It is time for a change. A real, radical change in the way we approach this recovery. The August job report has come in and as of now it stands at zero job growth. This is the moment before double dip recession. With our economy continuing to contract something must be done, and it must be decisive. Part of the problem has been regardless of where you stand on the ideological spectrum not enough has been done. As of now the proverbial tug of war has resulted in a stalemate, but one side will win and the other will lose and the time for that to happen is now, not 17 months from now when a new presidential and congressional term begins. The truth is regardless of which ideology does win, there will be pain for all.
If Conservatives Win
According to the Conservative argument, the problem right now is the governmental burden on private business. They are demanding a dramatic draw down of governmental services. This will likely result in a continued contraction of our economy for the near future. Without some governmental intervention, the housing market will continue to drag, as the ongoing foreclosure fiasco continues to reset home values to pre-bubble levels. There will be more job losses as companies continue to search for ways to decrease their labor burdens, through out sourcing, as well pay cuts. Companies will increasingly look at burgeoning global markets for the expansion of their business. If there is to be any changes made in the way we handle intellectual property( Copyright, Patent, Trademark) it will be to strengthen and extend the rights period for corporations. Those with capital will use it to acquire many of the newly available assets being shed by those without the capital to maintain them. I don’t think it is unfair to say that the Conservative mindset is to ensure that those who have already made it keep what they have. In that regard their strategies will result in a continued consolidation of ownership to those who are not on the precipice of tragedy.
If Liberals/Progressives Win
The Liberal/Progressive argument is that government should step in and fill the gap left by the great recession. This will necessarily lead to a dramatic increase in our governmental debt. This debt will eventually need to be paid back. The payback will come in multiple ways most notably an eventual increase in taxes. To address the housing issue, many investors will have to take a significant cut in their expected returns, this includes all workers in 401k and pension systems. Unless this is offset by additional governmental funding(an unlikely prospect) many soon to be retirees will have to work longer or live off of significantly less. In order to stem outsourcing the value of the dollar will have to be diminished, or protectionist trade policies will need to be implemented. Either will result in an increase in prices across the board. The Liberal/Progressive mindset is to build up those who are at or near the bottom by taking from those who have more.
Obviously from reading the articles I write here it is clear which side I fall on. I personally believe the long term health of the country depends a broad base of ownership. This means moving us as country away from low wage employment. It also means increasing the diversification of wealth in the middle class. As it stands most of the wealth of the middle class is tied to home ownership. Part of the benefit of the old pension system was the implicit connection between the success of the company and the worker. Obviously a significant burden was placed on owners in this arrangement. Perhaps implementing a system somewhat similar to stock options for all employees that is tied proportionally to salary would lead to increases in wealth (not just wages). Tying ownership to labor could help both wage disputes, and hopefully slow the race to the bottom of wages in this country.