Under President Obama's guidance, the economy is definitely improving. The stock market is breaking records; the Dow has more than doubled since we hit bottom on the Bush recession, and the S&P is also breaking records. The housing market has largely recovered, and we're back on track, albeit this time as a saner pace.
We could be doing a lot better, if not for Republican obstruction. There are still too many people out of work, even as the Republican House continues to sit on a massive jobs bill that is coming up on its second anniversary.
But while the problems we have right now are largely the fault of the current Republican Party, a lot of it comes from our warped sense of the concept of "investment," in which we demand that our investments bring huge, quick financial returns, without concern for a solid, sustainable future. It shouldn't even be controversial to make the switch from fossil fuels to solar, wind and other renewable energy sources; it's common sense. It may not make us a boatload of money now, but over the course of our lives, the payoff for such a conversion will be enormous. And that's the problem. We only look at financial profit as "success," and we seem unable to look beyond the next quarter or the next year.
Whether or not you call them the "Greatest Generation," the people and government in the post-World War II era built a massive economic powerhouse through investment in the country and the people, and did so with a lot more patience than we seem able to muster these days. The stock market didn't double in a few years, it simply built up value steadily over time. Some folks became rich, but nearly everyone made more than enough to live on. There was less of an emphasis on quick massive profits. The concept of a 30% interest car loan, or a 500% interest-rate payday was absurd. Businesses were happy to make a reasonable profit; there was less of a push to charge $30 for something that cost $1 to manufacture than there seems to be these days.
We have to return to a sane concept of investment. It won't be easy. After 32 years of right wing Republican politics, the propaganda of "deregulation" has become pretty much ingrained. In a nation where people think of gold at $1600 an ounce as an "investment" because they're enticed to dream of its rise to $5000 an ounce, financial sanity is a serious long game. What is currently referred to as "investment" has taken on the veneer of a game of roulette. There's nothing inherently wrong with speculation, but speculation never used to be seen the same as "investment," but more as a bet.
The Bush Recession should have awakened us, but it doesn't seem that way. The money we "lost" in our 401(k)s never actually existed except on paper; it was vapor. The reason so many businesses went under then is because they purchased "securities" that were based on nothing but promises; with no actual value. The reason we ended up in such a deep recession in the first place was because too many purchased homes we couldn't afford with money they didn't have, and watched home prices skyrocket beyond all reason and thought it was an overall positive. It never occurred to most folks that something might be wrong. As long as the trajectory was up, there was no concept of what might happen if the market collapsed.
Meanwhile, because of "deregulation," "mortgage brokers" skimmed their profits off the top, with no accountability, banks simply dumped mortgages onto a completely unregulated secondary market. Gee, what could go wrong there? Yet, even most "experts" saw nothing wrong with this, just as they saw nothing wrong with tech companies with nothing but a website selling pet supplies being valued at $100 per share back in the late 1990s.
Our nation cannot continue down the road we've been on in since the dawn of the neocon era. Without major changes in thinking, we will continue to make the same mistakes, and get ourselves into the same messes over and over again. Putting $5000 on a stock, with the goal of doubling your money isn't an investment, anymore than placing it on black is an investment.
A true "investment" can be risky, but it's not a bet. Real investment not only creates a monetary return, it also creates something that makes life and society better. Not all good investments make a profit, but all good investments move society forward, even when a company fails. Say what you will about Solyndra, but the fact is, even in its failure, that company still moved an industry forward; an industry that will be increasingly crucial as time goes on.
Buying stock in a retail company that buys its goods from Chinese sweatshops to resell cheap, and which pays its domestic employees so little, they have to go on welfare, is not an investment. Giving oil companies tax breaks at a time when they're making record profits is not an investment, it's a waste. Investing in companies that sell American goods and pay good wages is a good investment that will pay off for all of us. Buying shares of a solar power company, or a company making inroads into electric cars is an investment, because it moves society forward.
The reason our current right wing-inspired concept of economy is such a failure is because they can only see success as "making an immediate financial profit." They are incapable of understanding that some investments make life better, even if they don't make a profit right away. We've needed a comprehensive national rail system for years, but because private companies can't figure out how to make a profit from it, we haven't invested. As a result, we've fallen way behind nearly every other industrialized nation in the world, and we've been crippled by an over-dependence on fossil fuels.
One of worst aspects of the discussion of universal health care is the right wing's constant harping on "return on investment," which they refuse to define as anything but "profit." But before Obamacare, we were spending $2.7 trillion in health care every year, with the average insured family paying $18,000 a year, with a lot of that amount underwriting those who weren't allowed to pay into the system. Does that sound like a solid "investment" to you? Republican concern for "Return on Investment" was limited to company executives and stockholders, without regard to families. Why shouldn't folks paying $18,000 a year in premiums demand good health care in return for their investment? Just as importantly, isn't a healthy, productive workforce a good investment in a society? What is it about today's business environment that the only "investment" many seem to see is savings on wage and benefit costs? And how is it fair that companies that prefer to treat their employees well are placed at a competitive disadvantage against companies who see their employees as a commodity or even a burden?
We have to invest more in ourselves, too. We have to stop focusing on the "cheapest" items. We used to be the premier manufacturing power in the world, and the only reason that changed was because of our twin obsessions. First, we are obsessed with the lowest price on everything, even though it's rarely the best value. Which is a better deal? A $1 item you have to replace every year, or a $10 item that lasts 20 years? Our lives are spent at the dollar stores, or the big box stores full of Chinese crap, much of it made by virtual slaves, and the end result is our landfills becoming stuffed, and our factories sitting empty.
The other obsession is with constantly increasing, unsustainable profits. When you buy a dress shirt from a discount store for $20, it's likely it was made for less than $3. Is it really impossible to manufacture them domestically? So what if they cost $6-$10 to make? If it's better quality, it makes more families live better, even if it costs a few dollars more, isn't that an investment we can all agree is a good one? Then why can't more companies make it on such a profit margin? And even if it's difficult to make a profit at $25, what about the high end stores? Can't we at least make the jeans that sell for $150 at the high end mall store?
This country is in serious need of jobs that mean something, and that means investing in ourselves. Big box stores are sapping the energy from our economic engine. Those low prices don't save you, they cost you. We need to stop wasting our money in huge stores and online shops that sell foreign-made trash cheaply, and start supporting smaller, local businesses. Instead of giving oil companies money they don't need, invest that money in small business loans and encourage them to hire people at a living wage. The tax code was once written to encourage real investment in activities that created jobs and wealth. Now, we give businesses tax breaks for moving manufacturing overseas, or hiding their money offshore. That has to stop.
To return our economic engine to where it should be will mean a lot of regulation, to make things fairer for everyone, not just the players with the most cash. It will mean paying everyone a living wage. It will mean creating a social safety net that reflects the reality of the capitalist system. It will require a return to the regulated capitalism outlined in our Constitution, not the virtual economic socialism Republicans seem to prefer. And yes, it's the GOP that seems to love socialism. They're the ones pushing to redistribute wealth. They just do so in an upward direction.
We have to change our view of investment, and we have to invest in ourselves, as a nation. True investment shouldn't be about each of us making more money. It should always be about making the lives of everyone better.