Monday, September 12, 2011

8 Steps For Revitalizing The U.S. Economy

Industry Week  has a piece in their online edition by Dr. Ken Mayland, an economist who covers manufacturing and business trends. 
Here are Dr. Mayland's "Eight Steps For Revitalizing The U.S. Economy".  I've been ranting about seven of these for years, and I don't even have a Doctorate in Economics.  Or a Masters.  Or a Bachelors.  I do, however, work in the shipping and logistics industry, and that qualifies me to comment on these things. 

1.  Kill the 2010 health care reform bill.

Well, duh, of course.  Nobody knows who exactly wrote it.  Nobody knows what it is supposed to accomplish.  It's too long for anyone to know what is in it.  A lot of people who lobbied for it have now been exempted from it.  But everyone fears it. 

2.  Do a "reverse course" on developing domestic energy and ease access and permitting for all forms of energy production.

Yeah.  Drill, Baby, Drill.  The Green Energy Scam is slowly being exposed.  Within a year and a half, it'll be dead as a doornail.  Drill, Baby, Drill.  Now.   

3.  Eliminate the minimum wage. Mayland said: "Economists have long know that politicians cannot legislate the productivity of a worker. If you raise the minimum wage above the basic productivity of the worker, the worker will be fired or not hired." Mayland said since the minimum wage was last raised, the biggest increase in unemployment has been among teenagers -- "exactly where you would expect a minimum-wage increase to hurt."

The minimum wage is zero.  The higher you set an artificial price floor for unskilled workers, the more of them you condemn to earning the true minimum wage - zero. 

4.  Repeal the Frank-Dodd financial reform law and Sarbanes-Oxley, which he said put U.S. businesses at a disadvantage compared to businesses in other countries.

I know absolutely nothing about this.  Some might say that this shortcoming has never prevented any of my other rants, but there you have it.  I know nothing about SarbOx.  But this guy does. 

5.  Rein in EPA and the National Labor Relations Board.

Or we could continue to allow the NLRB to tell businesses where they can and can't operate.  Pick one. 

6.  Pass free-trade agreements with Panama, Columbia and South Korea.

This is great as long as it is Free Trade and not Managed Trade.  Any Free Trade Agreement that's 900 pages long is automatically suspect. 

7.  Pare back overly generous unemployment benefits from the current 99 weeks. Mayland cited a scholarly study that if unemployment benefits were 26 weeks, the unemployment rate would be 2% to 2.5% lower.

Yep, and it wouldn't be pretty.  But combine #3 and #7, and you would rapidly approach full employment.  Companies would accomplish more with less.  But it wouldn't be fair !  So we're going to continue to borrow from our fetuses ! 

8.  Trash the tax code and install a flat tax. Mayland said once the appropriate tax rate was determined, taxpayers could fill out their tax return "on a postcard."

Go here for a picture of the Hong Kong tax postcard. 

There you have it.  If Obama and Congress knew that they were going to be propped against a wall and shot if the economy didn't improve within one year, they would implement all of Ken Mayland's Libertarian-ish suggestions tomorrow morning.  Hit the labels below if you want to read earlier rants on any of these topics.

1 comment:

Nick said...

I agree with most of these steps.

SOX has turned out to be mostly ineffective and a waste of time and money. There's nothing wrong with making CEOs accountable for the accuracy of their financial statements. There's nothing inherently wrong with requiring an independent audit of financial statements. The SOX statements become routine. It's like the California Prop 65 warning labels: when you label everything with a warning, you label NOTHING with a warning.

Dodd-Frank has some good elements in it and some bad elements in it. It's probably more bad than good. Generally, it's just as unwise to completely repeal a law without considering it carefully as it is to pass it in the first place under the same ignorance.

Getting rid of the OTS was probably a good thing. Requiring banks to have a living will is probably a good thing. Regulating non-bank financial corporations is probably a good thing.

The Act created several new bureaus, divisions, committees, etc. It expanded some federal powers. It created some wasteful, useless requirements for research. Much of it is hot air. Some of it will have unintended consequences.

But here is a synopsis of Dodd-Frank written by people who love it. I'm sure you can find many things in it to hate. I did.

Here is a summary by the Mortgage Bankers Association.