Friday, November 5, 2010

The lesson for the victors

The landslide shift in U.S. and Michigan political power occurred more or less as predicted.
Gridlock is predicted next and I fear those predictions also will come true.
That would be a shame for both the suffering taxpayers and for the newly elected and re-elected politicians.
For the taxpayers, it would be a shame that those politicians cannot find bipartisan and constructive ways out of the economic crises, because we really need new thinking and new solutions and new direction.
For the politicians it would be a shame because if they do not learn to work together and do something for the people -- as opposed to doing something for the party or for themselves -- they will be out in the next election.
So to avoid those predictions, Michigan politicians have to reduce spending to bring it into line with our growing and robust competitors. Countries like China and India, are burdened with legacies of enormous poverty and not enough infrastructure.
They will be forced to spend more.
But those countries are also the compeitors for the manufacturing industries that we are attempting to buy back (with tax dollars) into Michigan. We cannot affort to give huge tax incentives to businesses to stay in Michigan and employ Michiganders, and still maintain our level of social spending. Who will end up paying the double load? The taxpayers.
The states that are winning that struggle with the third world are those with the lowest tax and reulatory burden. Just compare the growth rate of Texas over the last decade with the decline rate of Michigan.
The same is true for the housing crisis -- until this is fixed -- the U.S. economy will stagnate. The newly elected must waste not time coming up with programs that work, which do not add to the already enormous debt and which turn the trend in prices upward.
I would highly recommend privatizing anti-capitalistic Freddie and Fannie, dropping failed government policies of trying to play god (and doing a poor job of it) over the economy, breaking up fiancial institutions that are too big to fail, and finally by recognizing that when America recovers it will be though the efforts of entrepreneurs and small businesses that discover a new way.
And that is where government should invest its aid dollars.


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