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 ([email protected]) is a senior majoring in economics.
