Have you heard that word “incentivizing”? I grew up saying encouraging. Either way everyone wants to incentivize. Or send messages. So someone else will do something – maybe.
The Fed wants to incentivize or encourage everyone to spend money. I understand that for the Fed. That’s all the power they have. They can’t build anything. All they can do is manipulate the terms of trade with more or less money. Their job is to incentivize. We used to talk about how limited that was, and how the Fed could not deal with major economic problems because it doesn’t have the tools. Seems like the rest of the tools have been locked in the shed and only the Fed is in running order. But all it can do is incentivize other people who just might do what they want.
Then there are the tax cut vultures. If we cut taxes, especially to people who have more money than they know what to do with, the theory is we will incentivize them to invest, and if it works, just maybe they’ll invest in America, if they don’t invest in China or somewhere else.
Whatever happened to good old American get up and go? Why are we all giving other people incentives to do things for us. Why don’t we do things ourselves. Want investment? I’ll show you some investments. Let’s fix roads and bridges. Let’s finish the updated water system. Let build a modern electrical grid. With solar power. Let’s clean up the rivers and lakes. There’s lots we can do to make a better America – and update an outdated one.
But we’re in a recession. Exactly. And we’re spending money anyway to get other people to invest. We can spend the same money and get real value for it. We need investment. We need someone to spend the money. And we’re spending it anyway – wastefully. We can do it ourselves.
Ok you want business investment. Why do you think business would invest? Because there are people who want to buy their products. But that’s not true – until and unless we put money in the hands of people who might want to buy, and who have to buy locally.
And why should a business invest in one place or another. Everybody says “taxes” as if that’s all a business manager cares about. But that’s nonsense. They care about transportation. They care about the availability of all the services businesses depend on – like power, reliable electricity, clean water, and plenty of all of them. They depend on a capable workforce and good places for people to live. They care about the quality of life. They care about the availability of expertise. Taxes? Just one piece of the equation. In fact a good case can be made that business does very well in many high tax states – because they get all the other things they need and the very capable people who choose to live there.
We can build those things. We don’t need to encourage anyone. We can do those things ourselves. Pull ourselves out of this recession and make the place more business friendly at the same time. Let’s get going.
— This commentary was broadcast on WAMC Northeast Report, November 16, 2010.