Questioning Restoration

 

Washington’s gurus can hardly open their mouths these days without proposing some new funding measure to relieve the current financial/economic crisis.  The question could be raised, however, as to the legitimacy of the premise upon which their recommendations are based.  To my way of thinking, they all subscribe to the “hair of the dog that bit me” school-that is to say, they’re taking another drag from the bottle of economic spirits that got us into this mess to begin with.  Underlying their proposals is the assumption that, if we devote enough resources to remedial efforts, the country’s economy can be restored to its 2006’s level of prosperity.

 It would be more prudent, I believe, to step back and ask, one, is it really possible to bring back the ‘good old days?’ and, two, would it be even desirable to do so?  A more sober look at things suggests that the answer to both questions is a resounding “no.”  We simply do not have the means to prop things up as they were no matter how many trillion’s of ‘funny money’ are spent on financial duct tape.  Humpty Dumpy simply can’t be put back together again.  Moreover it’s a bad idea to begin with.  The economy that Washington seems so intent on reviving had been anything but “normal.”  It was debt heavy, dangerously leveraged, overly indulgent, environmentally destructive, outrageously unfair, and, as events proved, unexpectedly fragile.  In short, it was unsustainable then and, if by some miracle it could be resurrected, it would prove unsustainable again.

Once these facts are squarely faced, the proper strategy for government takes on a radically new look.  Instead of trying to prevent the economy from doing what it wants to do (and will do, anyway, come what may) government should set as its goal a genuinely sustainable-albeit shrunken-economy and focus on keeping the descent to that level as orderly as possible.  Were this policy enacted, a drastic reduction in the bloated financial area would be accepted as both a desirable and inevitable part of the transition.  This would pertain as well to an auto industry with greater manufacturing capacity than is warranted and a retail sector grown out of all proportion to the country’s real needs.  Likewise an initial flood of home foreclosures would be regarded as an unfortunate, but all too necessary, adjustment to a fraudulent housing market.  The good citizens of this country would be encouraged to spend less, save more, and reduce their indebtedness.  And, last but not least, our self-assumed and hugely unpopular role of world policeman would be abdicated altogether, our uniform hung in the closet, and our billy club donated to a museum.

Just as government inaction is called for in order to allow a free economy to resume its natural course, aggressive government action is called for to cushion the transition’s impact upon the millions of Americans who are being victimized by the crisis.  Existing social services alone will not be able to cope with the unemployment, malnutrition, homelessness, unmet health care and educational needs that can be expected as letdown unfolds.

The traditional way of meeting the developing emergency would be to augment the existing relief agencies devoted to alleviating problems faced by the needy.  Whereas these organizations undoubtedly have their place, they should not be depended upon as the primary conduit for aid.  These agencies are woefully inefficient; every dollar spent by Washington gets badly whittled down by layers of bureaucracy before reaching the hands of those for whom it was intended.  Worse is the burden this fragmented system exacts on the self respect of recipients who are forced to spend time groveling before a succession of counters behind which sit hardened clerks totally reliant on the empathy of computers for their dispensation of handouts.

The people most knowledgeable regarding the priority to be given their individual needs are, not surprisingly, the beneficiaries themselves.  Therefore, putting money directly into their hands as wages in exchange for honest labor makes more sense for the majority of families on relief than any of the existing paternalistic schemes hatched in Washington.  And here we ought to take a page out of the Great Depression’s New Deal.  According to Wikipedia, “Between 1935 and 1943 the WPA [Works Project Administration] provided almost 8 million jobs.”  Granted the program had its weaknesses, but, by and large, it had the scale and scope to do the job.  An improved version today could provide the needed humanitarian assistance while accomplishing a number of worthwhile undertakings.  This country has enough slums to clean up; infrastructure and roads to improve; national parks to be rejuvenated; playgrounds, recreational centers, and bikeways to be built;  trees to be planted, trash to be collected and dozens of other such projects to keep two WPA’s busy for years to come.

No reasonably ambitious worker would want to stay in a poorly paid government job any longer that he or she had to, so as our free market economy opens new employment opportunities, the WPA-like program would gradually wind down.  But in the meantime it seems to me that it would offer a far more efficient way of buffering unemployment than the ad hoc measures now being instituted.   

There will be those who contend we can both save the economy and protect the people it has disowned.  I doubt it.  My gut feeling is that if we try both simultaneously, neither approach will fully succeed.  Thus, in my humble opinion, the man on the white charger ought to stop galloping off to rescue banks in distress and, instead, swing his steed around and start rescuing people in distress.