Imagine New Jobs

This post is a response to The Bernanke Put on Financial Times, Maverecon Blog, by Willem Buiter – posted Jan. 24, 2008

I agree that the Fed is walking right into the markets hands. The Fed rate cut does not have a prayer. Greenspan took all the inflation fighting juice out of the economy in the 90’s while igniting the momentum of debt. In any case, we are all in trouble.

We are in trouble because our farms are no longer so close by; we are in trouble because we use too much expensive energy to import things that we used to produce close by; we are in trouble because our government and armed forces are huge and are a ton of mouths to feed. We are in trouble because our federal government currently “guarantees” the obligations of Fannie Mae, Freddie Mac, and Sallie Mae. We are in trouble because Wall Street liquidated the entire value of the economy x 10 (assuming 10:1 leverage) through these credit “derivatives”. But what to do?

We certainly can’t blaim Bernanke or Paulson, although faking that they know what they are doing is not helping. The economic system is broke, and we better fix it.

Obviously we need to make sure our trains are in good working order since oil and the automotive industry will surely not be the wave of the future. Energy efficient urban downtowns and villages will continue to grow and a continued investment in them will certainly make sense. We must also invest heavily to increase the diversity of our farms for obvious reasons. The healthcare system is a derivative of a healthy or unhealthy economy. Only time will tell whether we can bring nutrition to our health care system. The list certainly goes on and on.

But most importantly, we will soon have an immediate need to generate a lot of new jobs as so many tied to the housing industry are lost. Unemployment feeds on itself, so we can not afford to give it any momentum. So what should be our next growth engine that supplies these jobs and how can we make this one last? It is widely believed that energy will determine our future. So why not make it renewable.

Imagine if the Keynesian theory of economics was sustainable, where “priming the pump” actually generated net equity every step of the way. Renewable energy produces jobs while progressively lowering the cost of labor time (as a derivative of scarce land value). Imagine home mortage companies turned into renewable energy mortgage companies. Imagine our automotive industry turned into solar panel manufacturers and retailers. Imagine the home construction industry evolved into the renewable energy construction industry. And who better to lead the Renewable Energy Revolution in innovation than “Silicon” Valley (Silicon makes Solar Panels and is the 2nd most abundant element on earth). Imagine a fiscal stimulus that actually had a long-term goal.

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