The mess we're in

In a country that has as many advantages as this one does, it is hard to believe things have gotten so bad. Of course bad is a relative term, since most people in this country still have a standard of living envied almost everywhere else.

So what exactly is causing the problem? Well partly because of our past success and the development of better communications and transportation technologies, it is cheaper to offload work to other countries. So, if you were in manufacturing or a service that is now done elsewhere, what is your new role? We haven't figured that one out yet and it may take quite a while before we do.

Pretty clearly this type of transition will work itself out. However, it will be painful. If you think about it, when the American industrialization took off, we lived off the cheap labor of European and Asian immigrants who couldn't find suitable work in their native lands.

In previous blogs I have talked about the wealth equation and while we create a considerable amount of new wealth every year, it is no longer enough to offset the wealth we send overseas. This net deficit is going to result in a better standard of living elsewhere and a declining standard of living here. Now, it is certainly not impossible to return to a stable or improving standard of living, but it takes some smart policies to do so.

The first thing is to reduce the wealth being exported in exchange for energy. We need to use domestic and/or renewable energy resources more and more. Its not gong to be like turning a switch but every bit of energy changed from foreign to domestic reduces wealth being exported.

Second we need to level the playing field for jobs. If you sell products in this country, you should pay a fair share of taxes. There has to be a better relationship between the profit made and the taxes paid. If you manufacture in this country you employ workers who pay taxes. You as a company shouldn't pay taxes until you sell your product and then only if you sell the product in this country should it be taxed.

Third, we need to eliminate health insurance and pension as a business cost and accept it as a societal cost. There is no logic in making it more expensive for a company to do business here because of medical and pension responsibilities.

Three simple things that would go a long way to cleaning up the current mess.