The solution really is that simple

Finally, after all these months of wailing, gnashing of teeth, placing blame and just downright stupidity in most cases, we get an economist who has the easy, simple, eloquent solution to end the recession we are in the final throes of today.

We’ve listened for three years now to various methods to end the current economic downturn.

Most of the ideas are lofty, powered by incredible brain trusts, and have a partisan political theme that nowhere near touches the actual issue driving the recession.

Why, one might ask, do we have a continuing recession when Wall Street, banking, automotive and financial services sectors have shown such strong rebounds in the last year?

Each of the industries mentioned above have one thing in common. They each make more money by liquidating employees. When the biggest employers liquidate employees, more people have less money to spend.

I’ve personally listened to the clap-trap of trickle-down economics for more than three decades. And that’s all it has ever been—clap-trap.

This country, and its sort-of-but-not-quite capitalist economy, has never enjoyed economic prosperity when people don’t work. Corporations make their money when other people spend money. Banks make their money when other people spend money. Wall Street makes its money, well, who the hell knows how Wall Street makes its money.

There is one common theme here. Everybody relies on other people spending money to make money.

Take that one step further. When people spend money, everybody makes money. I’ve never understood why economists find that so hard to figure out.

If 5,000 people have $100 in discretionary income, and they spend it all, several thousand someone(s) make $500,000 altogether. If 100 people have $5,000 in discretionary spending and they spend it all, a lot fewer people make $500,000 altogether, so the rollover dollars from the second tier is more limited in the second scenario than in the first.

It’s actually that simple.

McDonald’s make its billions getting 1,000 people a day to spend money in their various stores. They in turn gave 35 people money to spend per store. A high-end restaurant made the same billions but only passed it along to 15 people.

It’s actually that simple.

So anyway, this economist has decided that if we simply stop giving stimulus money to governments that will bid projects into the hands of a few who will employ as few people as possible to maximize profits for themselves, and start hiring five times as many people to do the job, we eliminate the hope that the one person at the top will actually employ those same people on the same job for the same money.

Put 30,000 people in Detroit back to work repairing our country’s collapsing infrastructure, paying them directly from government funds, and 100 businesses open back up to service the 30,000 people who now have money to spend.

And the taxpayer saves money because we get something in return for our tax money, and if we eliminate the middle man, we eliminate another layer of capitalist-induced profit.

It really is that simple.

Keep the money out of the hands of those who would simply add it to their bottom line and put it in the hands of those who will have to spend it to survive, and our economy becomes the thing of beauty we all once thought it was.

It really is that simple.

Of course, we all know that simple has no translation in government-ese.

But at least one guy gets it.

No Comments »