These days it is hard to be optimistic about the economy. The business of America has been in business for a long, long time. Business is not good. Many are optimistic about a bright, new, young President. I understand the power of hope and the need for change. It has been screamingly evident that we need new participation and real change for many, many years. I have no doubt our new President is bright, diligent and genuine of intent. The hope his election instills is vitally necessary and entirely insufficient. I know that it is near impossible to rebuild absent an overwhelming sense of the possible. Reconstruction requires drive and discipline to build a future better than the past.
We need public goods spending for maximum benefit and inequality reduction and we need it now. Without social glue, we risk more of what we have seen. A society comprised of many groups and individuals fighting to pocket gain and transfer pain, a group of partisans sinking the ship they must captain.
We remain adrift on rough seas. As the hours, days and numbers tick by we await new approaches and plans. New, innovative response remains beyond the sight horizon of this writer. The recent slide in the market is taking us back to late 1990s valuation levels. Stocks have returned nothing for better than a decade. Of course some sold and until recently dividends were often paid. Then again, things still cost much more than they did in the late 1990s. We are only beginning to ask what it means that money buried in the yard, at least, tied money invested. 18.5% slides in average house prices, 40+% declines in stock prices mean mass destruction of capital. We live in a capitalist country. As the name suggests, the destruction of capital poses existential threat to our economic system. We seem to have decided that we are fed up with and enraged at yesteryears' leading firms, executives and sectors. I fully understand. However, attacking the fallen satisfies only our senses of justice and vengeance. It is neither new, nor terribly productive. We still need and still lack a grand a sweeping plan to rebuild.
Real change, the type that generates well founded hope, requires prolonged and painful structural economic change. There is no outsmarting, stimulating or hoping this reality away. There is no more time and money to waste on any other project! We must budget our pain tolerance and borrowed/taxed monies toward those projects that generate maximum change toward sustainable growth. Our government cannot and should not try to transfer private balance sheet pain onto its books indiscriminately. We have $6.5 trillion in publicly held debt now. Almost half, or $3.2 trillion, is foreign held. Attempting to get back to where we were 2 years ago squanders precious time and treasure. Much recent response is guilty of wasting time and treasure.
We are a society drowning in inequality, debt, overspending, under saving and over importing. We need to forge ahead addressing all of these afflictions. We need public goods provision to address the inequality, debt and under saving. I see the first orders of business as investment to cushion the blow of the present recession. We need national health care for all Americans now. We have waited too long. This will prevent people from overspending on medical care, reduce inequality and protect the rising tide of unemployment from bankrupting, sickening or killing many Americans. A high quality public health care system is a public good that efficiently deploys resources to maximum benefit. It will also allow US manufacturing to be more competitive with foreign exporters -- many of whom have national health care. National health care should be a high priority. Preventive care reduces spending and increases health and productivity.
We also need a massive reinvestment in the affordability and function of our university system. America still enjoys leadership in this area and it is important for attracting leading thinkers and innovators. Higher education also assists our trade balance. We need a national merit based scholarship system that makes university attendance available to every truly talented student. We need to adjust our tax structure to promote employment and labor income. At present, it does not.
Most of all we need to produce millions of jobs with living wages and real prospects for advance with dignity. Credit can not fill in for earnings. Speculation can not fill in for earnings. Cheap imports can not fill in for earnings. Ideology can not fill in for earnings. Hope can not fill in for earnings.
These few ideas -- none of them new -- are only simple starting points for discussion. A new kind of discussion toward a new kind of economy.