Observations all along the line - Kimball & the Southern Panhandle First

It Seems You Can't Turn Either Way

Despite Wall Street’s newfound optimism and other indications of stuttering economic growth, close to 15 million Americans remain out of work according to reasonable estimates. This figure accumulates the unemployed, the long term unemployed and the “marginally attached”—meaning those who have flat out given up after dozens of months on or off the dole.

Now, there are countless plans to correct this problem. One group wants to cut taxes, especially for the wealthy. Another prefers to raise them, specifically targeting the wealthy. Others say the answer involves fewer regulations or a smaller government. Many insist slashing the debt will kick start things.

Yeah.

As columnist Heidi Moore wore, “What makes it a crisis is that we don’t seem to have any ideas on how to employ the unemployed.”

Well, there was that replacement NFL referee thing—until embarrassing calls ruined it for everyone. And if Beyonce could round up several unemployed look-alikes and send them on lip-synching tours, it would remove 20 or so from the rolls.

Every little bit helps.

Moore points out in a piece in The Guardian, an English paper, that costly retraining programs are out of reach of long term unemployed, and that corporate America—reeling from the recession—seems loathe to step in with assistance. The government is paralyzed, too. Congressional opposition prevents a massive infusion of federal spending.

Yes, I know—stimulus packages do little more than sputter and fizzle. The U.S learned this recently. Japan has been fluttering on deficit spending for the past couple of decades, with little to show for it.

A number of pundits insist that private sector initiatives always fare better than federal spending, anyway. But right now the one program that would put a few thousand people back to work involves a government investment in infrastructure repair and rebuilding. America’s bridges and roads are in a sorry state, after all.

Anyway, a quick look at the past would cause anyone to doubt corporate wisdom is this matter.

Certainly Donald Trump has carved out a niche for himself and provided jobs for a few camera crews—and reporters who cover the inane. But I refer to the case of Saab, the Scandinavian auto company that collapsed in 2010.

You see, Saab built some of the most astounding vehicles on earth. They could withstand the shock of hitting a moose at full speed or the unlikely scenario of being dropped, upside down, from a basketball backboard. But this kind of engineering cost money, and sales faltered.

In 1989, General Motors—later bailed out successfully by the federal government (like Chrysler in the 1980s)—bought into the company and demanded that the brand’s next model be a simple re-badging of GM’s Vauxhall Cavalier.

Saab refused, and created the sturdy and superior 900.

A few years later, GM insisted that instead of a new design—what would become Saab’s 9-3—the company just slap a different body and new badge on the Vauxhall Vectra.

Saab built their own model, with a longer wheelbase and different parts. Even the satellite navigation system was different because, as Saab engineer’s explained, the GM version ‘wasn’t good enough.’

Detroit pulled the plug on Saab in 2010.

This is the corporate method.

Government spending, meanwhile, once kick-started the American economy and sent it rocketing on a 30 year spree.

During World War Two, the federal government employed 12 million or so soldiers, sailors, Marines and coast guard. The government signed contracts with companies to produce goods for war for a guaranteed profit. The government put women and minorities to work, even calling on temporary laborers from Mexico to help out. After all, the nation was running at near full employment.

Bond drives helped pay for this. Meanwhile rationing forced consumers to save, leading to a pent up demand for good and services that exploded after the war. As one writer put it in 1946, “America has inherited the earth.”

The problem here, of course, is that we can’t follow that example again. So we are left without ideas—unless anyone wants to revisit my lip-synching scenario.