There are obvious things that no one running for President seems to be talking about these days. Here are six issues I think we should talk about.
(1) Talk about how we are going to improve our infrastructure
From assertions that fossil fuels that would immediately be outlawed on election day, on one hand, to, on the other hand, the fact that fossil fuels are so far the only industries that our President supports wholeheartedly, we’re not talking about infrastructure. Why? A functional infrastructure is the foundation of good economics. We have no idea what needs fixing and how much it will cost. How can we be realistic in our expectations about updating our infrastructure. A recent documentary on TV lately showed that China is far ahead of us in building its infrastructure, and solving technical problems. We can’t afford to lose out in this race!
(2) Extending the time limit on unemployment insurance
So far, the only person I’ve seen argue for this idea is an economist who predicted the last financial crisis.Raghhuram G. Rajan (“Raj”) pointed out in his 2010 book, Fault Lines that European countries now allow their unemployment support to go on for two to three years. Given the need to retrain workers for jobs robots can’t do, I think unemployment and job training should be on the near horizon – especially since the Fed is feeding a low-interest-rate frenzy on Wall Street that may lead to stagflation and unemployment as soon as next year.
(3) Considering rotating teachers among schools rather than busing students or giving students vouchers to go to schools far away from home
Botswana in Africa (home of the Ladies #1 Detective Agency) rotates 20% of its teachers each year. Why? Because Botswana has a multitude of tribal groups. Rotating teachers has helped bring understanding among different tribes, and Botswana is an exceptionally peaceful country, having had no race wars. If any other country needs help with encouraging its racial/ethnic groups to understand and trust each other, it is the United States! We have the most diverse population in the world.
(4) In keeping with the above idea, how about restructuring the housing situation in this country?
Not just in terms of how to promote environmental justice for less-well-off people, or for controlling climate change, but also to encourage integration of neighborhoods. This would decrease gerrymandering and increase connections among the hundreds of racial/ethnic groups in the United States. The funding of housing is intimately connected with both Wall Street and our federal government. Government has looked the other way at redlining of whole neighborhoods, and banks have gotten burned profiting off sub-prime loans. How could we encourage government and banks to get involved in bringing Americans of all backgrounds together rather than segregating so many of our urban and suburban neighborhoods.
(5) Changing the way race is defined in this country.
The Census Bureau lists only a few categories of race. This country has over 500 Native American tribes along with successive inflows of immigrants from everywhere around the globe over many centuries. We are the most diverse country in the world. Our Census categories are completely inadequate for drawing any rational conclusions about how to serve all Americans. At best, using other sources, our government can only come up with percentages for 20 categories of Americans by race or ethnicity. This is a cornucopia of data with big holes in it.This kind of data promotes exclusion more than inclusion.
(6) Abandoning the view that corporations exist principally to serve shareholders
According to the Financial Times economist, Martin Wolf, The U.S. Business Roundtable, represented by 181 CEOs of the world’s largest companies has just issued a statement that their companies will “share a fundamental commitment to all of our stakeholders.” This is not a new idea. I worked for a non-profit in the 1990’s that was promoting the idea of serving long-term stakeholders in corporations, such as employees, clients, and communities. In fact, a Wall Street power broker named Marty Lipton put forth a call to abandon short-term profits for long-term commitments to stakeholders in his 1979 paper, “Takeover Bids in the The Target’s Boardroom” (Source: Financial Times Gillian Tett, “Does capitalism need saving from itself”). Isn’t it about time to discuss this idea!
If you have ideas that you think should be discussed by our Presidential candidates but aren’t, please comment (briefly as you can) and I’ll post comments (with or without your name if you prefer). Let’s hear your ideas about changing things for the better!
Fault Lines: How Hidden Fractures Still Threaten the World Economy by Raghuram G. Rajan (Princeton University Press, 2010)
Authors’ Note: Recently several people have told me this series is depressing. That certainly wasn’t my intention. We are in a time of rising hopes in this country. That is great. But rising hopes don’t always come to fruition.
Raj’s chapters point out specific dangers that may impede our progress in this century.
We prepare for natural disasters, especially out here in California. So why not for man-made disasters? It’s just common sense.
Chapter Six “When Money is the Measure of All Worth”
Those of us who worry about derivatives will find this chapter useful.
We live in turbulent times, and the upcoming U.S. Presidential election is overshadowing financial changes that are going on here and abroad.
We’re in a time of high financial volatility that keeps dropping and then creeping upward. Our economy is good—for now. But we know that danger could lurk ahead in our future. Past history teaches us that.
Raj notes that Securitization goes back centuries – in the 1800s to the French monarchy sold annuities to wealthy men. Swiss bankers purchased these French government annuities and took out life insurance on “suitable girls” in Geneva.
Those annuities were then bundled and and resold at a higher price to investors. What happenened next ? The bubble burst. Sound familiar? Continue reading →