We acknowledged when we began our Bi-Sectoralists column that it would be naïve to suggest that politicians and investors should never think short-term. But it's even more unrealistic to accept pervasive short-termism as a given when it is so antithetical to being strategic.
We feel strongly that our problems are structural and therefore require more strategic thinking and bi-sectoral partnership and less tactics. Many of the issues confronting the US and the world are not quickly solved; if they were then we would not be in the tough economic spot we are in three years after the Wall Street crash. Unfortunately, the history of debt deleveragings suggests we are only half way through the time line.
One of us had the chance to engage in some 2012 scenario planning recently. What was striking was the high level of uncertainty, or to put it another way, the lack of conviction about the future. This has led many in the money management business to shorten the duration of their investments and to adopt a more trading driven strategy. That's one option; another is to build a global framework supple enough to deal with the ups and downs and recognize that it is not the day-to-day price movements that matter but rather how one performs over longer-term cycles.
This lack of conviction or clarity as to what the future might hold hobbles business and government alike. Business sits on record amounts of cash, some $2 trillion for the companies making up the S&P 500. Will that money be put to work in research and development? Building factories? Probably not. In Washington, the federal tax take is at a 50-60 year low as a percentage of GDP, yet raising taxes is a political non-starter.
How do we as a nation build the framework that will inform our long range planning and decision-making? How do we get beyond what Tom Friedman called "day-thinking politicians trying to regulate day-trading bankers, all covered by people tweeting on Twitter"? Could it be in the very areas where long-term solutions are most needed?
Well, we have a jobs crisis, an infrastructure crisis, a health care cost crisis, a pensions crisis, an education crisis and a climate crisis. That's a good half dozen areas of focus that by their nature demand long term approaches.
Most of these are national; some are global in scope such as climate issues and to a large extent, growth issues. They cut across industry, state and party lines. Yet there is another line that has yet to be crossed and that is the red line that inhibits bipartisan solutions and public - private cooperation. The prospects for successful strategies to be adopted without first crossing that red line seem dim.
Of course an election year makes crossing that red line all the more unlikely. But even within that political context we're struck by how our own American version of "people power," the Occupy movements yes but also broader rumblings from everyday folks, has shifted the dialogue from a one sided focus on fiscal rectitude to a dual focus on jobs and fiscal responsibility. Score one for the public debate and a shout out to the citizens who generated that shift in dialogue. It is up to us, especially in an election year, to make our voices heard, as people have been doing the world over.
Making our voices heard, though, is not enough; success requires channeling our voices into a coherent set of strategies. One strategy that resonates is to focus on prevention. While preventive war has not proven successful, prevention in social areas such as childcare can yield huge benefits. For example, the Citizens Committee for Children, a NYC child advocacy group, estimates that every dollar spent on youth prevention programs generates $140 in savings on later juvenile justice and law enforcement costs. A dollar spent on pre-school programs is estimated to yield $17 in increased earnings, lower crime and reduced welfare expenses. Sounds great but what programs are being cut as we seek to reduce government spending - you guessed it, these very same programs! That's not strategy, that's tactics and poor ones to boot.
Research on preventive health care suggests significant long-term savings are possible in an area that threatens our economic well-being like few others. Infrastructure spending, spending now to build our competiveness and put people to work, suffers under the current short-term myopia of debt cutting first and foremost.
At the same time, with issues like the Keystone pipeline, as important as short-term job creation is, we can't let it just trump longer-term environmental consequences. There are plenty of ways to create jobs and strengthen energy security without so many negatives on the balance sheet.
Policy makers and investors, business owners and consumers, we all have to balance between immediate needs and long-term objectives. Flash trading doesn't develop technologies of the future. Daily talking points don't add up to coherent policy. A bi-partisan, bi-sectoral approach that gets beyond short-termism is critical to reestablishing our internal well being as a society and our external position as a nation.
http://www.unixbuzz.com/2012/01/21/nit-patna-pleader-survey2012-results/
All these issues are interconnected as part of a system, and we should try to understand that system and confront it as a whole. Converesely, attacking a strategic part of that system like Keystone XL will have a positive effect on the overall struggle.
Sadly, even something as seemingly simple as the estimate that "... every dollar spent on youth prevention programs generates $140 in savings on later juvenile justice and law enforcement costs..." may not be greeted with universal joy. Each $140 pays into a massive industry of security, police, lawyers, prisons etc. that has no intention of going away. (One Barclays Capital analyst noted that the private prison industry, which currently house about 8 percent of all state and federal inmates, despite budget cuts should be able to raise their market share in 2012, giving some companies in that sector a buy recommendation.)
There are many many things we could do better. There are also many many people with a vested interest in making sure that better never ever happens. Until the "broader rumblings from everyday folks" becomes broader action, things may not improve.
You are working on broad strokes, great, but please take it from those of us who are informed on the specifics that handing tens of billions of taxpayer dollars to Chevron Solar and BP Wind to kill taxpayer land to monopolize OUR sunshine and wind is the worst possible outcome. Our built environment bakes and sprawls with hugely inefficient designs and construction, and empty sunny rooftops throughout. A German style feed in tariff would pay US, real people for investing in clean, NON-deadly local solar power and efficiency upgrades, while marginalizing Big Energy and saving the ecosystem services and biodiversity of our open spaces.
Please, do not greenwash Big Energy destruction of our economy and environment, even if they call it "solar" or "wind." WE are the investors who want OUR returns, so let's put policies in place to support energy democracy. It's long overdue.
"A house is only as good, as the foundation it is built on"
Anyone who's been around construction for any length of time, can attest to that accuracy of that statement.
IMPO........Our politicians, are chosen, and elected by a system financed by legalized bribery.
Only those willing to "play the game" of garnering corporate contributions in the millions, make it on the ballot in either party.
Corporations do not "donate" that money, out of a sense of altruism, or civic pride. The return on investment of campaign donations makes them quite probably the best investment in America today.
If they weren't, the money would stop.
It ain't, Corporate money will be flooding the 2012 election season like never before.
When bribery determines who runs, and who gets elected, the result HAS to be a corrupt government.
Big Business OWNS this country, it's banks, it's politicians, now it appears even it's courts.
Until that changes, all other "reforms" will be in name only,
We have the best (more to the point, the WORST) government corporate money can buy.............
And it shows.
A million here--a million there - then it doesn't matter who wins -- they are bought.
There are almost no better returns than those found in tax benefits, government subsidies, loan guarantees, bailouts, regulatory exemptions, federal contracts, and trade deals generating hundreds of millions if not billions of taxpayer dollars a year.
The Koch's are just making a good investment.
Successful crime goes by the name of virtue.
Seneca the Younger (c. 4 BC-AD 65)
F&f
"You know, one of the hardest parts of my job is to connect Iraq to the war on terror." --interview with CBS News' Katie Couric, Sept. 6, 2006
"The same folks that are bombing innocent people in Iraq were the ones who attacked us in America on September the 11th." --Washington, D.C., July 12, 2007
"See, in my line of work you got to keep repeating things over and over and over again for the truth to sink in, to kind of catapult the propaganda." – GWB Greece, N.Y., May 24, 2005
"When I was coming up, it was a dangerous world, and you knew exactly who they were. It was us versus them, and it was clear who them was. Today we are not so sure who the they are, but we know they're there." --George W. Bush, Iowa Western Community College, Jan 21, 2000
"I'm telling you there's an enemy that would like to attack America, Americans, again. There just is. That's the reality of the world. And I wish him all the very best." --George W. Bush, Washington, D.C., Jan. 12, 2009
"You can't negotiate with terrorists. They don't speak English" George W. Bush Sept 14, 2003
The two Tweedledum and Tweedledee show will now be arriving at different locations all over America and while dum and dee are busily bashing and trashing each other with their superpacs one can only hope the American people will be made aware of how these two candidates running for the presidency managed to game two rotten systems (the U.S. Government and financial markets) to make their millions and why they perfectly represent all the other Robber Barons who because of their greed managed to turn a great Republic into a combination Plutocracy and Oligarchy.