I believe two things would tremendously help the economy back onto it's feet: 1) Stop laying people off and hire people. Most companies laying people off are still posting profits each quarter, USE THEM. 2) Bring jobs back from overseas. Bring back help desk and manufacturing jobs to Americans, bring money back into America. Then, and only then, will there be money to spend in America.
Yes, It’s A Wreck, But We Can Fix It
NEWSWEEK's Business Roundtable looks at why the government's efforts to right the economy haven't yet worked—and what might do the trick.
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The Rearview Mirror
Craig Barrett, chairman of the board of Intel
First all the headlines, political debates and government actions were centered on the Wall Street "financial rescue package" (it seems that it is not "politically correct" to refer to a "bailout"). Then Detroit came looking for $25 billion in government-guaranteed loans to retool for more energy-efficient cars. This raises the question of where the Department of Energy has been spending its annual $25 billion budget to fulfill its charter of weaning us from foreign oil—maybe we could just give the department to Detroit and save $25 billion? Next consider the $290 billion Farm Bill and you have to ask if everyone in Washington is looking in the rearview mirror.
Where are our investments for the 21st century? Why can't we get a permanent research-and-development tax credit or fund the America Competes Act, which increases the basic research funding of the National Science Foundation and top universities? I'm afraid the bailout is typical of the current attitude of Washington—prop up old industries and forget about tomorrow. Sure we get great promises in campaigns, but in practice we starve the new ideas. Joseph Schumpeter and Adam Smith, our great free-market theorists, must be rolling over in their graves. Instead of allowing creative destruction we are propping up failures. We need to invest in smart new ideas. I think it goes without saying that the $700 billion bailout is doing exactly the opposite.
Down the Rabbit Hole
Robert Reich, former secretary of Labor under President Clinton, now professor of public policy at University of California, Berkeley
Nine straight months of shrinking employment spells recession. And it's likely to get far worse before it gets better. The problems aren't only found in hobbled credit markets. They're also found in hobbled consumers.
The $700 billion bailout hasn't worked because the Treasury and the Fed have still not fully and convincingly explained how it will be used to restore confidence. Instead, they've issued a hapless and feckless set of policies—letting Lehman go, propping up AIG, creating shotgun marriages between other banks, and now talking about government taking equity stakes in other financial institutions. It looks to all the world as if American policymakers have no idea what they're doing.
At bottom, this isn't a liquidity crisis. It's a crisis of trust. No one's in charge. A lame-duck president commands almost no public trust; a Treasury secretary, who comes from the same culture that got us into this mess, can't explain what happened and what he's doing about it. Lenders of all stripes don't trust borrowers will be able to repay. Every major player is moving to safer ground—holding money, hoarding it, putting it under a giant global mattress.
Now that America is tipping into deeper recession and unemployment is mounting, more bad loans are cropping up because more people can't pay their bills. And as consumers pull in their belts, more businesses can't pay their bills. Which means more layoffs, and more bad loans, and a global sell-off.
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