Third Depression: Barriers to Recovery
A lot stands in the way of returning to pre-collapse employment levels in the USA.
- We have been investing very heavily in the healthcare sector, a sector which creates fewer jobs per dollar than most others, without being willing to control costs there. The “doctor fix” making its way through the Congress as we speak is the latest example of that lack of willingness.
- We have persisted in subsidizing things, e.g. housing construction, oil consumption, that are not in our long-term interests. The long-term eventually arrives.
- We subsidize the incomes of people who don’t need subsidies.
- We undertake too much with our military and spend too much on it.
- We have imposed an increasing administrative burden on businesses in the form of regulations, especially the execrable Sarbanes-Oxley. I know of no business that has improved its actual accountability by implementing it. But I know of lots that are bearing substantial costs by doing so.
- Government at all levels is mired in the 1950’s in business methods, personnel policies and procedures, and, most of all, costs.
- We should never have admitted China to the WTO or granted it permanent most favored nation trading status without exacting much more stringent actions from the country including abandoning their peg on the dollar and allowing currency to be freely traded in China. China is so vast it can shake the world economy and, since it continues to be authoritarian, it can do so as a matter of policy.
- The policies of the Fed, contributing to asset inflation, made us think we were better off than we were.
Other than that, though, piece of cake.