Quote of the day: We do not have grown-ups in Washington

Watch "The Economic Argument is Over – And Paul Krugman Won", Daily Ticker, Henry Blodget.

Gloom and doom or bloom and boom?

Even among well-off people one hears talk of the bad economy.  Yes, there are too many people without jobs or too many people that are earning far less than they would like.  This is not good.  But not all people are without jobs and not all people are earning less than they would like.  These are not only the one percent.

As I read about manufacturing increasing, about companies not finding enough skilled employees, about all the new brew pubs being opened, seeing so many apps for iPhones being produced, and so, so many people with cell phones, lap tops, and tablets, the economy can't be that bad.

Of course it's bad if you've been kicked out of your house and lost all your equity.  But there are many others still in their houses.

Daniel Gross wrote "Good News for Jobs: Rising Demand", Yahoo Finance, 2012-03-28, giving numbers for increased housing starts, increased remodeling permits, and increased sit-down restaurant business.

As more people are working, more people are spending money, which puts more people to work.

Did Bush's or Obama's stimulus packages lead to this improvement?  Probably not.  Well, stabilization of a bad situation helped, and once things are stable they can improve.  Did high taxes hinder this improvement or low taxes encourage this improvement?  Probably not.  Many economic ups and downs happen independently of the tax situation.

I've often said that the government shouldn't be providing tax breaks for certain industries or subsidizing others.  These often have limited impact and often backfire.  What it should do is increase and target its buying.  Replace vehicles and computers more frequently.  Want higher gas mileage nationally, increase the fuel economy requirement for government cars.  Want to promote alternative energy; put alternative energy sources on government property, even if they are only supplements.  Alternative energy was set way back when Reagan took Carter's solar panels from the White House.

I think the problem is that we expect Presidents to micro-manage, not govern.  That is, favor this group or that group instead of providing a broad, stable framework for people to make decisions.

Is it time for new mascots for the political parties?

While reading some book or newspaper, I wrote this note: "Appropriateness of party symbols. Elephants lumber over everything to follow old paths (think of the movie "Elephant Walk"). Donkeys are docile and will follow whoever is jerking their chain, er, pulling their leash.

Maybe the Democrats should adopt a fawn as their symbol. When threatened they seem to roll up and hide in plain sight. See "Fawn hiding in plain sight".

Maybe the Republicans should adopt a hippo as their symbol, as in hippo-crite. They want to cut spending in other districts, but not their own, even when the projects are similar. See "Tea Party Pork Binge: Conservatives Brought Nation to Default & Ask for Govt. Handouts", Daniel Stone, The Daily Beast and Newsweek, 2011-10-30.  They even use some of the same arguments they derided when others used them. Hm! Both elephants and hippos wallow in mud.

If you really want to create jobs…

The President claims the stimulus created x jobs.  Republicans claim tax cuts will create y jobs.  Developers claim waiving the zoning rules for their mega-projects will create z jobs.

They all miss the point.  Many jobs are gone forever because of productivity gains, automation, and changing product and service mix.  A stimulus is not going to reverse productivity gains.  Tax cuts may only decrease jobs because of investment in productivity.  Mega-projects may create jobs for a year or two, but then there will have to be another controversial mega-project to hire those laid off after the previous mega-project.

If you want to create jobs in the short term, here's what you'll have to do.  And few will be happy about it.

Take out all self-service machines.  More bank teller jobs will be needed without ATMs.  More pump-jockey jobs will be needed without self-serve pumps.  More elevator operators will be needed without automatic elevators.  Take out all drink and food dispensing machines.  Replace them with staffed snack bars.  Cut off direct dial calls.  Operators will be needed to place calls outside the immediate area.  Ban email and online payment.  Mail carriers have delivered letters, bills, and payments successfully for decades.

We will all lose a lot of convenience and pay more for goods and services.  But, what the hey!  We won't have to pay the taxes for unemployment benefits.

But if we keep the taxes the same, maybe we can use the savings to create even more jobs.  Let's run all bus routes ten minutes apart from five in the morning until one the next morning, seven days a week.  That will save us the costs of a car.  Let's give 24-hour service on pothole repair.  That should also save us a lot on auto repair.  Let's increase traffic enforcement.  The increase in enforcement will save us on insurance, generate some funds to pay for the enforcement, and save on health costs with reduced road rage.

I think only two systemic changes are going to bring about real job growth – free quality health care and free quality education from pre-school to university.

Our health care expectations give a double whammy to job creation.  First, employees expect health care insurance and employers need to provide health care insurance to attract employees.  This increased cost reduces employers willingness to hire.  Second, people who want to quit their jobs and start a new business are reluctant to do so because they will lose their health care insurance.  It would be interesting to see what percentage of entrepreneurs have a spouse with a job with health care insurance.  And if an entrepreneur needs employees…

Many jobs are going begging because there are not enough qualified people to fill them.  These jobs often require education well beyond high school.  But the rising costs of college education discourage many from even considering college.  Ironically, those who think tax cuts will create jobs don't consider that tax cuts reduce the future number of job creators.

A quality education from pre-school through university can produce creative people who will create a dynamic economy in the future.  Creative people are not created through standardized tests; they are created by active stimulation of their imaginations.  This means they have to have teachers who can personally interact frequently with each student; they have to access to books, labs, and workshops to gain and try a wide variety of ideas.  Those who have difficulties may need social workers who have the time and resources to understand and ameliorate those difficulties.  Laying off teachers and others is only eating our seed corn.

Until we have a majority of politicians who fully understand that lack of these two basic needs is standing in the way of job creation, we are going to have one half-baked solution after another offered up, sometimes from the so-called liberals and sometimes from the so-called conservatives.

Until we can break out of the habit of having to vote for one or the other "major" party, we are going to be stuck with polarized politics.  We need some leaders with the courage to take us in a new direction.  We aren't going to get those leaders until they feel they have a good chance of being elected under a new banner.