Bill Bonner of the Daily Reckoning has a plan for solving the economic problem. He guarantees his plan will result in full employment in just thirty days. I am not so sure. It might actually take 60, but it would work.
From Mr. Bonner:
First, why are so many people unemployed? The answer is very simple. Because there is no profitable work for them to do at present labor rates. Thanks to previous meddles, the US economy focused itself on building houses and importing geegaws from overseas for people who couldn’t afford to pay for them. This was a dead-end economic model. And the end came in 2007. Now, the latest figures show an uptick in manufacturing…which is clearly the direction to go. But it will take years before the US economy has made the adjustment to a new, healthier model…making and selling things at a profit.
In the meantime, unemployment levels will remain high.
But wait…there’s more. For which the adjustment is taking place, US authorities are trying to block it. How? By taking resources from the new, unborn industries and using it to prop up the old, dying ones. Like Wall Street, for example. The financial industry grew like Topsy in the bubble years. It began to shrink in the crisis of ’07–’09, but the feds came in and pumped more than a trillion dollars into the financial sector, producing record profits for the big banks, but depriving the rest of the economy of much needed capital.
Not only that, the feds also take the pressure off labor to make adjustments. Food stamps, minimum wages, unemployment compensation, make-work, shovel-ready boondoggles – all these things cause workers to think they can continue as before…that a “recovery” of the good ol’ days is just around the corner…and that they’ll soon be earning as much as they were in 2007. Maybe more!
Want to really fix the unemployment problem? Listen up. Eliminate all bailouts, subsidies, giveaways and support systems – both to business and to labor. Abolish all employment restrictions and employment paperwork. All free labor – undocumented non-citizens – to compete equally with native-born workers. Cut taxes to a flat 10% rate for everyone. Abolish every government agency that begins with a letter of the alphabet. Then abolish the rest of them.
To read the full article, go here.
