I was reading an article on Yahoo the other day and then some of the many posts that always follow. At last look there were over 5000 posts. Some had general thoughts, some wanted us to overthrow the system, most were from a few people posting the same old hatred or general lack of consideration of others.
It got me to thinking and I cannot remember my original thought, but the example I had to discuss my thoughts did stick in my head. I do remember thinking about how ineffective current policy is and still blaming the two political parties and their lack of foresight on most issues. Also I was thinking about how they really do not represent the country anymore. A common theme of mine, but I wanted to put together something that draws a picture of why they don't represent the people of the country anymore. My beef is that both political parties are extremely tied to pleasing wall street. And even most businesses are too tied to pleasing wall street, Current business thinking is they must meet wall street expectations or they failed. This really bothers me because companies cannot plan ahead nor can they consider long term strategic thinking, however, for now this is an aside to my original point for this post.
This is a real simplistic example, but I think it shows how the use of public policy can still benefit the country and show how you can change policy to affect better behavior. What people tend to forget is public policy can and should be changed to reflect the times or the current needs of the country or populace. Laws get enacted and then they stay and build bureacracies or continue policies that become outdated. So good public policy would be flexible and so at times it can direct policy, actions or change behavior, but if the circumstances change the laws can be changed accordingly. A really effective government does not have to be large rather it has to be responsive, flexible, and also be able to think ahead.
So here is my example, again very simplistic, but I hope I work out the picture for you. So taking the current economic situation, the loss of the middle class, the need to rebuild the economic infrastructure, build industries that can export so we can build wealth, the growing gap between the haves and the haves nots ( another aside wall street needs to realize that concentrating wealth does not benefit them in the long run. This will do more damage even to their interests than they seem to realize.) And a host of other issues affecting our economy should cause our government and our " representatives" ( remember our government is based on the idea of representative government especially from the legislative branch) to address the current needs which is the need to rebuild our middle class, however, they tend to ignore the middle class and of course a strong middle class is needed for a strong democracy. So if our government was truly representing the majority of the people we would be seeing much different public policy.
So the example is a taxation example. It is not an end all problem solving example, but a snapshot or one line item of what should be broader policy that truly benefits the majority of Americans ( read Middle Class).
So lets keep capitalism, democracy and make it work better. First item. And again this is policy that can change as the times change,, nothing should ever be in stone in a democracy. Also I know there are some holes in this example, but look more at the philosophical idea than the specifics.
First example,,,, person buys a 1000 shares of stock,,, average person doing the right thing and buying stockor a mutual fund with the intention of building up savings. Done the research and the company has some good prospects. Now whether it be 6 weeks, 6 months or 6 years, if the stock has gone up a couple of bucks a share, sells takes the profit, the taxes on this should be very very minimal. Right now we need our middle class to build savings. Pretty straight forward.
Now lets take large investment banking firms taking millions investing in the market,but investing in such large amounts that any change in the price of the investment they can take a quick profit and do. This is an investment banking firm that is just making millions on a daily basis and not really investing in the economy, just in the market. Some people think this is good capitalism and they should be able to do this, okay so they can, however, these banks are not investing in the future of our country and only a few people benefit from this and now we need these millions being played with invested in our future. So create policy that taxes the large short term trading incomes at very high rates. What good is this doing our country when no jobs are being created, no companies can expand, or invest in research and development. Instead reduce tax rates to the investment banks that actually invest the money in the economy as a whole. You are not picking on the investment banks by making them invest more beneficially to the whole. Sure they may lose some out size profits in the short term, but realistically wall street needs to go back to the basics of investing in main street, etc.
So if an investment bank or whatever invests in a new industry, or established companies creating new products then those profits over the long term would be taxed at much lower rates. This isn't original thinking, there are many articles espousing similar ideas. What is important for most Americans to realize is that if our Congress was truly representing the people, they would be enacting these types of public policies.
The difference is if wall street wants to sit on their money and play games with the market, ( and these games have enormous impact on long term savings and the long term gains of the market which has affect on wealth building by the upper midldle class and middle class)then public policy should be created that says okay you can do this, but it is going to cost you as much as it costs other interests in the country. IE if the middle class has no jobs because you are hoarding money then you pay for all the extra services the government has to provide to keep people afloat. So if you don't like large intrusive government, then you need to think about having Congress tax the excess and reward with taxation policies that create a new economy.
Is that happening right now, unfortunately not because Congress represents 1% of Anericans not the large majority.. so my other thought is pretty simple keep our constitution just throw out every democrat and republican in office till they realize it hurts to be unemployed like the rest of us.
Capitalism can be beneficial, but it cannot be the driver of public policy. Our government is suppose to be by the people for the people, that means our government is charged with protecting the interests of the country both externally and internally. So we don't need to march in the streets like Egypt or Libya, we just need to do what has already been given to us. Talk to our government, their jobs and our country's livelihood depend on it
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