix" the affects of the past deregulation of the controls that had originally been there to prevent the current economic debacle. In addition, the drastic tax cuts and reforms for the wealthy that started in the early 1980´s with the Reagan administration, and were continued by both the Clinton and the two Bush administrations which were all a disaster. Those issues will probably take years to get back in line, if its ever possible that they can eventually be redirected. Remember, FDR was elected to four terms, and was followed by another Democratic administration. Today, massive changes may need to be completed in only two terms.
On the other side of the equation, even though World War II devastated both Japan and the European countries, during the rebuilding of their economies, they all developed variations of universal health care for all of their citizens which remains even today. As the US had not been bombed and damaged by the war, FDR was able to get unemployment insurance and Social Security passed, but with his death and with Truman having a Republican Congress, they were unable to get the health care programs passed. Due to that failure, the US manufacturing then slowly began losing its competitive edge against both Japan and Germany (and eventually S. Korea and China) as well as the US having quality issues within the electronics, steel and automotive industries.
As a result, from a world-wide economic level, in the past when the US economy caught a cold, the rest of the world then caught economic pneumonia. In today´s world economy, when the US get pneumonia, the other industrial nations just seem to get head colds.
So, in response to the readers request, once again with all of that hind-site, what do I see today when looking forward for the US?
I will lay out my thoughts in separate comments on the issues. In future columns over the coming months, I will also on occasion review these statements to see how close or far away my approach was from the final results:
THE ISSUES:
HEALTH CARE REFORM: I believe there will be a reform bill, hopefully with a "Public Option". It will probably rid us of the "pre-existing condition", from companies dropping people when they become ill or for no reason and it will stop placing financial caps on the benefit coverage. It will hopefully also reduce the premium costs.
JOBS: Even though the economy is getting better than was expected, the unemployment rate will probably hover at ~10% about six more months before it starts heading up again. (Economists say that the unemployment issue will not show any recovery until the job market starts adding 100,000 new jobs per month.) I personally think the majority of the US employers did a knee-jerk reaction in believing the economy was doomed for years and they then laid off too many employees, too soon. As a result, today the work-week is at an average of only 33 hours per employee, per week. US companies will not start to rehire until the work-week is back to an approximate 40 hour week average. In addition, with so many people being out of work for very long periods of time, skill-sets are being lost and some workers are leaving their specific job functions or are retiring early. As the economy recovers, there will then not be enough qualified, trained Americans to replace those valuable, previously laid-off employees.
MORE STIMULUS?: I don´t think there will be any consideration for more stimulus until the final 60% of the original stimulus has been allocated. I do however, think the administration will change some of the direction of the remaining stimulus toward more job creation. Even though the early stimulus package did save a lot of jobs for needed services such as local police, fire, and teachers, the country didn´t actually "see" those results. More effort needs to go into jobs for roads, bridges, schools, hospitals, parks and neighborhood renovations, etc. Also more effort on "Green Jobs".
UNEMPLOYMENT INSURANCE & COBRA EXTENSIONS: It is appearing that there will be more extensions to the unemployment insurance programs and to extending both the COBRA health insurance coverage and perhaps help the unemployed with the cost of the COBRA premiums. Both the Congress and the administration do not consider these extensions as being more "stimulus" spending. Instead, these are considered required temporary costs in order for the economy and the jobs market to begin displaying its correction from the original stimulus program.
IRAQ, AFGHANISTAN & GUANTANAMO: Guantanamo will not happen on schedule, but it will eventually happen. Troops in Iraq will come home, but a group will stay there, just as they did in Japan and Europe after WW II. Afghanistan will be the sticky issue. President Obama will send more troops, but not like the number for the "surge" in Iraq. Only time will tell how this will play out. However, due to President Bush´s inaction in Afghanistan for invading Iraq, going into the ninth year of conflict in a nation that has never been successfully conquered or occupied, Americans are very tired of losing their American troops in Afghanistan.
IRAN: I believe that President Obama and Secretary of State Clinton will show some back-bone in dealing with the Iran´s nuclear program. I believe that they will get the European allies on board, along with Russia in dealing with real sanctions against Iran. China will probably remain neutral. If the US and its allies are not successful, I believe Israel will do a strike of their own on the Iran nuclear facilities and a new set of problems will then begin. Due to the Bush messes in Iraq and Afghanistan, the US is currently not in a position of military strength for dealing with a third military conflict in the Middle East.
US TRADE AGREEMENTS: I am hoping that after the issues with health care reform and the economy are more behind the administration, there will then be efforts to dealing with NAFTA, CAFTA and changing the overall current "free-trade" approach to a more "fair-trade" approach.
Well there are my two cents for today. It will be very interesting to see how it all pans out over the coming months.
Copyright G.Ater 2009
Follow me on Twitter: gater01
Print
Email
