Searching for a way to stimulate the economy

Investing in jobs for America

A friend asked me to comment on Fareed Zakaria's ideas on how to invest in jobs for America. My response follows:

Zakaria is a progressive, so I expected him to advocate higher taxes and to euphemize them as “investments.” He seems oblivious to the Laffer curve, which explains the paradox of why higher tax rates can lead to less revenue collected by the government. He conveniently ignores the fact that the government had plenty of money to invest in R&D as he suggested, but it frittered it away on myriad things the average American would call bullshit: studying what college co-eds do in the dark after drinking beer (see the Congressional Cretin Journal), erecting a Vulcan monument and rice museum, and replenishing beach sand that just washes away—like our futures.

More wasted tax dollars

Funding The Buffalo Bill Historical Center, the Montana Sheep Institute, the Reindeer Herder's Association, Hawaiian canoe trips, the Polynesian Voyaging Society, water slides, skateboard parks, golf courses, aquatic centers, a polar bear exhibit, a mob museum, a Minor League Baseball museum, a casino in Philadelphia, and several thousand other indefensible ways to waste our money.

Then there's trillions more for Fannie Mae, Freddie Mac, TARP and the bailouts, in which Main Street Americans were robbed to enrich the special interest groups favored by Obama and Bush. That's crony capitalism, in which money is spread around not to everyone equally, but to people and groups who are politically well-connected. (See an example of Obama's crony capitalism.)

Zakaria apparently doesn't realize that taking more money from American people and businesses would reduce their ability to invest. He assumes the government makes wiser investment decisions than the free market, but this is laughably false: history has repeatedly shown that the government is much better at blowing money than wisely investing it. That said, capitalism isn't perfect because capitalists aren't perfect. As President Herbert Hoover said, “The only problem with capitalism is the capitalists.”

I've spoken with CEOs and know how they can make egregious decisions fueled by their human foibles and limited intelligence (for a good example, read pages 145 – 149 in the 21st edition of my book From Bailout to Bliss that's free for personal use), but I would almost always prefer to have investment decisions made by imperfect capitalists than highly imperfect politicians who are more interested in rewarding those who funded their campaigns.

One of my well-connected Facebook friends (she gets one-on-one time with Donald Trump) suggested a meeting-of-great-minds summit to brainstorm ideas on how to kick-start our economy. That's a wonderful idea, but she proposed limiting it to CEOs—tacitly suggesting they have all the great ideas. Hardly. Most truly brilliant ideas that revolutionized our world came from outside-the-box unknown people with grease under their fingernails, not men dressed in suits. Here's my response to her:

I've already spoken to some CEOs and was not impressed by their intelligence. If you want great minds and great ideas, I think you will need to broaden your search. While I strongly favor inside-the-box solutions such as reducing taxes and regulation, I don't think they can sufficiently resuscitate our economy. We need true innovation that will create entirely new industries to give consumers products and services that most people can't even dream of.

People are skeptical of new ideas until they see them work and appreciate how that technological advancement can benefit them, so I am now building a device that virtually everyone will crave more than iPods and computers. The industry created to fulfill the consumer demand for that family of new products and services will (by design) create another industry, like a chain reaction, and then another.

I grew weary of waiting for our business and political leaders to generate bright ideas, so I put my money where my mouth is, quit working as a doctor, and began creating some things people would give their right arm for. In my opinion, most CEOs are stuck in the 20th century and cannot conceive of truly novel ideas, nor can the engineers they typically rely on for innovation. Most “new” products are nothing but minor tweaks of existing ideas and don't excite consumers or investors. We need entirely new products and services that will amaze consumers, filling them with an “I've got to have that!” urge.

As much as I enjoy criticizing our politicians, they are not solely responsible for the economic fall of the United States. My exposure to CEOs has shown me how hidebound they can be. Stagnation of innovation is a surefire recipe for economic malaise. We need ideas that will change lives, giving people capabilities that now seem like a pipe dream. How many CEOs possess such ideas? None that I know. But I do, and I know that I am not alone. The economic downturn has spurred many people to begin thinking outside the box. I therefore suggest that your “meeting of great minds” invitations be given not on the basis of one's job position, but rather on whether one has a great idea.

My comment prompted a response from a man who claimed to be the CEO of an innovative company. His two-sentence reply was replete with so many spelling and grammar errors I seriously wondered as a doctor if he had brain damage. I ignored his inept writing and instead wrote:

You seem to be suggesting that American corporations are indeed innovative. Historically, yes. Recently, no. When was the last truly great American idea? The Internet? That was decades ago. I am not talking about redesigned toothbrushes, razors with four blades instead of three, electronic gizmos with their buttons rearranged, or recording on a disc instead of a VCR tape; I am talking about entirely new products and services that enable people to do things they heretofore could not do. I am also not talking about relatively minor inventions, but ones that fundamentally improve the lives of people, leaving them spellbound.

I also privately wrote to him and politely inquired about the great ideas generated by his company.

No reply.

No surprise.

Commenting on the lack of genuinely valuable innovation, one person wrote:

“When will Gen Y start solving real problems? You have a handful of people getting rich off some crappy app where the root of all monetization is always advertising. Where's the next Apple?”

Another added that “none of [the young hotshots making money off tech apps] are building anything of enduring value.”

If our leaders were smart and wise and more interested in stimulating our economy than repaying their supporters, they would fund the one obvious massive infrastructure improvement (not the invention I alluded to above) that would literally transform our nation, rocketing it well into the 21st century, and doing just as much for the physical world as the Internet did for the information world. If we did this, in the end we'd have USA 2.0 — a country far ahead of the world in terms of productivity, efficiency, energy efficiency, convenience, and modernization.

I hinted at this in another blog posting, and will soon describe it in detail. This project would create millions of good-paying jobs and trigger myriad secondary benefits: much less pollution, considerably fewer traffic accidents, “cars” that cost less than a go-kart but last virtually forever with almost zero maintenance and over 95% less fuel, businesses that have hundreds of times more customers, better law enforcement, improved healthcare, less need for war, and more free time for everyone to enjoy life. I could cite other benefits, which would fill several books.

I realize this will seem like a pie-in-the-sky pipe dream to inside-the-box thinkers, but it is all practical now. In fact, it could have been done a century ago. What's stopping us? Primarily limited imaginations. Most things that seem too good to be true usually are, but not this idea, which most people won't fully comprehend until they see a demonstration of it. Want to see that demo? Stay tuned.

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  1. John Mackey: To Increase Jobs, Increase Economic Freedom
The views expressed on this page may or may not reflect my current opinions, nor do they necessarily represent my past ones. After reading a slice of what I wrote in my various websites and books, you may conclude that I am a liberal Democrat or a conservative Republican. Wrong; there is a better alternative. Just as the primary benefit from debate classes results when students present and defend opinions contrary to their own, I use a similar strategy as a creative writing tool to expand my brainpower—and yours. Mystified? Stay tuned for an explanation. PS: The wheels in your head are already turning a bit faster, aren't they?

“The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.”
F. Scott Fitzgerald

Reference: Imagining dialogue can boost critical thinking: Excerpt: “Examining an issue as a debate or dialogue between two sides helps people apply deeper, more sophisticated reasoning …”

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