Incentives: Economic first step requires more than pundits and speeches
It is becoming increasingly clear that part of the problem with the state of the American economy is that no one really is sure what's going on -- or if anything that is being done is really going to make any difference in the jobless numbers or the market.
And that includes all the alleged experts.
Every evening after another stimulus package announcement -- and another drop in the stock market -- the pundits gather on the financial networks and talk about what to do. And even they look confused.
So since nothing the government seems to do seems to do anything except make people think of more ways to hide money under their beds, perhaps there are some basic tenets that should be considered.
The first is kind of simple (and in all fairness was first echoed by some of those financial talk show pundits) -- if you want people to invest in the stock market and to take their money out of safe havens, give them an incentive to do so.
When the government does not want someone to do something, there is a penalty. The same is true when a certain behavior is to be encouraged.
If the government wants you to buy a green car, there is a program by which you can deduct some of the cost from your taxes.
So, if your government wants to encourage Americans to put their money back in the stock market, officials need to start thinking of incentives to invest and to keep your money in the market.
And if somebody wants to get Americans spending again, they need to shut up every idiot who does not know anything about economics, but who is continually trumpeting sacrifice and fearmongering.
Americans will not be OK until they are confident their jobs and companies will be there tomorrow.
And if this nation wants jobs, employers are going to have to feel safe enough to invest in growing their businesses again -- not planning how many people they are going to have to lay off to keep the doors open. And you do not get that confidence when you give the very distinct impression that anyone who runs a business in this country is a crook or cheat.
Those who say this recession is in part the consequence of panic are dead right. We need stability again -- no more big speeches, but sound economic thought. That would, at least, be a start.
And in the meantime, here is a gesture: How about every single public official -- and the president -- agreeing to work for $1, too. That ought to give the budget a nice boost -- and it would signal that they understand the sacrifice they are preaching to the American public.
It might not send the Dow soaring, but it would be something better than more talk, talk, talk.
Published in Editorials on March 6, 2009 10:40 AM