A socialized financial system, combined with the Balanced Trade Act, investing in education and training and implementing growth-oriented tax reform, could eliminate joblessness and poverty in America.
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Socialize the too big to fail: Market-Socialism
Commercial banks and financial institutions need to be socialized more now than ever before. The Federal Reserve has announced even lower long-term rates via purchasing longer-term bonds. The 10Y T-Bond Yield has fallen to 1.8%, which is lower than during long periods of the Depression.
The problem is that lower interest rates won't revive an economy when financial banks and institutions aren't lending. During the housing bubble, consumers were often approved for mortgages with nothing down. Now you have to have a fifth down before you're even considered for a mortgage. Housing, when adjusted for inflation and mortgage rates, has never been more affordable.
Furthermore, corporate bond yields have never been this low. The problem in the corporate sector is that businesses aren't spending because confidence remains low and consumer spending remains weakened. The Fortune 500, for instance, are sitting on over a trillion dollars in surplus cash, just as the banks and institutions are sitting on another $2 trillion in surplus cash.
The amounts of surplus cash that could now be mobilized is unprecedented.
We could now afford to modernize our infrastructure and transition our entire electrical grid from fossil-fuels to clean and sustainable energy.
We could now afford to eradicate joblessness.
Washington, more now than ever before, should socialize the most profitable commercial banking institutions and Wall St. firms (I.e. Bank of America, JP Morgan Chase, American Express, Wells Fargo, Goldman Sachs and Morgan Stanley.)
The sitting surplus cash should be converted into long-term T-Bonds and Securities and should be used toward infrastructural programs via a Public Works - Works Progress Administration. Infrastructural spending could be directed toward: Transportation, Water, Energy and Communications.
(I.e. Interstate Highway System, rebuilding our bridges, national high-speed rail construction, subway construction, monorail construction, carpooling and busing lane construction,
wind farms, solar farms, hydro dams, ethanol refining, wood-chipping,
coastal desalination, advanced waste-water processing and universal (no charge) high-speed urban and suburban wireless internet service)
Furthermore, a socialized financial system would eliminate the normal operational risks associated with the financial sector. In other words, we would be able to guarantee mortgages, loans and charge-cards, which would allow for even lower interest rates, fewer foreclosures and fewer bankruptcies. In a sense, the perception of trouble creates trouble.
The Federal Reserve (Fractional Reserve Banking) could then be used to renegotiate lending terms, conditions and rates to allow Americans to continue living in their homes.
Homes that are foreclosed during the financial crisis could be returned to their previous owners instead of sitting abandoned. Mortgages could be converted into long-term zero-interest loans, which would be affordable.
Another advantage of a socialized banking system is that it could, in theory, be deregulated, allowing the banks and financial institutions to begin holding equities. Instead of being operated as a for-profit enterprise,the commercial banking system would be used to stimulate the economy and earnings in other areas of the economy. (I.e. For Small Businesses, Farmers, Consumers, Workers, Stakeholders and the State)
In that sense, the banking system and the surplus cash sitting in the banking system could even be used to finance socialization in other sectors of the economy. (Such as Energy Production, Drilling and Mining)
Even though we'd be converting to clean energy, certain economies, such as China's and India's, will take much longer to make the transition from fossil-fuels to renewable sources. In the mean time, we could provide them with their energy needs.
(I.e. We're still sitting on massive reserves of coal, biomass [woodland and farmland], natural gas and even off-shore oil. Furthermore, a state owned energy sector could make substantial investments in solar and wind farms in China and India.
Instead of borrowing money from the Chinese to purchase Chinese goods, we could borrow money from the Chinese to build large solar and wind farms in China, which would provide us with a long-term source of foreign income. The wind turbines and solar collectors could be manufactured here in America and exported to China to resolve our consumer trade imbalance with them. It'd be a win-win for us and China.
Investing in the energy sector could resolve a multitude of our nation's economic problems. (I.e. Establishing a socialized National Coal Board, such as the one Britain had during the Post-War Expansion, could create jobs and eradicate poverty in rural Wyoming, West Virginia, Illinois and Montana. Oil and gas drilling could create needed jobs in Alaska, Texas, Oklahoma, Wyoming and even in (coastal areas) around such states as California and Florida.
Mass ethanol and biomass production (for Chinese consumption) would create new jobs in farming, lumber and agribusiness, thus eliminating rural joblessness and poverty in the Midwestern and Southern United States.
In Northeastern and Pacific urban areas, new jobs could be created in industrial manufacturing (solar collectors, wind turbines, hydro turbines, nuclear breeder reactors, smokestack scrubbers and waste-to-energy incinerators).
Economic research has suggested that self-sufficient energy production here in the United States would create around 4 to 5 million new jobs.
Mass production for providing the Chinese and Indians with affordable electric could create even more high-paying American jobs.
The same holds true for the mass production of electric and hybrid automobiles. Chinese and Indian consumers drive smaller distances than American consumers and would be more willing to purchase electric automobiles.
Hybrids, such as the Prius, are an all-around good choice for American, European, Latin and Asian consumers.
We've been falling behind in this field, which is the reason Asian automakers have been outperforming while our Big Three have been loosing market-share. A socialized banking system could be used to socialize, restructure, consolidate and modernize our entire auto manufacturing business until we're the world's leading manufacturer of fuel-efficient automobiles.
Automotive manufacturing has a large ripple-effect, in that assembling automobiles creates new jobs in other areas of manufacturing, distribution and transportation. It's estimated that one in ten American jobs are supported by automotive manufacturing.
Each job created in automotive manufacturing translates into new jobs in electronic manufacturing, tire manufacturing, aluminum and steel mining and manufacturing, etc. We could revive our entire manufacturing sector on clean energy and fuel-efficient automotive manufacturing.
Last edited by RichardAWilson; 22nd September 2011 at 07:16.
A socialized financial system, combined with the Balanced Trade Act, investing in education and training and implementing growth-oriented tax reform, could eliminate joblessness and poverty in America.
Yeah well, so could, uh, socialism.
Market-Socialism =)
Last edited by RichardAWilson; 22nd September 2011 at 15:31.
