Opinion
College, trees, manufacturing key to recovery
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Also by Gerald Cox:
- AIG sparks Congress' ignorance (March 22, 2009)
- Same old strategies won't save republicanism (March 2, 2009)
- Black leaders won't let America's racist heritage go (February 23, 2009)
- ASM constitution will not succeed without students (February 19, 2009)
- Early missteps mar new administration (February 16, 2009)
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This stinks. It’s like being invited to an interview at a swanky and expensive restaurant by a prospective employer, who, while eating, gets sick and vomits up her meal all over you, then hurriedly rushes out, leaving you to foot the bill.
Let’s be clear. We are paying for the greed of our parents. Not, specifically, your parents or mine, but the collective mindset of economic and financial tomfoolery shared by the immediate generations that preceded us — an irresponsible lot all around. They’ve cost us trillions, and we’ve only just begun.
The overarching lesson of the story should be that America’s economy is not sustainable when it is sustained on a foundation of greed. Do you know what caused this massive economic downturn? This self-destructive greed is best summed up in the much-circulated story of a Bakersfield, Calif., strawberry picker who was lent every penny he needed to purchase a $720,000 home. He earned less than $20,000 a year.
The abovementioned strawberry picker had no chance of paying back that loan, yet his loan could be packaged along with other equally boneheaded loans and then bought, sold and traded like an actual product with an actual value by actual banks and other entities. That’s why there were lenders willing to give people like our strawberry picker a loan they could not afford in the first place. Lenders could simply package these loans, sell them at a profit and avoid dealing with a borrower who would inevitably default.
Firms like CitiGroup and Lehman Brothers eventually had so much of their worth tied up in purchases of such loans that they were unable to stay solvent. And now the American taxpayer is being used like a credit card with an unspecified and enormous balance to bail out decision makers who bet their company and our economy’s future on things with absolutely no worth.
So we find ourselves in a situation where we are heavily leveraged in a financial institution that has just committed one of the single most epic failures in our nation’s history. I think we’ve earned the right to make some demands.
So let’s talk the future. And who better than an economics major to lay out our demands!
Free college. Yep, I said it. Free. The current state of the cost of higher education constitutes a failure. The current system that saddles newly-graduated students with a mountain of debt is unethical and immoral. Especially considering the dwindling opportunities to procure a job to help pay off that debt.
Note that I did not say every college had to be free. However, I believe that the United States federal government has the means, and now, the responsibility to provide an infrastructure of universities and colleges that are, in effect, free to those who are qualified to attend.
Second, how about that Green New Deal we keep hearing so much about? In the economic abundance that was the ’90s, the communications industry provided a sustainable and robust industry that required laying wires, building software, and maintaining networks. We need a robust plan that puts in place a new energy infrastructure that is sustainable, diverse, and, ultimately, American-made.
Speaking of American-made, how about that American manufacturing industry? Our third demand is a reinvestment in U.S. manufacturing infrastructure. The first step the Wisconsin congressional delegation could make, for instance, is to get behind a responsible and sustainable loan program to American automakers. According the Green Bay Gazette, if all three automakers go under, Wisconsin will lose another 85,000 jobs. If Gov. Jim Doyle, Sens. Russ Feingold and Herb Kohl and Wisconsin’s U.S. Representatives from the ineffective Tammy Baldwin to the conservative Paul Ryan can’t find a way to support a responsible bailout of these companies, voters would do well to remember their inaction the next time they’re up for re-election.
If you’re looking for a starting point, read my column on the auto industry from a few weeks ago.
The emphasis for Wisconsin and the rest of the nation must be on creating a manufacturing infrastructure that is modern, robust and prolific. We can start with our auto industry.
I was going to include a fourth demand for free Apple products, but I have a word limit that I consistently abuse.
Such a framework would provide, as then-Senator Biden once said, “J-O-B-S” and a workforce prepared to work them. The American economy must reassert itself as economy whose profits are based on producing and selling products. Not bogus securities and derivatives.
It may be asking a bit much, but can someone get on this? We demand a voice in our economy’s handling commensurate with the size of our investment. A wise man once said we shouldn’t ask what our country can do for us. To that I say, “You first, country.”
Gerald Cox (gcox@badgerherald.com) is a senior majoring in economics.
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We need to get rid of the Federal Reserve System. They’ve done more harm than good. We should also get rid of the federal income tax. All it did was give the federal government a blank check to spend a portion of our hard-earned money any way it saw fit. Now look where we are.
The federal government did just fine without a Federal Reserve and an income tax before 1913, the year both were created. All the economic downturns before that year were short, isolated and pretty light compared to the Great Depression, an economic crisis that was felt around the world. We could also bring our troops home from Iraq and Afghanistan, shut down all the military bases we have in over 100 foreign countries. We could impose a ten-year moratorium on immigration to the US.
Let the rest of the world fix their own problems instead of fleeing to the West. We have our own problems here to contend with.
This economics graduate student laughs at your suggestions. My comments:
Students need to have an incentive to graduate college in less than six years and not just to party. Keeping costs reasonable (or free for students who complete 24-30 credits per year with a 2.5 or 3.0 GPA) is good; making college free for lazy students is crazy.
We need nuclear power soon. That will provide clean energy for all Americans. France does it, so why not us?
Throw money at ineffective Detroit auto companies…yikes. Did we bail out steam engine companies? No, ‘bad’ companies failed and ‘good’ companies thrived. It’s interesting seeing the Democrats run to the rescue of the inefficient Big Three while ignoring the efficient automakers. After all, how many Big Three cars did you see in Madison with Obama stickers? My unscientific count was less than five percent.
Good call on word limits; I’ll stop now.
Grow up and research your positions and then come back later, Gerald.
With an historically low top tax-bracket rate, I thought the rich were going to free-market the trickle down? Trickle down NOW, bitches!
Trees?
Seriously? This is what you came up with? We have the resources for free college when we already are in a mountain of debt? How are you an economics major? And remind me again where it says in the constitution that we have to have an economy based on what you consider “moral”.
Great column as usual gerald. Keep up the good work
as then-Senator Biden once said, “J-O-B-S”
The fact that he can’t count and said that “J-O-B-S” has 3 letters may be a clue as to how we got in this situation. He was there when Congress passed laws forcing the financial institutions to loan money to people who couldn’t pay it back. The Dems who shot down regulation of FREDDIE MAC and SALLIE MAE are now picking the taxpayer pockets to help there big contributors.
We can start with our auto industry.
NEVER happen, it would require unions to give back the blackmail that the CEOs were stupid enough to pay.
Free education may seem like a radical idea, but it is not so far fetched. Consider many graduate school programs like the ones here at UW, the students have their tuition paid for and receive a stipend in excess of $15-20,000 paid for yours truly, and many others that attend this fair university. It might not be plausible quite yet, but I am excited to see what changes will occur after January 20th.
Surely you’re kidding. What does economics, producing and selling products have to do with getting unearned handouts from the government?
It was unearned promises and manipulations of the money supply favoring financial lending and home ownership that got us into this mess. How can more favoritism be the solution?
The solution is allow producing and selling (i.e., economics) to function without government taking and redistributing.
Katherine Mangu-Ward explains why bad governance—not deregulation—caused the current financial meltdown.
http://www.reason.com/news/show/130348.html
Jim Allard, maybe you should take account of the unearned handouts you’re receiving. I’m sure your K-12 schooling was at least partially free for your non-contributory childhood.
“The emphasis for Wisconsin and the rest of the nation must be on creating a manufacturing infrastructure that is modern, robust and prolific. We can start with our auto industry.”
I presume you mean all using robots since everybody goes to college?
Jerry,
Are you representative of what UW-Madison is graduating as economics majors these days?
Pathetic…… lame and pathetic.
You have proved one old adage however. If you let a monkey bang away at a keyboard long enough, occasionally you’ll find a few words and phrases that seem like communication.
Good ol’ Herald editors. Always letting anonymous readers call their black columnists monkeys.