God Save Us from the Fish Mongers – An Allegory

A small, tropical isle fishing village sits across an inlet from a much larger fishing village to the east. Both villages want for little, spending their days either fishing or taking leisure. The western villagers choose to fish in deep-water, prime fishing grounds where catches are ample and large. They have much leisure, for long ago a western family learned to use the woodlands of their island to produce boats. The eastern villagers, lacking boat building skills, are forced however to cast long hours along their shores for smaller inlet fish. The boat building family enjoys even more leisure than most because their skills provide access to the deep waters so their villagers give them a bit of fish from every catch.

Desiring vessels for their people, eastern village elders approach the boat builders with head gear in hand, explaining that they will provide twice the fish of the western villagers if the boat builders will also supply them with boats. With such an agreeable offer, the boat building family begins to supply boats to the eastern village, and soon eastern villagers can be seen venturing out into the deep for fish.

Flush with fish from the easterners, the boat builders craft an idea. They will trade their excess to westerners in exchange for a return of fish later. To entice their villagers, they will agree to give more fish today than will have to be returned later. Westerners find the offer irresistible because they can enjoy leisure now knowing that some day when they must repay the debt, they will work fewer hours than the hours of leisure they gain today.

Having an abundance of both leisure and fish but now lusting for more, the boat builders unwittingly cast aside their future and that of their island as they craft another idea. They will teach eastern islanders the secrets their forefathers gave them about boat building in exchange for a bit of fish from every catch of the boats the easterners build. Yearning to harvest more of the deep waters, easterners agree to the terms. As the ambitious easterners flood the fishing fields with boats, the western boat building family’s fortunes become titanic.

Mongers now flood the shores with fish from the east, eventually causing a fourth of the western villagers to sit idly by, borrowing from the boat builder’s excesses. Without a need to fish, they slowly lose their knowledge of the seas, and without a need to venture into the deep their boats fall into disrepair. The western village elders, who had survived by taking a bit of fish from every villager as payment for administering the village, now find that with many of their villagers idly living on the fish of the easterners, that they cannot skim enough catch from their villagers to live.

They approach the uberwealthy boat building family for solutions. Lobbying that loans of fish to the idle westerners is good for the westerners because they are receiving more fish today than they will have to repay, the family also quietly agrees to supply ample fish to the elders in exchange for support of continuing eastern trades. Having provided the elders fish that can no longer be obtained from the villagers, the family feels justified in crafting yet another idea. They will give fish to eastern villagers so that they can stop fishing and build even more boats in the east that will return a bit of fish from every catch.

The eastern villagers now control the deep fishing fields and begin to weary of trading fish to the westerners, who must rely on eastern fish, as their boats are no longer sailable. With even more villagers sitting out the long hot days in their huts, western elders grow ever hungrier, so with head gear in hand they travel in weather worn boats to the eastern shore and meet with the eastern village elders by the campfire. Emboldened by their newfound wealth, the eastern elders chide the western elders for their lack of foresight but agree to provide fish in exchange for the promise that the western elders will demand a skim of their villagers’ fish to repay the easterners.

For awhile, this uneasy arrangement continues between the western villagers, their elders, the eastern villagers and the family of boat builders until the eastern village bulges with boats. No longer needing the skills of the boat builders, the eastern village does not desire to give another fish to the westerners but instead demands the western village return the fish they borrowed.

Without the skills or boats to repay their debt, the western villagers look aghast as their elders call them to the camp fire. They no longer can sit by the shore gorging on borrowed fish, nor can they linger leisurely. They must now work long hours catching inlet fish to repay the eastern village. Their previous agreement to pay for earlier leisure with less work hours today was unfortunately sold off by the boat builders. For now, the westerners have no boats to venture into the deep and their labor will be spent casting from the shores. This tranquil village in paradise has unwittingly indentured its future to the easterners.

The family of boat builders, attempting to revive its lost fortunes, now sheepheadishly offers to build boats for the western villagers, but their offer is rebuffed. The easterners are now the preeminent boat builders and one by one, the villagers must meekly travel to the east with head gear in hand, hoping to acquire boats today in exchange for a bit of fish from every catch.

So….Why were the villagers allowed to borrow fish that they could never pay back? Why were the boat builders allowed to give the secrets of the island to the easterners, not only giving away their claims to the island’s boats of survival but the rights to the deep fishing fields that were not theirs to give? Why were elders allowed to borrow from the easterners while so many villagers sat idly? Why did the villagers not see that their elders would yield to the boat builders as a means of their own survival? Why didn’t the western village foresee that letting their skills and boats diminish was unsustainable for their island’s survival? Why didn’t they understand that by borrowing leisure, they would end up fishing for scrub fish along the inlet shore? Why?

Baby Boomers Force Dramatic Shift in American Social Contract

I was born in the census year of 1960 at the tail end of the baby boomers. A half century later, I frankly submit that our nation was naïve about the consequences of this historic generation’s path through American history. In 1960, as our boomers entered the workforce, they became the focus of capitalists worldwide, and their economic and social decisions shaped what appears in 2011 to be our nation’s retreat from world leadership.

In 1960, America’s bustling population was 179 million. Economic times were good. Even though the number of workers per retiree to support the New Deal social contracts of Medicare and Social Security had dwindled from 42 in 1935 to only 16 in 1960, the purchasing power of the average family had more than doubled in that time. While government spending had increased from 20 percent to 28 percent to support our strategy of world military dominance, solid economic growth still seemed inevitable for generations to come.

America’s social awareness was growing as well. Led by the likes of Kennedy, King, and Johnson, America began to advance government to rectify historical social ills, and to cause capitalists to pay for their social impacts of growth. A decade later, influenced by the seeming senselessness of Viet Nam, in an attempt to ferment President Johnson’s Great Society, boomers began an expansion of government that would grow from 30 percent of GDP in 1970 to over 43 percent today. In that effort, Americans diverted capital into government social programs, slowing economic growth to a level that could not sustain boomers’ retirement years.

In 2011 looking back, it seems that our representative democracy left us unprepared to support the boomers’ last stage of life. Even though the 2010 census swelled to 309 million Americans, our worker to retiree ratio dimmed to 3.2 and is falling still. And while rising wages from 1940 to 1960 lessened the impact of changing demographics, wages during the last forty years stagnated, leaving middle class boomers inadequately funded for retirement, and leaving young people with inadequate income to support them. While these changing demographics knowingly loomed for years, America failed to plan. As a result, a socially divisive wedge has been driven between the boomers and our youth.

This view of our boomer dilemma leaves me with unanswered yet glaring questions such as:  Why did our government levy social impact costs caused by our capitalists but not fulfill their fiduciary responsibility to levy financial impact costs on capitalists’ MNC investments?  Why did our government create only limited regulated retirement investment opportunities to funnel our boomers’ frenzied savings into stock investment bubbles?  Why did we then deregulate debt financing to further funnel now desperate boomers’ savings into mortgage derivatives?  Why did we allow capitalists to siphon these boomer funds into overseas investments without creating sustainable good paying employment in America for the young people who would be called upon to support our boomer retirees?

 Why were American capitalists allowed to lobby for free trade, and transfer boomer wealth overseas without paying forward the retirement impacts of those investments?  Why were our primary educational systems, designed to feed an earlier industrial economy, allowed to fail a third of our future taxpayers as our capitalists instead focused on funding adequate primary educational systems in emerging countries.  Why were our secondary educational systems allowed to inflate the real cost of college education by 150 percent during the last 30 years, beyond the reach of many Americans, when our government’s stated strategy to combat emerging economies was to use innovation of college graduates to create new high paying jobs?  What is the responsibility of our wealthiest Americans to the rest of our society in creating a feasible path through what will most likely be less than golden years for our boomers?

 Answers to these questions need to be transparently debated as we now prepare for the legacy of our extraordinary generation.  The paradigm of entitlement that gave boomers false hopes and that now embolden our youth to vote for change will soon end.  We now are at pivotal moment in American history in which our diminishing demographics will change America’s societal paradigm forever.  In its place will be the painful national discussion that must take place to pave a way forward.

Are Americans Entitled to Extended Unemployment?

Tea Partiers are ignited about the idea of abolishing long ago formed agencies that have been cemented in stone buildings along Constitution Avenue. They believe that good government concepts never really die and eventually become entitlements that stymie original intent.  However, once formed, these ideas take hold in the American consciousness and we begin to believe we are entitled to them as unalienable rights.

Take unemployment insurance for example. Like defense, education, and the rule of law, unemployment compensation has its roots in increasing the efficiency of capitalism.  With a temporary stipend, unemployed workers are free to move from businesses that are sliding past their plateau of usefulness to those that are innovating.  Without the fear of losing their homes and other assets, employees move to healthy businesses even during economic downturns.  Because this idea supported the beliefs of both parties of congress, unemployment insurance passed by an overwhelming majority in 1935 as part of the Social Security Act.

In most downturns, the unemployed are able to find jobs within the insured period of 26 weeks. However, an underlying sickness gutted our sustainable job base during the last thirty years as we borrowed our way through successive economic bubbles.  Only after the credit default swap bubble collapsed our economy did we understand that our jobs were gone.  Not only had our manufacturing blue collar jobs been shipped overseas, but our technically skilled jobs were exported as well. Our average period of unemployment has now swelled to 37 weeks.

It was only natural that Congress quickly adjusted the unemployment period as a stop gap measure when faced with the Great Recession.  They rightly protected our longer term unemployed to keep them from losing all they have gained in contributing to our country.  Now that the ranks of the 99ers, those that have fallen past the safety net of extended unemployment, are swelling, America is debating if unemployment benefits should extend further, and whether the unemployed are entitled to a longer benefit period.  

The debate on entitlements needs a paradigm shift.  Instead of discussing whether unemployed should receive more than two years unemployment compensation, we should be creating a process that allows our citizens to quickly re-enter the workforce and once again contribute to America’s success.  

My voucher plan is a paradigm shift.  Instead of paying unemployed to sit on the sidelines of our economy, America instead invests in our future by getting our people back to work.  Small businesses can hire voucher employees at their unemployment rate. In return, Voucher employees can work twenty five hours per week and receive the same pay they would have received through unemployment. The Federal Government can then reimburse employers the employees’ wages without increasing the unemployment budget.

Tea Party members will be concerned that this voucher plan will become yet another entitlement. They can rest assured that the voucher plan will be a relic of the Great Recession, created to automatically expire as the economy improves. Voucher dollars will decrease as the percent of unemployment decreases, requiring employers to cover more of voucher employees’ wages.  As a result, voucher employees in barely sustainable businesses will transfer to healthier ones.

Some claim that the unemployed feel entitled to remain unemployed, collecting extended payments.  While we can all find a few examples of misuse of American altruism, I have found that most people want meaningful employment.  The entitlement argument stems from the disincentive our unemployment system creates for rejoining the workforce.  It’s not unreasonable to compare available jobs with current unemployment payments. When a worker leaves a job that paid $14 per hour, is getting $8 per hour for unemployment, and is faced with a job that pays $9 per hour, their incentive to work is only $1 per hour; substantially less than their former job and only a dollar more than unemployment. Unemployment should not create a re-employment inertia differential.  My job voucher plan creates the largest re-employment incentive because unemployment extension payments end.

Americans might be concerned that my voucher plan would be used to balloon what they believe is already too large a government providing too many entitlements.  They cite previous government programs that raised social benefit costs without creating profit generating, taxable products or services. My job voucher plan, however, grows jobs only in private sector small businesses, and can be supported by existing government agencies without expanding their budgets. 

Others claim that my voucher plan is just an entitlement to small business, creating an inefficient makeshift set of jobs for the unemployed.  While I agree that my plan can rapidly employ all Americans, and as such may create some early, inefficient placement of workers, it nonetheless will also create a micro-venture capitalist function for millions of small businesses.  Some of these ventures will successfully create taxable revenue, and some will be incredibly successful, paying back America’s investment through future taxes on corporate profits and employee compensation.

Finally, concerns have been raised that any program such as this may create an entitlement mindset that all Americans must work.  Government work programs have been abused by some to collect compensation while performing work at subpar levels.  This problem is self correcting in my voucher plan.  Employees would still be governed by private sector principles.  If the job is not a good fit, employees will not find safe harbor in this program. For the program to be successful, government intervention will have to be restricted to current EEO and ADA requirements.  But, in the end, one entitlement should fly true.  America will find it is entitled to renew its future.

Can the Job Voucher Plan Create Renewal in America?

A sense of purpose is as important to one’s work fulfillment as the financial reward that work provides our family.  I am reminded of the story where a passerby asks a stone mason who is chipping away at a cornerstone what he is doing, and the mason replies not that I am cutting a block, but that I am creating a cathedral.  Here in Florida, I am surrounded by neighbors who have lived in their homes for 30 years only to turn them over to the bank because of hard times.  Their share of the “cathedrals” they created for our country was stored in their home. When the banks foreclosed on them, they lost the results of their life’s work. 

Losing their home is just one step down the painful road that millions of Americans are enduring during this Great Recession.  With the loss of so many millions of jobs, the difficulties of just one jobseeker can get lost in all the noise.  How do jobseekers cope when they have become part of the 99ers, those whose extended unemployment has run out?

During this Great Recession, as each month passes, the job seeker begins to realize that somehow this recession is different. In the first days after he recovers from the shock of losing his job, he determines to quickly pursue businesses which best meet his career and geography requirements. As the months go by, he realizes that opportunities are diminishing, and he must now lower expectations if he is to cover expenses and keep the kids in the same schools.  As unemployment compensation comes closer to the end, he recognizes he may have to move to open up more job possibilities. He reluctantly lists his home only to find over time that it is competing in a surplus market, and that its value is lower than the mortgage.

Yet he persists, getting up each day to comb opportunities till dusk with a hopeful heart of scheduling a job interview. His efforts pay meagerly because interviews are not plentiful in this stagnated market. Each month, more people transition to the unemployed, and they are being called in before him. He has similar qualifications, but somehow because he has been out longer, employers begin questioning why he has not been hired. Sensing their skepticism on the phone, he shows a lack of self confidence in the few interviews he gets, further lessening his chances for hire. His wife and kids quietly grow anxious with him, and he fears they are wondering what his “failure” will mean to their lives, their friendships, and their futures.

At some point, any job would be better than grieving through this spiraling loss of self worth. Then one surprisingly sunny spring 2011 morning, he turns on the TV to see President Obama, surrounded by leaders of both parties on the White House lawn, announcing the “Job Voucher Plan”. As promised, within weeks, the internet and local papers begin filling with job offers in all areas of employment. His spring is renewed with hope.

After several interviews, he begins working again, and not in some makeshift job, but one with career potential and purpose. The owner of a small business has painted a picture of an innovation in need of an American with the skills to make his dream a reality. Now purpose driven, he sets about to create real value for his employer and his community.

He knows that small business ventures are not always successful and that there are no guarantees this job will turn into something permanent. But the American people have committed for the next two years to give him 25 hours a week to help his employer and product to success.  Each morning seems brighter as he gains control through his efforts to build a career in this new small business venture. Not only is his family experiencing this change; he sees a purpose growing in the entire community. There is a belief that we are all working for something larger, for a renewal in America.

While this spot is not where he had hoped he would be in the years leading up to the Great Recession, he now has a sense that things will get better. He is being paid the same wages as before the recession but with fewer hours. He will help this company with hope and loyalty of purpose, and will have done his part to dig America out of its slump. As the economy improves and competition for employees heats up, his small business owner will compete to keep his new, valuable employee. Nonetheless, the job seeker will diligently use his 15 extra hours a week to once again pursue the American dream.

The above chart shows unemployed broken down by time of unemployment.  It does show a slowdown in newly unemployed.  However, it does not accurately depict all unemployed because many have fallen off the curve and are no longer counted.  Unfortunately, it does show that the mean time of staying unemployed is growing.

Ensuring a Sustainable World Will Create Significant Job Opportunities.

As wealth continues its transfer from industrial to emerging nations, if war does not return the world to a dark feudalism well before political, economic or physical limits are reached, at some point the entire world could reach a balanced standard of living.  What GDP would the western world would have to accept to achieve a balanced world economy?  Calculations, using today’s technology and known resources, suggest that a balanced living standard would be about one quarter the output of western nations today. For the sake of citizens of wealthy nations, who like I feel entitled or at least hopeful that we will maintain our material well being, I am rooting for innovation and exploration to vastly improve that balanced trajectory.

Futurists state that resources such as energy, water, and food may be among the factors that will limit the entire world from achieving the wealth frontier boundaries that have been set by western society. America can and should innovate to keep these barriers from limiting a higher world parity.  In creating solutions, we can build national core skills and provide jobs for Americans in the process.

While an economical solution to drawing and storing mass energy from the sun does not exist, and while the world still fears nuclear, innovation should unlock today’s yet unknown energy solutions to keep energy from being a limiting factor. Wind and solar electricity cost twice that of coal and natural gas, and electric grids are limited in areas of the United States that could produce most efficiently. However, as the oil era wanes, our future energy shortfalls are eminently more solvable than a shortage of sperm whale spermaceti seemed to America as the era of blubber energy was forever expiring.

Current technologies exist today to extend water capacity, to conserve water usage, and to create potable water for much of the world.  As an example, today’s power plants release 70 percent of consumed fuel as inefficient heat back into the environment.  Cogeneration plants can capture much of this wasted energy to convert the world’s seas into potable water. In a world filled with sun and water, the future brightness of tomorrow’s innovators should solve energy and water shortages.

 Even as America is touted as the bread basket of the world, the future will look back on our modern technologies as unsustainable just as we look back on the industrial pollution of the 1960’s as an unsustainable abuse. The world will question why we didn’t see how our food production processes were depleting soil, relying on too few strains of genetically produced seeds, and altering humans’ ability to resist disease from our livestock antibiotics.  However, globalization will create the need to transfer the best parts of America’s food production capabilities to other countries and to cause the world to restrict rich soil areas to food production, easing at least short and mid-term food pressures.

I am most concerned about the byproducts of innovation as a limiting factor. For instance, what are the effects on codependent species such as bees and birds of immersing an entire world in communication waves? What will be the effect of weakening the collective immunity of the world through pervasive use of antibiotics and antivirals? And while no-one has definitively linked the explosive acceleration of both number and scale of natural disasters to global warming, what will be the tipping point that creates an unstable environment for mankind?

These issues require a forward focus.  America can capitalize on solving tomorrows economic, environmental, and world sustenance issues before they become crises.  America can create national core skills the unite the world before our common sustenance needs divide the world into civilizations competing globally for antiquated solutions, or worse that plunge the world into a war of survival.