Having discerned that the American Dream has been stolen, Mr. Hedrick Smith and I continue our discussion as to how to induce the thieves to give that dream back to us and to be doing that right away, if you please.
A selection of notes, articles and videos for Monday, 5th November, 2012, constituting a part of a continuing discussion of keen interest to all thoughtful Americans now follows:
My friend Hedrick Smith and I continue our most worthwhile and collegial discussion about how to resurrect the American middle class from the rubble of the Panic of 2008.
We shall hear first from Mr. Smith, recent author of a remarkable book, Who Stole the American Dream, a book I whole-heartily recommend to readers available here at a most reasonable price:
On Sun, Nov 4, 2012 at 3:31 PM, Hedrick Smith <firstname.lastname@example.org> wrote:
Our problem today is not shortage of capital accumulation: since 2008, American business has been sitting on close to $2 trillion of capital generated by its cash c=flow and, as the New York Times reported about a month ago, venture capital funds have raised another $1 trillion in capital but cannot find places to invest it and so they are preparing to return the funds to their investors.
Our problem today is inadequate consumer demand. That is the real job creator in this economy. We need to generate more consumer demand. One way would be for companies to do what Henry Ford did when demand was low in his era, pay their workers more. and share more of their profits with mid0-level employees instead of rewarding the top echelons with massive riches.
Another way would be to require the banks to use their profits from the taxpayer bailout to refinance close to 15 million mortgages that are now under water and release hundreds of billions of dollars in purchasing power (consumer demand) by putting those people into 3.5% loans instead of the 8-9% bubble era loans that they are now stuck in, because they can’t get refinancing.
A third way would be to shift funds form defense spending to reconstruction of our sadly aging and competitively inefficient national transportation network, a project favored by the U.S> Chamber of Commerce and many former corporate CEOs.
So there is much to be done.
PS: And whatever Kennedy said about taxes, what he did was to stimulate growth with a marginal tax rate of 77% and it worked – perhaps an inconvenient fact for those who insist that we must lower taxes our current 35% marginal tax rate even lower, but track record shows that the strong consumer demand of the 1960s was a better engine of growth than the low tax rates of the 2000s.
We seem to be hitting the same cylinders now—nicely done–that is progress toward a solution. The Panic of 2008 did more than destroy large sums of personal and corporate capital. Far more importantly, it demonstrated to businessmen that they simply do not need as many workers–mainly in the middle rankings–workers who occupied jobs that, if something is not done about it, are never coming back. This condition will destroy the consumer based America you and I know and love.
In January, I survived a very serious surgery during the convalescence from which I recorded a video and wrote a few articles about what I think needs to be done–immediately–to resurrect the middle class. Kindly have a look and know when you do that the taping, while amateurish, was designed to get my message on film and to enable me to listen and to see if my mind is back to being sharp as it had been.
I appreciate your comments on these articles attending and the video likewise–as they absolutely speak to specific solutions to the troubles that most vex you and I and all thinking and deliberative men in our audiences.
JOHN DANIEL BEGG
john daniel begg public affairs and speechwriting
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Smith makes a number of apt points. When wealth is spent (by ordinary folk) rather than hoarded by corporations and affluent individuals, the real engines of growth are in place.
Rick is a very nice fella–and of a very active mind. John Begg