I have been hovering at an arms length distance over the “debt ceiling” debate and unfolding government-inaction-by-paralysis, observing there is too much ideological positioning and not enough practical thinking and doing.
With the national debt ceiling deadline looming (and all the hand wringing catastrophic prognostications a default would bring,) coupled with high unemployment, waning consumer demand, midway through 2011 feels like capitalism death-spiral for sure.
Our founding fathers gave us the mandate and opportunity for “life, liberty, and the pursuit of happiness…” in the form of a democratic capitalistic society. This means citizens must consume goods and services and businesses must bloom to create the goods and services for consumers. Businesses employee the citizens, and those citizens are supposed to consume the goods and services. This dosey-do dance is how our country is supposed to work, and sometimes (like right now) the delicate balance between the interests important to business and the needs important to consumers gets out of kilter.
The United States of America is the greatest “startup” ever created on Earth. All the right initial ingredients were put in place to let citizens pursue happiness, and thus go forth and consume. But over the past decade consumer demand to purchase sufficient goods and services to propel economic growth has stalled. The stall is for various reasons, but we are purchasing less stuff today than we did 2001.
For example in the automobile industry, advances in design, lubrication, and quality allow our cars to last twice as long as cars just fifteen years ago. We’re buying 25% fewer cars now than before.
Unless we make some fundamental changes in the fabric of our society, the stall will become a vicious cycle as consumers stop buying, business lower output and reduce employees, and then there are fewer people with the means to purchase the already reduced business output.
As a society we need to start to plan for the fact that rapidly advancing technologies gives us tremendous benefits, but at the same time are displacing people form jobs. We need to plan for a day not too far off where we need less workers to create the goods and services for our consumption based society.
And plan for even more long term when our consumption based economy needs far fewer “employees” to produce all the goods that will be consumed. The conventional contemporary concepts of career, identity, self-worth, and societal contribution will be challenged. Our technology will continue to advance, eliminating the need for a human-powered work force. What will all our citizens of the future do when there is just no need for “workers” to build products or fill many of today’s professions? Nine percent unemployment today will seem like a small number in 2020. By 2020 we’ll need a whole new mind set and attitude toward work, professions, and value to society.
I hope to see some progress on these areas, which I think are necessary in the eventual re-shaping of our economy:
- Change the way we get our health insurance. Instead of health insurance as a function of employment, make insurance a service individuals procure directly from insurance companies and transfer the employee beenfits administrative overhead from each individual business to the insurance companies. Let government provide the guidelines to private insurers on service quality (just like the public utilities are regulated) to protect the citizenry for unscrupulous insurance companies. An additional benefit is hard to quantify, but if people are more closely aware of their true health care costs they might make better personal choices in the area of diet, exercise and better living habits. This means fewer chronic illnesses and ultimately more happy people to buy more goods.
- Double-down on public and private investment in education and worker re-training. Government and businesses working together to retool the American work force factory.
- Double-down on public and private partnerships to fund “doing big things.” With NASA seeming to wane, and companies like Space X launching ships into space in ways that only government could afford do in the past, there is a pressing need to continue innovation to create the industries of the future. Big corporate investment in pure research and development is at an all time low. We need a modern version of “Bell Labs” to invent the “transistor” of the next decade. And we need 100 of these in all disciplines.
That’s it: A few seemingly simple ideas for your consideration.