Economic "Stimulus" Considerations

SAVE AS FAVORITE

VIEW FAVORITES

By Rowan Wolf (about the author) Page 2 of 3 page(s)

opednews.com Permalink

What is happening, and what is continuing, is that we are seeing giant capital become behemoth capital as the entire financial market rests in the hands of fewer and fewer players. As that happens, the need to prop up these failing giants becomes ever more critical. This will not take us to economic stability - but it massively expands the power and reach of a system that created, and continues to benefit from what they created.

More and more of our "eggs" are going into fewer and fewer deteriorating baskets. The current strategy is potentially setting the world up for a collapse of almost unimaginable proportions. What we may see out of that collapse is the emergence of a "capital" world where there are a few very big interests ... and the rest of us.

Suggestion 2
Redirect the flow of public funds to community banks and credit unions. Invest in small business, and seriously consider micro-lending banks in the United States. Refinance the housing market through community financial institutions - not through Citibank.

While we are all too well aware that we are in the throws of a national and global economic crisis, it is not the only one we face. We also face resource and climate crises. What is clear from virtually all ways to approach sustainability (economic, resource, and climate) is to relocalize economies. This means building and rebuilding local economies so that money and energy "circulates" and strengthens at a local level. The converse is what we have created - generators of wealth that are siphoned off to global corporate entities.

Some might argue that this is "isolationist." However, I am not arguing for isolationism. I am arguing for more localized functioning and control of our economies. Restructured trade and investment, coming from strong communities and nations, sends the largest share of the benefits to the actual people - not to corporate entities.

I am a sociologist by trade. "Economy" within my frame of reference is the "production and distribution of goods and services." Framed another way, it is the organization of what people do on a day to day basis to survive, and how the benefits of that effort are distributed. It is more than money and finances, and it is more than capitalism or socialism.

One example (and there are many) that has received some public recognition is the 100 Mile Diet. The 100 mile diet aims at eating only from food sources and production within 100 miles of where you live. It is considered a sustainable diet that addresses critical issues. Namely, it is more "environmentally friendly" because it dramatically reduces the oil and greenhouse gas costs of transporting food for thousands of miles. However, it has other benefits. It increases security for farmers. It creates local jobs in food production and processing. It creates a safer, and more secure, food supply. We could also argue that it creates stronger social networks within those communities.

Infrastructure Issues
We have had numerous examples of infrastructural weakness (see the AASCE Report Card) in the United States. From the power grid failure in 2003, to collapsing bridges, to massive water main leaks, to crumbling sewage systems. Infrastructure has been more than ignored. In many areas it has been privatized (corporatized). Politicians don't think that infrastructure is a salable (sexy) campaign issue, and when it is in corporate hands, it is not profitable to either maintain, expand, or rebuild. Hence it falls apart. As a consequence, the U.S. infrastructure (pretty much in every area) is a big mess.

We need, and any stimulus package should, address infrastructure issues. Infrastructure is a foundation that is critical for the present and the future. However, the way we approach the infrastructure challenge will shape our nation for perhaps the next century or beyond. Do we approach it as strengthening what we have, or do we approach it with an eye to the future and what will be best long term? Almost everything aims towards acting fast - projects on the books. The argument is that this will get jobs going, and money to local communities, most quickly. Almost certainly, if we act fast we will support exiting structure and interests.

We know that the national power grid system is teetering on collapse. We know that we need to include renewable energy into the power grid. The national discussion has included building massive wind and solar farms and building power grid capacity to connect it all. It places energy companies at the hub and control of both existing and new energy infrastructure and delivery. (The oil tycoon initiated Pickens Plan for example). But we could invest in a different approach.

Instead of going big and centralized, we could go decentralized. We could have a nationwide program to upgrade existing construction for energy efficiency and production. This is happening on a small scale, where businesses and homeowners install wind and solar capacity on their own properties. It decreases their electric consumption and allows extra energy to flow back into the "grid" (where they may be paid for it). How many jobs would be created by investing in program of decentralized - versus massive construction of centralized - energy production? I believe it is likely that far more would result from decentralized. Further, for the people, there would be a benefit of decreased costs (and possible income) versus, paying to construct a new and expanded centralized system, then paying for the energy from that system.

Certainly, there is a place for centralization. I believe for example, that we really do need a national power grid. Moving to renewable energy sources creates a storage problem that is not there (in the same way) when you are dependent on metered generation - oil, coal, hydro. In other words, those sources where you can control how much electricity is generated in relationship to demand. However, decentralized production (and storage) could be handled at a city (or even regional) level.

The same could be said of technological infrastructure - which would create a different category of jobs and access. Why don't we fund communities to create and connect folks through free (or cheap) fiber-optic or broadband based connections? (I am not going to push national wifi here because I think that this may actually ultimately be found to have strong negative health and environmental issues - electronic pollution; loss of bees...). We could end the "digital divide" fairly easily. I am relatively confident that it will never end, and will continue to grow, if we leave it in the hands of corporate interests.

Suggestion 3
Include a decentralized, local economy, component to infrastructure projects.

Including funding of decentralized approaches to infrastructure would create more jobs, strengthen local economies, and return more economic benefit to the people than massive "follow the existing path" investment would.

Do we move forward, or create a bigger version of where we are?
I strongly suggest that we get a clear look at where we are, and choose a different path forward. We are looking at a huge "investment." That investment can essentially try to recover what has failed us, or it can be to place us on a new footing. It we are talking about trillions of dollars (and we have already thrown trillions at this collapse), then I think that creating a new foundation would be an excellent idea.

1 | 2 | 3

Take action -- click here to contact your local newspaper or congress people:
Rebuild local economies, not bail out big finance

Click here to see the most recent messages sent to congressional reps and local newspapers

www/uncommonthought.com/mtblog/

Rowan Wolf is an activist and sociologist living in Oregon. She is the founder and principle author of Uncommon Thought Journal, and a Senior Editor for more...)

The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.

Contact Author

Contact Editor

View Authors' Articles

Book Recommendations for "Derivatives Economic"

Lessons from the Financial Crisis: Causes, Consequences, and Our Economic Future (Robert W. Kolb Series)
by Robert W. Kolb

$95.00
Lowest New Price $59.85
Number of pages: 552
Publisher: Wiley

Risk Takers: Uses and Abuses of Financial Derivatives (2nd Edition)
by John Marthinsen

$60.00
Lowest New Price $40.00
Number of pages: 352
Publisher: Addison Wesley

Managing Risk in the Foreign Exchange, Money and Derivative Markets
by Heinz Riehl

$60.00
Lowest New Price $19.95
Number of pages: 300
Publisher: McGraw-Hill