Today the Senate should vote on the economic stimulus package. The bill isn’t close to everything that we need, but it is something. I wrote the following for a local journal.
As I was growing up, in Texas, I began taking tennis lessons that a local tennis court. I remember the tennis pro saying over and over again, “keep your eye on the ball.” He was right. I tended to look away from the ball before I made contact. As we continue to debate this economic stimulus package, I would humbly suggest that we keep our eyes on the ball.
The purpose of this stimulus package is to put people to work. In November and December our economy shed over a million jobs. Just in the last two weeks we’ve heard of job cuts from Wall Street darlings — Starbucks and Microsoft. Auto sales for Ford dropped 40% in the month of January. Remember, Ford is the American manufacturer that is “doing well.” Almost every sector in our economy is faltering.
Over the last 30 years we’ve been told that the government is not the solution. I think we have to throw out this type of ideology if were going to come up with a solution that is going to help everyone. Frank Rich, New York Times columnist, recently noted “in March 1933, Hoover and Roosevelt acolytes had forgotten to be Republicans or Democrats as they urgently tried to rescue their country.” Well, we don’t have to worry about Republicans and Democrats holding hands and singing. Republicans have continually tried to stuff every kind of tax cut and tax break into this bill. We’ve tried tax cuts. President Bush in 2003 past tax cuts and promised millions of jobs. Using the White House’s own estimates they fell 3.1 million jobs short. Tax cuts do not work to create jobs. Jobs is the name of the game. We have to keep our eye on the creation of jobs.
Most economists agree that we can approach this economic problem in one of two ways. One road will lead us out of this economic disaster and the other road will lead us closer and closer to our second Great Depression. Herbert Hoover and his advisers cut government spending and tried to balance the budget. They tightened monetary policy and believed in survival of the fittest. This worsened an already terrible job market. People without jobs stopped spending and removed any money they may have had from financial institutions. This caused more banks to collapse and caused people without jobs to tighten their belts even further thus perpetuating the cycle.
The other approach is the one that President Barack Obama is trying to take now. He wants the government to spend money. He wants to invest in projects that put people to work. If people are working and making money, they will begin to spend money. Spending money will in turn help small businesses in the local community. The small businesses will begin to spend money and sign contracts with larger businesses. Both the small and large businesses will begin to hire more people. Now this is a perpetuating a cycle that we want to perpetuate. We must invest in infrastructure. By fixing crumbling roads, bridges, water treatment plants, updating the sewer systems and modernizing the electrical grid we will create millions of jobs. This is a start at repairing our broken economy. There are other things that we need to fix. The banking system needs to be fixed. The brokerage house system needs to be re-created and fixed. (There are no major brokerage houses left.) Hedge funds need to be regulated. But, the most important piece of this whole puzzle, the piece we must keep our eye on, is putting Americans to work at a fair wage. If we can’t do that, then we’re headed towards a Great Depression and everyone better hang on because this ride is going to get very bumpy.
Psst. Do not tell anybody but with more and more people out of work it becomes more imperative that we fix health care. I just thought that I would add this because almost no one is talking about health care.