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March 3, 2014

Many economists and one notable non-economist, Pope Francis, have stated and/or written that unemployment (especially youth unemployment per the pontiff) is the biggest problem in the world today. Note that such experts and a prominent layman did not name the lack of return on investment to Wall Street or London and Frankfurt exchanges as a problem or even a concern, yet our American policymakers by their bowing and scraping before Wall Street figures involved in international trade would have one believe that return on investment is more important than investment in people. That is a fundamental mistake in current political rationale, perhaps grounded in “campaign contributions” (formerly known as bribes) both past and anticipated from the rich and corporate class. Unfortunately, unemployment is world-wide, notably but not limited to such EU countries as Spain, Portugal and Greece. The pope and others are concerned for fear of civil commotion among millions of the young who are standing around on street corners with nothing to do, feeling abandoned by their governments and their politicians, perhaps just waiting for a galvanizing person of revolutionary bent to lead them.
When you send jobs to China to make more money for the already rich, you are sending more people in America to the street corners and/or unemployment lines and/or unemployment compensation and SNAP offices, which is why the Dow and S & P measures of our economy are increasingly meaningless. They are not measuring our economy; they are measuring corporate success in a global economy. Those measures are breaking all-time records while our domestic economy is limping along, a victim of poor demand due, among other things, to wage inequality and inattention of our politicians, who would rather fight than solve the nations’ problems. Wall Street denizens and ordinary Americans live in two different economies; theirs of historic profits, ours of unemployment, poverty and stagnant wages.
So if unemployment is our biggest problem, then why aren’t we treating it as an emergency as FDR did during the Great Depression? Why aren’t we doing the things we need to do and not doing the things we should not be doing in order to at least reduce the ranks of the unemployed? The EU has the message. With the blessing of Madame Austerity herself, Angela Merkel (hardly a raving Keynesian) has said yes to an EU Keynesian plan to come up with 8 billion dollars to assure unemployed EU youth that they will have good jobs within four months of application. For once, she is listening to someone other than German bondholders amid ”loans” to poor EU members in their junk bond prison(s). Wise move.
It is clear that our American politicians (captive to Wall Street’s largesse) are not going to do anything about our unemployment debacle and the lopsided trade agreements and giant trade deficits which led to this continuing disaster (since their patrons are making historic profits in the marketplace we have allowed them to design and control and are interested in maintaining the status quo), but I am nonetheless going to propose a radical program for reform with a view toward putting America to work and evening up our trade deficit, all without regard to ideology. We don’t have time to argue isms; we as a nation state are headed for the dustbin of history. It is time (as in the 1930s) to take economic risks to get our economy back on track, an economy that will serve all the people and not just the narrow elite.
My proposals will include protectionism over so-called “free trade,” widespread use of tariffs to protect domestic industries as measured by comparative labor costs etc. Stay tuned for Part IV. GERALD E


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