Why talking jobs is better than campaigning on values
In Seattle and nationally, our political discourse is frustrating and circular, wrapping us in irrelevant talking points. How about discussing the ways we make a better future?
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So how do we judge good investments? And do deficits matter?
Kemmsies shares some insights into this debate. In a normal economy government investment is usually 15 to 20 percent of GDP. In China, investment (when both private and government activity are combined) is 50 percent of GDP. Looking at the economies from another persepctive, in the Eurozone, the debt-to-GDP ratio required by the 1992 Maastricht Treaty is 60 percent. Here, where the economy is doing better, the U.S. debt to GDP ratio is 100 percent; while Japan’s is a whopping 250 percent.
While we cannot ignore deficits in the long term, making investments that increase production to meet growing demand are far too important in the short term to cut in the name of deficit reduction. Investments must be judged on the basis of increasing capacity for production and exports (both of which will help us pay down the debt over the long run). This generally means that transportation and education will deliver the biggest bang for the buck.
And lest we fear that only countries with natural resources can be successful, we should consider post-war Japan. Japan invested in transportation and education and became great innovators and the second largest economy. Currently, Japan is third, behind China and the United States. Unfortunately, they have had some major setbacks coupled with demographic realities — an aging population — that have taken a toll. But they have bounced back before and likely will again.
There is already a new economic order rising from the ashes of the 2007–2009 collapse. America can once again be a leader in shaping this new reality. But much will depend on our political leaders having a productive dialogue about how to take the near term good news to the next level and begin subsidizing production over consumption.
Listening to Kemmsies’ presentation it was impossible to guess if he was a Democrat or Republican. A refreshing respite from what passes as political debate.
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Comments:
Posted Mon, Apr 30, 8:26 a.m. Inappropriate
Jordan: You nailed it on why Sodo is the wrong location for a new arena.
Washington as we hear often is the most trade-dependent state in the country, and yet the proposed arena would continue to constrict egress and ingress into one of the city and state's most vital economic engines. Unless there is a commitment -- in stone, since last time it was ignored -- to make the transportation investments necessary to relieve the bottlenecks, allow freight to move more efficiently and keep the industrial/manufacturing center of the city viable, the arena, if built, should be located somewhere else.
There are many other arguments against this proposal, but this one is the most compelling. You cannot replace manufacturing/industrial jobs with relatively low-wage service jobs and expect anything but negative economic consequences.
Posted Mon, Apr 30, 10:34 a.m. Inappropriate
The new arena can easily fit into SoDo while all southbound imports and cargo can be unloaded at the port of Tacoma. SoDo deserves all the benefits of basketball, hockey, trade shows, and concerts that cannot be squeezed into the outdated and misplaced Key Arena and I-5 rooftop disaster so-called convention center.
Posted Mon, Apr 30, 10:42 a.m. Inappropriate
Thank you for this cogent article. Unfortunately, since "values" issues are easy to understand and high-pitched, it is easy to get sidetracked by them.
Washington's tax code hinders the economy. I think that the greatest accomplishment possible for the next governor will be to forge the bipartisan coalition necessary to modernize the state's tax system.
Posted Mon, Apr 30, 11:18 a.m. Inappropriate
Some good points in this article but it's riddled with standard mainstream media false equivalence -- "both parties are equally guilty." Read this article and listen to this interview with two veteran congressional analysts who long have been known for their bipartisan centrism. They say media folks need to get some guts and call out the Republicans.
http://www.washingtonpost.com/opinions/lets-just-say-it-the-republicans-are-the-problem/2012/04/27/gIQAxCVUlT_story.html
http://www.npr.org/2012/04/30/151522725/even-worse-than-it-looks-extremism-in-congress
Posted Mon, Apr 30, 11:27 a.m. Inappropriate
Continued growth is a Ponzi scheme. We need to think about providing enough for everyone in a sustainable way. One way, already being considered by France and England,is to cut the work week to 3 days. We would make enough for necessities, have fewer luxuries, but get back time, which is really our most precious resource.
Another obvious way to improve the quality of life would be to subsidize people to live near where they work. The same dollars that fuel costly transportation projects and their maintenance could be used to increase the quality of peoples lives. What we would get is more time now wasted in commuting, less spent on fossil fuels, less global warming pollution, getting ourselves less dependent on foreign oil, fewer traffic accidents, and less stress. If we took even 10 percent of the current cars out of the commute, it would end most of our rush hour traffic jams and render our current highways adequate.
Posted Tue, May 1, 7:38 a.m. Inappropriate
Hi Silenus,
Oh how I like your fresh thinking: "Another obvious way to improve the quality of life would be to subsidize people to live near where they work."
Thumbs up!
~ December
Posted Mon, Apr 30, 2:39 p.m. Inappropriate
Our city and our state has a choice here. Do we want to be for job generation or for the eventual destruction of the most important industrial neighborhood in the state?
Hansen hasn't hid the fact that he wants the arena to push Sodo toward gentrification, which means this is an either/or proposition for the state.
Manufacturing is our future, and yet Hansen wants to kill manufacturing as we know it in Seattle.
Some of we basketball fans who don't believe Sodo is the right place for the arena have come together on Twitter and Facebook. Join us:
https://twitter.com/#!/ArenaChoices
https://www.facebook.com/ArenaChoices
If you don't believe Sodo is the right place, be sure to also tell the City Council and County Council very soon. Hansen is trying to ram this deal through without adequate public input.
Posted Mon, Apr 30, 4:58 p.m. Inappropriate
I would be interested in knowing how Mr. Kemmsies explains the fact that that Europe's most austere economic power, Germany, is weathering the economic downturn the best, while Europe's most free-spending nations are the ones feeling the most misery. Profligate deficit spending only works when you can control your currency and wipe out your debts in the following years with inflation caused by printing money. Of course, that degree of inflation punishes savings and investment, and that bring about its own miseries, doesn't it?
Posted Tue, May 1, 9:47 a.m. Inappropriate
dbreneman -- Thanks for the question. Dr. Kemmsies had the following response:
"Germany actually ran a surplus so that it would have funds when a rainy day came. This is what Keynes argued for. He did not suggest that a coutry continuously run a deficit. The US has not run a surplus since 2000. The euro did not completely come undone because it is the Deutschemark in disguise. I belive Germany is tapping into its rainy day fund and increasing taxes in order to bail out Southern Europe. But Germany is not in that great a shape either. Exports to China and to some relatively unstable Middle East countries have been driving its economy. As China's economy cools, so will Germany's."
Posted Tue, May 1, 10:48 a.m. Inappropriate
Many countries, many stories, many opinions. Here's an interesting one from a professor who bills himself as a Democrat, but hardly ever sounds like Harris:
http://blogs.the-american-interest.com/wrm/2012/05/01/icelands-recovery-lessons/
Posted Tue, May 1, 7:15 p.m. Inappropriate
Thanks for the reply, Jordan. It should be noted that the German taxpayers have little patience for bailing out the profligate southern Europeans after spending two decades bailing out the former East Germany. Many workers in the east, after two generations of brutal dictatorship, had no connection with the work ethic, and so the government was obliged to give many in their 30s and 40s pensions in exchange for their promise to stay out of the workforce. In addition, the fact that vocal critics in the distressed countries of Europe view the actions of their benefactors as the "second German invasion" leaves many Germans wanting to kick the ne'er-do-well cousins off the proverbial living room couch, and good riddance. Germany may yet declare the Euro experiment a failure and go back to the Mark, a prospect that should give the French pause.
Posted Tue, May 1, 12:45 p.m. Inappropriate
Unfortunately we measure ourselves with the blindly-open GDP, which equates arguably non-productive activities of oil-spill clean-up and hockey on par with manufacturing of exports or provision of healthcare. The last decades' fantastical growth of the finance industry as a percent of GDP should have been a clue as to how amiss we were from investing in the production and infrastructure that would secure a stronger present and future. And when the bubble created by the likes of Mr Hansen burst we find ourselves individually and collectively bankrupted or just holding the bag.
But often even our infrastructure investments are not pragmatic. Until we adopt methods such as a triple (or quadruple) bottom line, our emotions and an erroneous scoring system (along with broken politics) will continue to favor stadiums (with their relatively short shelf life and cotton-candy GDP) over education and infrastructure, and will hamper us all the way down.
(1000 chars a challenge, plz fix!)
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