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Stimulus package misses the problem

By Henry Lamb
web posted February 16, 2009

Everyone in America wants the government to end the economic tailspin – quickly.  The problem, of course, is that there is little agreement on what the government should do.  Democrats, generally speaking, want to put a trillion dollars in purchases on a new credit card. The new purchases will provide the goods and services the government wants the people to have.   Republicans, generally speaking, want to reduce taxes sufficiently to leave a trillion dollars in the pockets of the people so they can purchase the goods and services they want.

The proposed solution is an awkward combination of the goals of the Democrats and the Republicans.  At best, it is little more than a band-aid on a cancer that has been growing in America for half a century.

It took Pearl Harbor to convince Americans of the threats to freedom that gathered in the 1930s.  When called upon, Americans focused like a laser beam on doing whatever it took to defeat the enemies of freedom.  Congress borrowed the money necessary to stoke the nation's manufacturing capacity to produce the goods needed to defeat the enemy.  Men went to war; and women went to work. 

The war was won, and the millions of people who lost their war-time jobs in the months after victory soon found new jobs in the factories primed and ready to churn out an array of new products for a nation ready and able to buy.  New homes, new cars, new clothes, new everything – most of which was produced in America.  America's productivity soon retired the war debt.

After the war, most Americans praised the creation of the Occupational Safety and Health Administration (OSHA), and didn't even notice the regulatory costs that were added to every consumer product.  Most Americans praised the creation of the Environmental Protection Agency, and didn't associate the rising prices of consumer goods with the regulatory compliance costs imposed on the producers of consumer goods. Consumers did not know the rising prices they had to pay were often the result of labor union contracts that forced producers to pay for non-productive time.  Consumers were not even aware of the multiple layers of suffocating taxes producers and manufacturers had to pass on to consumers.

The manufacturers noticed that taxes were lower and regulatory costs were lower in Mexico and China and India, and in some countries, there were no labor unions at all.  America did not notice that during the last half of the 20th century, its social justice and environmental agendas imposed costs on production that did not exist in other countries.  Consequently, two forces operated in concert: trade agreements allowed products made in other countries to arrive in America at prices lower than similar products made in America, and American manufacturers began to move their operations to other countries.

Now, at the dawn of the 21st century, American manufacturing capacity is almost completely gone.   America's ability to respond to the current economic crisis is greatly impaired by the labyrinth of regulatory compliance costs and procedures.  California's governor and other government officials are calling for the suspension of EPA regulations in order to get so-called "stimulus" projects underway quickly.  Government officials don't want to comply with the same rules they forced upon private industry.

Some in government refuse to recognize the social justice and environmental agendas and labor union demands as the underlying reason America has become less competitive than other nations.  Their solution is to require that recipients of money made available from the new credit card be forced to "Buy American," irrespective of the cost or the trade agreements the government approved.  Generally speaking, this view comes primarily from Democrats. They blame the dilemma on greedy capitalists whose pursuit of profit overwhelmed their patriotism when they moved their operations off-shore.   

There's no hope of solving the nation's economic problem if the problem is not recognized.  The new trillion-dollar charge card piles another load of debt on the debt-wagon already too heavy for the American economy to pull.

The economic problem is the production environment in American, which has become so overgrown with environmental and social justice fantasies, labor union abuses, corporate and governmental corruption, that the nation can no longer respond effectively to the gathering threats to freedom.

An obvious threat is the determined will of the Islamist extremists who are hell-bent on forcing the entire world to worship their god only, as they see fit.  And they are eager to kill anyone and everyone who refuses to surrender to their will.

Less obvious, is the threat from people who believe that government is the omnipotent power that can grant – or deny – rights to its citizens. 

In recent years, these people have outnumbered those who believe that citizens are omnipotent, and the government they chose to create is empowered only by their consent, and limited by the Constitution they wrote.

In recent years, both Democrats and Republicans have joined the omnipotent government crowd.  As this crowd grows, freedom diminishes – as does America. ESR

Henry Lamb is the executive vice president of the Environmental Conservation Organization (ECO), and chairman of Sovereignty International.


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