Published: February 28, 2009 09:02 am      

Let's chart a new course economically

As usual when it comes to the economy, nobody knows exactly what to do about it. This time, let's turn that to our advantage.

The depression has hurt everybody in some way, some profoundly through loss of a home or job, with the lucky ones merely losing a huge chunk of their retirement investments.

Despite the widespread impact and the near-collapse of the banking and credit systems, the experts still are unable to work up a paradigm that tells us that if we do A, then B will result.

We may have thought economics seemed like a science after seeing the textbooks and diagrams of college classrooms, but it is not.

It remains unclear whether the $1 trillion-plus in bailout and recovery money will pull us out of the tailspin, but our government's traditional way of attacking problems is to throw money at them. And I haven't heard too many alternative proposals offered.

Some quibble about how much we're spending or where the money's being directed, but few believe the government should do nothing. President Obama has loudly proclaimed that he refused to not act for fear of a complete economic meltdown.

For decades now, our economy has been based on greed and debt, so the temptation certainly exists on the part of those who have not reaped the spoils to say, ``Just let the system die and we'll build a new, more just, more planned, more democratic economy.''

But who is willing to take that risk, and perhaps create decades of hardship and suffering before we can rebuild our economy _ with no guarantee we'll end up with better lives?

Where is the philosopher-king who could lead us through that quagmire and back out into a system of goods and services, and supply and demand, based on products we really need that are good for ourselves, our children and the Earth?

It's not going to happen. But we have to try and that means change.

During the last three decades, studies show that wages after adjusting for inflation have risen only slightly. Meanwhile, business and industry profit margins have soared because of the increased efficiency and stagnant wages of their workers.

Then the borrowing begins. Since purchase power can't keep up with all the stuff being churned out, and, let's face it, most people want stuff, the credit-card boom blasts off.

So, the way some economists see it, all those rising profits, which were garnered from the increased efficiency and flat wages of the workers, are loaned back to the consumers so they can afford to buy the products they produced.

Greed and debt. Eventually, it led to the skyrocketing consumer debt of the 1990s to the present and contributed to the high-risk housing loan boom and collapse. The president Tuesday night referred to the process of instant gratification that corrupted the wealth of the few and the consumerism of the many.

So, though he realizes what has infected us and dragged down our economy, even he cannot say for sure that his solution _ a New Deal-style stimulus package _ will work.

And though no one disputes the need for it, look what's being created to make sure the $1 trillion is being spent appropriately and not beset with waste and fraud. We have the vice president heading up a Recovery Act review board and a bailout czar to keep track of the spending habits of banks and executives.

When and if the crisis has lifted and recovery is achieved, will it take those kinds of ``big brothers'' watching over big business and consumers to make sure they don't resort to same base instincts that led to this depression?

Let's hope not, but that's presumably why so many anti-Obama fanatics are obsessed with him being a socialist or a communist. They are afraid he's going to impose some sort of economic and consumer planning board to tell us what kinds of products and institutions we should and should not have _ such as renewable energy, health care and education.

Naturally, the people who look forward to and even get excited about buying all that junk at Wal-Mart want to be free to continue to do so.

Unfortunately, it's a habit that's not good for people or the Earth.

We do have to change. We can't leave our economy and the makeup of our social and natural environments up to Wall Street and big business anymore. It's a new world, and we have to make ourselves anew.

And if we need the government to dig us out of the hole that big business has gouged, then we at least have to do what we can to help it lead us in the right direction next time around.

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Cary Brunswick is managing editor of The Daily Star. He can be reached at (607) 432-1000, ext. 217, or cary@thedailystar.com.