Stimulate This

According to the experts, much of this country’s wealth – what’s left of it – is concentrated in the hands of relatively few. How do you pry those funds out of the death grip of those gotrocks who have them? They’re hanging on to it for fear they’ll lose it. Of course, if the economy collapses altogether, whatever they have will be worthless. The wealth has to be put into circulation somehow.

What’s needed is a broad-based incentive program for people to spend money. Apparently, lower prices aren’t good enough, nor are appeals to patriotism. There needs to be a bonus for parting with cash. How about tax credits for buying a car, or big home appliances? Is a flat-screen TV a qualifying home appliance? What would be the harm? How about credits for travel or eating out?

The private sector has been doing things like this for decades, maybe centuries, and it works. I just signed up for a program whereby a company gives me airline miles for using my credit card to eat at participating restaurants. Some of my favorites are on the list. I’m already hearing you: a) I shouldn’t be using a credit card, and b) I shouldn’t be eating out in these times. But with the airline miles I might be able to take a nice trip someday – or not. I’m at least thinking about the deal, though – why? Because I’m getting something extra. The bonus in these programs is often unrelated to the product they’re based on. The kicker with the restaurant rewards program is that there’s a time limit to qualify for extra airline miles – if I don’t spend within a certain period, I lose those miles. So there’s both a carrot and a stick.

What about all these executives that got their zillion dollar bonuses when their companies were failing? You can’t take their millions away from them. But is there a way to basically force them to spend it? That’s a penalty you’d think they could live with. Get them to put their money in circulation somehow. Whether we like it or not, much of our economy is based on consumption. Hold guns to their heads and make them consume.

Here’s something to think about. What happens if all of us conspicuous consumers get used to the idea of living with less? Then I guess we’ll be in real economic trouble.

There, now I’ve said it.

Halfway Meetings

No one can say that our new President hasn’t been breaking new political ground, schmoozing the Republicans in Congress. Cocktails and Super Bowl parties are just part of the process. It’s behavior we haven’t seen from the White House, at least in a very, very long time.

But the Republicans, while they appreciate the respect being shown, aren’t budging, at least publicly, when it comes to the economic stimulus. Mr. Obama’s plan didn’t get a single GOP vote in the House. So what’s missing?

Compromise has to go further than a cocktail party or a meaningful chat. To many, the word compromise means, we’ll get along just fine if you just do it my way. But it all comes down to: What is my side going to give up to get your support? The congressional Republicans genuinely appreciate President Obama for his outreach, and he has loads of popular support, but it doesn’t mean they’re going along with something they don’t believe will work. What are the Democrats willing to give up?

We all agree that sacrifice in these times is a good idea, as long as we don’t have to do the sacrificing. Wall Street may be largely responsible for tubing the entire world’s economy, bur when it’s suggested that compensation limits be imposed on firms taking bailout money, what we get back is, you don’t understand the Wall Street pay structure, that bonuses are like the tips waiters get in restaurants. In like manner, when Gov. Arnold Schwarzenegger wants to save a billion or two by calling on California state workers to swallow two unpaid furlough days a month, their unions head for court.

So while the boat is sinking, most of the passengers expect the other guy to pick up the bailing can – after all, wasn’t it the other guy who punched the hole in the boat in the first place? Everyone’s ankles are wet now – soon, it will be their knees.

The problem is, all those things we believe we’re absolutely entitled to are only there by mutual agreement and based on conditions that may not apply at this moment. Are we all prepared to give a little – give up a little – to get something back, like survival? You’d think when you consider the alternative, the choice would be clear.

There, now I’ve said it.