[hrothgar]

Might be interesting to start some debate regarding what folks see as the right set of priorities for Obama's first term. Where should he spend all that political capital?

Here's my top three list

1. Carbon tax: I'd like to see Obama press VERY hard for tax on carbon emissions. The tax should be phased in, starting in the near future (say 5-10 years out). I'd argue that that this type of tax would kill two birds with one stone: First, a carbon tax would have a significant (positive) impact on the economy. It would promote significant private investment in renewable energy without the need for an increase in government spending. (I view a carbon tax as a very cheap stimulus package) Second, a carbon tax is necessary to deal with global warming.

2. Medicaid and Social Security

3. Try to provide a soft landing when 1-2 of the big three auto makers go belly up. It seems pretty clear that the one or more of the big three automakers is going to go bankrupt. I am opposed to a massive government bailout to try to prop up Chrysler. I think that the companies should be allowed to fail (and the shareholders should take a bath). However, the death of Chrysler does not mean the death its property, plants, and equipment. There is no reason why a new auto maker can't rise from the ashes (free of Chrysler's union contracts, health care costs, and the like).

I think that it would be wise to start paving the way for a distress sale. Sell off the property, plant and equipment. Use the funds to pay of the company's debts and obligations. Let something new and healthy emerge....

[helene_t]

Stupid question maybe: car makers going bankrupt, is it something the government needs to deal with? What you propose sounds like a normal bankruptcy.

[kenrexford]

1+3=self-fulfilling prophesy.

[Al_U_Card]

Rather than pouring good money after bad, how about spending lavishly on education (work-force and students) and (financially) encouraging research and innovation through tax adjustments?

These are areas seldom "encouraged" by short-term profit seeking enterprise but that have immediate and long term benefits.

On the economy side, don't benefit and encourage the spendthrifts and financial wrong-doers.....put a ton of money into infrastructure to at least provide "benefit" to the people, by the people and for the people.

RESTORE the constitution to its previous state (pre- 9-11).

[helene_t]

Some of the things Obama has said sound protectionist. I hope he will make clear that the US will continue to work for less obstacles to international trade. Otherwise the global recession could easily be worsened by everyone trying to harm the neighbor's economy instead of improving his own.

So I would have WTO near the top of the list.

[awm]

helene_t, on Nov 10 2008, 09:57 AM, said:

Some of the things Obama has said sound protectionist. I hope he will make clear that the US will continue to work for less obstacles to international trade. Otherwise the global recession could easily be worsened by everyone trying to harm the neighbor's economy instead of improving his own.

So I would have WTO near the top of the list.

Free trade is a tricky issue. The problem is that the United States has a lot of laws designed to guarantee that the success of a corporation benefits its employees and not just its shareholders. Some other countries do not have these laws, or have much weaker laws (or in a few cases stronger laws).

The problem is that the job of corporate CEOs is generally to deliver profits to the shareholders who hire them. If this means screwing over the employees so be it.

So the end result of free trade is that those companies which can will move to countries where the labor laws are weaker (or non-existent). While this may well be good for the world's total wealth, it increases the division of society into a wealthy "owner class" and perpetually poor "worker class." In the long run the reduction in social mobility is probably a bad thing even if the goal is somehow to maximize "total wealth."

Drastically restricting trade is a terrible idea. But Pres. Obama does need to pressure the countries with weak labor standards with which we have free trade agreements (i.e. Mexico, China) to strengthen these standards. This may involve using the threat of revoking free trade status (made believable by his campaign rhetoric and his party's control of congress) to create leverage. In fact apparently NAFTA includes some provisions relating to labor standards which Mexico has mostly ignored, so just enforcing what's in the treaty would be a change from the current administration.

In any case I wouldn't rate this as a top priority. Enacting Obama's energy plan (which includes big subsidies for green energy) will also create jobs that have long-term growth potential and help our national security situation. It's like a "public works" program (which he claims could create millions of new jobs) with the additional benefit of helping control carbon emissions and reducing our dependence on middle-eastern oil producers.

[mike777]

1) I hope to read more about the plusses and minuses of the carbon tax here in the forums. I do not fully understand what it is and how it works. I read conclusions in my local papers and magazines that say it is great and terrible.
2) Medicare and Social Security have had ten blue panel commissions to fix them. Nothing seems to happen here except we push the problem back.
3) This whole discussion of bailing out the big 3 GM, Ford, C, is confusing to me. These companies have many foreign owners, foreignworkers and foreign plants, why are we sending USA taxpayer bucks to so many outside the USA. OTOH Toyota, MB, Nissan have Amercian workers at American based plants. The same issue seems true of AIG, they are based in so many countries outside of the USA. If other countries want to bail these companies out that is ok with me.

OTOH I can understand treating CREDIT as a Utility, you cannot let the lights go out, and Credit is what the modern world breathes.

[mike777]

"In any case I wouldn't rate this as a top priority. Enacting Obama's energy plan (which includes big subsidies for green energy) will also create jobs that have long-term growth potential and help our national security situation. It's like a "public works" program (which he claims could create millions of new jobs) with the additional benefit of helping control carbon emissions and reducing our dependence on middle-eastern oil producers."


I understand many make the claim that the Central government will create jobs. I think this is an excellent discussion to have, can a Central Government create jobs or can it merely redistribute them. I grant redistributing jobs into basic research science need not be a bad thing. Trying to pick a winning industry makes me nervous.

[1eyedjack]

There was quite an amusing program aired in the UK a few weeks ago "High anxieties: the mathematics of chaos". It started off with applications of chaos theory to global economic trends, and was particularly astute because it was clearly put together before the recent worldwide financial meltdown and yet appeared to predict it. It finished off with a number of scientists saying that whatever the cause of global warming, it is far too late now to prevent a 5% hike in global temperatures and even if we stopped producing CO2 altogether, so trying to use fiscal policy to tax high CO2 emissions is just so much pissing into the wind and we may as well party on to our inevitable doom in a few years' time. Cheery stuff.

There was some discussion of the program in a blog hosted by the BBC, here:
http://www.bbc.co.uk...anxieties.shtml

I don't know if it is possible to retrieve and view the program itself, this late on. If it gets repeated I may capture it (if I notice).

[mikeh]

awm, on Nov 10 2008, 11:54 AM, said:

helene_t, on Nov 10 2008, 09:57 AM, said:

Some of the things Obama has said sound protectionist. I hope he will make clear that the US will continue to work for less obstacles to international trade. Otherwise the global recession could easily be worsened by everyone trying to harm the neighbor's economy instead of improving his own.

So I would have WTO near the top of the list.

Free trade is a tricky issue. The problem is that the United States has a lot of laws designed to guarantee that the success of a corporation benefits its employees and not just its shareholders. Some other countries do not have these laws, or have much weaker laws (or in a few cases stronger laws).

The problem is that the job of corporate CEOs is generally to deliver profits to the shareholders who hire them. If this means screwing over the employees so be it.

So the end result of free trade is that those companies which can will move to countries where the labor laws are weaker (or non-existent). While this may well be good for the world's total wealth, it increases the division of society into a wealthy "owner class" and perpetually poor "worker class." In the long run the reduction in social mobility is probably a bad thing even if the goal is somehow to maximize "total wealth."

Drastically restricting trade is a terrible idea. But Pres. Obama does need to pressure the countries with weak labor standards with which we have free trade agreements (i.e. Mexico, China) to strengthen these standards. This may involve using the threat of revoking free trade status (made believable by his campaign rhetoric and his party's control of congress) to create leverage. In fact apparently NAFTA includes some provisions relating to labor standards which Mexico has mostly ignored, so just enforcing what's in the treaty would be a change from the current administration.

In any case I wouldn't rate this as a top priority. Enacting Obama's energy plan (which includes big subsidies for green energy) will also create jobs that have long-term growth potential and help our national security situation. It's like a "public works" program (which he claims could create millions of new jobs) with the additional benefit of helping control carbon emissions and reducing our dependence on middle-eastern oil producers.

I wonder how many of those who preach the need to intervene in the labour laws of Mexico and China buy significant amounts of Mexican and Chinese imports? My guess is: most.

While it is all well and good for us, in a post-industrial society, to bemoan the terrible working conditions under which these goods (and, in the case of Mexico, food products) are produced, simply insisting upon compliance with western standards of labour protection is both futile and naive.

The reality is that these industries exist only because the employers can pay minimal wages and pay little attention (by our standards) to working conditions.. yet these 'terrible' jobs are the best jobs that most of these oppressed workers can get.... render the industry non-competitive and the jobs go away... with truly horrific consequences for the now-unemployed workers in societies with no social safety net.. and ripple-through effects for all economies concerned.

We should look to the Industrial Revolution... it is in OUR history books, but it is current affairs for many countries, while still others have yet to get there. Working conditions in European and US industuries 150 years ago were savage.. read Dickens if you have any doubt about the non-idyllic lives of the poor... who are always far more numerous than the rich even tho the history books are mostly about the rich.

Another error is to think that destroying the economic viability of 3rd world industries would save those industries in the West... the problem is that many people would no longer be able to afford the products produced by labour working to western standards, regardless of where the products were made.. which is one reason protectionism fails.. it may 'save' a few jobs but at a huge and indirect (hence easy to ignore) cost to many more.

That is not to say that we shouldn't encourage other countries to gradually improve working conditions as their economy allows... but that will happen anyway... it may take time, it may take political change even more than labour law change, but it happened in our nations and will happen there as well. Trying to force it to happen is probably the best way to slow it down.

[vuroth]

The OP goals sounded very socialistic. The US is just about as far the right economically as they come. I'd imagine the democrats could pass as the right wing party in a lot of western nations.

As for the automotive industry in north america, it will never be free of the unions. If the big 3 are unprofitable now, a clean restart will not be profitable.

I'd like to see Obama send a firm message on terrorism - maybe Afghanistan will be the arena for doing that. Each of the last 2 presidents saw attacks on the WTC. There's no reason to believe that the terrorist won't WANT to strike again. Unfortunately.