A Few Thoughts on the Current Economic Debate in America

There is something missing from the current economic debate in this country.  Well, to be honest, there are many things missing, but let's just start with the big one.  We don't make anything in America except cars and cookie-cutter housing developments.  Virtually everything else that Americans rely on, are hooked on, and mindlessly desire are all made in foreign countries.  Meanwhile, President Obama keeps talking about the need to create more jobs.  In the words of Matias Vernengo: "Somebody should tell the president that one of the main reasons firms innovate is because they expect people to buy their goods, and that requires demand expansion. And education is certainly better than ignorance, but people with diplomas may not find jobs, which must be created by an expansion in demand."  In other words, if people don't have buying power, companies don't have production power.  So even if the government began to invest like crazy in all kinds of new industries, jobs might be created, but they all might as well be temp jobs, because there would be nobody to buy the things we are making.  At least not when the tax rates on the poorest among us are rising and falling for those at the top.  

Just once I'd like someone in government, on either side of the political spectrum, to admit that we, as a country, really screwed the pooch when we allowed the Clinton Administration and the rest of the neoliberal money worshipers to dupe the American people into believing the concept of "free trade".  The myth of free trade ruined what little manufacturing base we had left in America after the Reagan Administration (remember him?) got done with it's carnage.

The current debate about how best to rescue America from itself should not be absent of the importance of demand.  Furthermore, we should be honest with ourselves about what we actually need in our lives.  It's as much a behavioral issue as it is a economics issue.  Perhaps we don't want to get into the business of making electric coffeemakers or computer mouses, but things like clothes, building materials, and all other sorts of items we actually need in our daily lives could be more readily produced here.  And it stands to reason that these items could be produced by workers being paid a family-supporting wage, at factories that are sustainable and efficient.  That is where some steep government investment could really come in handy, while also creating demand in the marketplace.

What we need is not just jobs, but to end what Vernango calls "the war on demand".  Even a pot-smoking socialist like me can see the use of supply and demand.  Let's just get rid of the concept of free trade and free markets, because anyone with a modicum of sense knows it's a farce.