Part 2 -> http://wp.me/p4bXEi-oy
I have to admit that maybe this idea of going back in time to study up on all the causes of the unemployment crises may not have been very bright. I missed my wife and family, and Einstein was not very good company sometimes. I mean how many puns can a cat make about relativity? So much for my tale of woe, I was here and on a mission and I was making some serious progress!
Looking at the data and even more importantly, reading books by writers that hired people to look at the data, I realized that the economic expansion flattened out right around the time Richard Nixon was in office. A time of unprecedented inflation, certainly caused by his reckless move to take the US off the gold standard! So let me look at my notes and…. OOOPS! Nixon untethered the dollar from the Gold Standard to slow down inflation. Damn! But certainly it caused the inflationary spiral that came during the fiasco of the Carter years! So, let’s look and…. Carter, by the time he left office got inflation under control and did not return us to the Gold Standard. And all during that wild and crazy inflationary era, the job market remained fairly stable and incomes managed to keep in line with inflation.
Then, we have what I now call the Reagan Devolution. Einstein! If you can have your stupid relativity puns, certainly I can have this one. Here, have some fresh kibble and shut up.
Sorry about that. I was just trying to say that during the Reagan administration, we see the start of income inequality where the wealthy got proportionately more of labor’s production. The key finding is starting in 1981 was when wealth almost alone drove the divide. The old saying that it takes money to make money, became to make money, have money. The former requires you spend money, the latter requires nothing more than having money.
So, what got broke? First up on the agenda was the tax structure. Then we had a breakdown in the power of unions, and last of all a business first agenda from the White House. The result, less regulation to keep business in check and less money to run the government, especially the regulatory agencies. What rules were enforced were/are the rules that businesses approve. These practices all started during the Reagan years, but were never removed by either Bush, or either Clinton administrations. (not a typo, look at the people Obama put in power; and who does he seek advice from? Clinton, not Carter).
So how do we get back the jobs? There are a number of areas that we have to fix, and will go into each component in better detail in Part 4. But Part 3 is not done yet!
First we need to reevaluate the FLSA laws. President Obama has started this with his tougher OT regulations. But that only scratches the surface.
Next, our tax code needs a major overhaul. I could also suggest a radical change to how our monetary system works, but we can get lots of jobs without it. but an overhaul of the tax code is necessary because we have a severe spending problem. We are not spending anywhere near enough.
And of course as part of the FLSA law and the tax law changes, the concept of minimum wage needs to be understood and be implemented.
In the end, just changing the FLSA laws will have the biggest boost, but if we can get the government more money to spend, better still.
Stay tuned for Part 4.