Demand sensible dialogue from pols
This election cycle has been notable as the major causes of economic stagnation and job loss have barely been mentioned, and, if mentioned at all, few corrective policies have been advanced. Most of these depressive factors have been developing for 30 years or more; therefore, the trends have occurred during administrations controlled by both major parties. Following are some of the major causes:
Health Care Costs: U.S. health care costs are approaching 20 percent of gross national product, while they are approximately 10 percent for most major industrial countries. U.S. health care outcomes are also somewhat inferior to most other developed countries. Of course, a dollar spent on health care is one not spent on some other service or commodity that creates jobs and wealth.
Consumption and Investment: Dollars of income are utilized for consumption or investment. Lower-income citizens utilize most income for consumption, while higher-income citizens invest. As wealth distribution becomes more concentrated in fewer individuals, consumption is reduced, and consumption drives job creation. Investment alone cannot significantly create jobs, because a great part of investment serves to purchase capital goods required by increased consumption.
Chinese Exchange Rate: The Chinese yuan currency is undervalued relative to the U.S. dollar, perhaps in excess of 20 percent. This undervaluation makes Chinese goods relatively less expensive, which stimulates the export of jobs to China. As negotiations have had little success, the common solution is to impose tariffs on Chinese goods.
There are other important depressive economic factors, such as quality of education and the substantial productivity gains from technology (an unavoidable mixed blessing), but the historical changes in the above three factors probably have resulted in more than two-thirds of the unemployment problem. They can be fixed. It is time to ask your elected representatives for plans and solutions, and to demand more sensible political dialogue.
Jon Thomas
Lombard