There are four things in the economy that the federal government has failed to stimulate.
Babyboomers are now in their 60s. They were ready to retire and return to their hippie, free spirit lives of the past, creating tens of millions of jobs for the generations replacing them, and millions more jobs for those who cater to their dreams of beaches, travel and multiple homes. They woke up this year to IRAs, pensions, and investments reduced by as much as half. They now have no faith in a Social Security system that now must be on the very bottom of the legislative to do list. Finally their last remaining perk, subsidized health care, will soon be shared by everyone. Where are the tax incentives for those who want to retire but lost huge sums in the markets?
Their solution: I’ll work a few more years. No new jobs, no spending, no investment and we can’t really blame them.
Our stimulus was quick to come to the aid of lenders who made less than brilliant loans to consumers they convinced to buy more home than they could afford. Now we guarantee or forgive their debt and make even more low cost capital available to them. Why then did we not ask these same lenders to show the same compassion to the same people they made the loans to in the first place? Where are the laws asking these institutions to allow people to stay in the homes, they said they could afford, at least until there is some hope on the horizon?
Their solution: Foreclosure, foreclosure, foreclosure. Screw them, they are the problem, not us. We’ll take their home sell it for pennies on the dollar, and mess up the housing market. Oh, and don’t come to us asking for a loan unless you already have money. The wounded – shoot them.
Our government has poured billions into automotive companies seeking to stay afloat and promising to "tighten their belts." These companies then immediately, same press release in fact, laid off tens of thousands of workers. Belt tightening is a 20-percent, across the board pay reduction. You know, every employee. Firing tens of thousands is taking off your belt and throwing it over a tree branch. Where is the federal carrot that says keep your workers employed and we’ll help build an economy that needs new cars again?
Their solution: small and lean means return to profit, and less mouths to feed means more food for the rest of us. The reality is unemployed workers fan the fire of economic chaos. New cars: Who needs them?
Our government has said banking officials receiving stimulus monies must cap their salaries at $500,000. Yet our government turned a blind eye to the same banks charging the $37,000 a year health care worker 28-percent interest on her credit card debt and $39 late fees because she gets paid on the first and they want their money on the 27th, and that date is a moving target. Where was the provision in the laws restricting penalties and interest charged to the consumer?
Their solution, we need the 28-percent because so many people default on their debt. Well duh, you were unable to make payment on loans with interest rates in the sub 3-percent range. Not to get scriptural here but "do unto others." Consumer stimulus – not our problem.
I am not against revitalizing our economy, but to do it, we need to put politics aside and look at the problem from the bottom up. Consumers and employment come first. Companies and institutions second. We need to stop worrying about Rick’s corporate jet and start worrying about Tom’s 1997 Malibu.
Ken Harwood is the editor of Wisconsin Development News and founder of The FutureWisconsin Project. He is also the former mayor of Neenah and is currently an alderman in Verona. He is a member of the The Madison Area Transportation Planning Board.