has been or shall be unfurled, there will [America’s] heart,
her benedictions and her prayers be.
But she goes not abroad in search of monsters to destroy.
She is the well-wisher to the freedom and independence of all.
She is the champion and vindicator only of her own.
--John Quincy Adams
We recently received a very considered letter from an esteemed reader and business owner on the state of our economy. His story is repeated many times over, throughout our nation. His thinking about "Man Years" and how to keep them being wasted was all the more impressive knowing that this man's politics hew to the conservative.
Yet for the good of his country, he concedes that government infrastructure projects may be necessary, and would be preferable to the crippling unemployment with which the country now struggles. Not only are the skills of otherwise productive members of society lying fallow, but the self-esteem garnered from participation in meaningful work is missing -- an intangible essential for a thriving economy.
Here is our friend's letter:
Both my wife who is in her early 50's with a BA and my daughter who recently graduated with a BA in business are both looking for jobs. Both are totally employable and have long job histories.
We deal with small specialty manufacturers in a progressive technological niche. Private sector business disappeared this time last year. DOD work was all that was available. Also banks pulled their small business credit lines.
Finally we are starting to see some signs of life though barely. Still even though last quarter saw a rise in economy due to inventory adjustments, most US distributors of electronic equipment are keeping minimum stocks and we are having to directly to manufacturers in Germany and China to get parts quickly. Liquidity has vanished from the economy as has any parts inventory or surpluses in people or capital. …. US manufacturing went on a going out of business sale about 15 months ago and it hasn’t really ended – just not going down as fast.
If I were in DC right now, I’d be advocating a press to full employment (5-6%) at any cost. Dry dusty economists forget the social impact of loss of a job to a family, the lack of reward for constructive work, the side ills of alcoholism, food stamps, etc that come when work ends.
We need to focus on Man Years in my opinion. The one thing that can never be recovered – time. I’d prefer people have private sector jobs, but failing that I’d prefer a government funded job, even a temporary one to unemployment. This is what is getting lost in the statistics – we pay people to work or not to work but bridges get fixed, kids get educated and so on only when work – not unemployment – is subsidized.
The tax credit/cut plans for small business aren’t going to have the desired effect because so many companies are operating at a loss right now. Given the paper thin margins contractors are willing to bid for jobs right now, I’d suggest we purchase long lived asset government programs – highways, building repair, build reconstruction, etc.
In DC recently I was at the Supreme Court building. It was built in the depression for 9.5 million and since it came in under budget they furnished it with the leftovers. We are at a similar point in time and if we think multi-year about our investments we can benefit for decades with the work – the lost man years – we invest in right now. … A similar return would come from education – investment in our kids – but that is another chapter.