Saturday, March 29, 2008

SOLUTIONS, NOT SPEACHES

It is 2008. The US is embroiled in a five year old occupation of Iraq which the administration persists in calling a war and has cost more than 4000 lives and hundreds of billions of dollars. Oil has topped $106 dollars per barrel; the US Dollar has fallen so low that we have become the bargain basement of the world, millions of American jobs have been outsourced to the third world while millions of American families are about to lose their homes to foreclosure. We have few real allies left in the world, the Middle East is about to boil over while we have no troops or equipment let to protect our interests, even at home, and we are entering an election cycle that finds the country nearly as vehemently divided as we were in 1860 before the Civil War. More than 45 million Americans are afraid to get sick because of lack of health insurance and we have more people in jail, per capita than any other country in the world, including China.

With our nation at its lowest ebb in more than a century, and an administration whose only lasting memorial will be to prove that our democracy can survive even its staggering level of malevolence and incompetence, those running for the presidency, the highest office in the land, feed us speeches, not action. There are three people who may occupy the Oval Office next year; each is a Senator, each spouts platitudes about what is wrong and right with America, and each espouses a plan to make things right when they get into office. Not one has returned to the halls of Congress and introduced legislation to make anything right. They are too busy trying to convince people that their election will make their lives better to do their “day job” and actually try to make their lives better now. With that in mind, here are the two things that can be done right now that can turn things around even before they take office, if we have the political will to do them.

First and foremost is the housing and credit meltdown. It is the single greatest weight dragging our economy and dollar down the drain, and the easiest one to solve. People need to be able to stay in their homes and lending institutions need to feel secure in their loans so that they can once more extend credit and shore up the underpinnings of our economy. If we “bail out” the institutions, as our administration proposes, that leaves them weak but solvent, while it has no effect upon the millions of people being evicted from their homes. If we bail out the borrowers by paying their mortgages up to date, or even taking them over, we will have spent billions of dollars and still have changed neither the economic environment nor the future for the borrowers, many of whom will default again. Moreover, such bailouts are simply not affordable while we prosecute foreign military campaigns while maintaining tax cuts for the most wealthy individuals and corporations.

Let’s begin with a compromise solution that solves several problems at once but with a much lower price tag than either separately. I propose that the federal government should guarantee mortgages for those with credit scores below 750 (those with credit scores above that do not need the guarantees). This will have the same effect that occurred when the government guaranteed the money in people’s bank accounts during the depression (i.e. the FDIC and FSLIC), and when they guarantee student loans; it will keep interest rates low for the people who can least afford to pay high interest rates. At the same time, since lending institutions will now have virtually no bad loans, they will not only be less hesitant to lend money (and thus ease credit restrictions) but will need to keep less reserves, making more money available for lending. Moreover, the housing market, now in its worst slump in decades would improve almost overnight. The equity in people’s homes would rapidly increase again, making them both good investments for people and good collateral for the lenders and the government (for those few who repeatedly default on their mortgages). More than all of this, it can be accomplished with nothing more than a “promise” from the government, leaving the bulk of any outlay to support such guarantees further into the future when our overall economic situation would be improved.

As the housing market rises again, so would all of the secondary markets including building materials, labor, furniture, landscaping, etc. Jobs would be created in record numbers, wages would rise, and people would be able to repay their loans and still feel sufficiently secure in their financial future to begin to spend more and thus bolster the retail sector again. In short, this would repair one leg of our bipedal economy and allow us to begin to regain our economic strength.

The action that needs to be taken immediately involves energy. We are enmeshed in foreign adventures in order to secure our oil supply. We are borrowing money from our enemies like China, in order to pay the OPEC countries (most of whom hate us and many of whom finance the terrorists who attack us) for their oil. We are the most powerful nation in the world and we are beggars who must kowtow to rogue states and build our national policies around their 13th Century ideas so we can survive. They own us now, and we’re selling our national soul to pay them off.

We need a “Manhattan Project” for energy. We have most of the technology we need to begin, but neither the infrastructure nor the political will to use it. So let’s take the following steps starting now:

  1. Within five years, all new cars produced or introduced into this country must be electric. That means either “plug in,” fuel cell, or some other technological basis for producing electricity. Moreover, all cars currently owned must be converted to hybrid status, or to use an alternate (non-fossil) fuel within the same period of time.
  2. Secondly, all new commercial construction should be required to incorporate solar panels into their design so that at least 25% of all energy they use comes from these panels. This would not only lower their operating costs, and allow them to feed energy back into the grid when they do not need it, but the increased production of such panels would tend to lower their price while increasing their efficiency.
  3. Thirdly, the sale of incandescent light bulbs, already an anachronism, would be halted, and replaces with newer neon or, better yet, LED’s.

The effect of these cumulative measures would not only be to make us energy independent within a few years, but to create entire industries in this country which would produce innovative products that we could then export to other nations, thus reversing our trade imbalance. These measures will not come without federal mandates, but once in place, will repay both their cost and their inconvenience in a very short period of time.

Finally, we need universal health care; not a hodgepodge of mandates for people to purchase insurance from companies that can only make a profit by restricting care, but a central payer system in which all American citizens are enrolled from birth. Certainly, we can leave private medical practice in place, and I do not pretend that there would not be a two tiered system in place with those who can afford to pay for their care (or insurance) getting care more quickly and easily than others, but no one would be afraid to get sick, we could mandate “wellness” measures, and business would no longer be so encumbered by the cost of health care for their employees that they can no longer compete in the world market. Health would increase, profits rise, and taxes, even if not raised to pay for this system would flow to the government from increased payroll and profits; thus making all of the above affordable.

The time is now. The place is here, and the people to accomplish it are us. It is no longer a matter of preference, but both individual and national survival.