We’re coming up on the close of the year, so we thought we ought to take stock of some of the ideas we’ve put forward that we think are central to our commentary on the world of finance. Since starting Wallet Blog, we’ve found that our mission to provide information on the nation’s economy, consumer advocacy and commentary on the financial news of the day has become deeply linked to the recession. Because of this, we’ve written many articles on what we think our country’s leaders should do in order to fix the economy, as well as what we think about what they’re actually doing. During that process, we’ve noticed that a number of major factors keep coming up to describe the problems with the state of our economy and our recovery. We wanted, then, to take a moment to summarize the ten things we see as endemic to the economic problems we are facing and the steps we see as necessary to achieving their solutions.
10. Level the Playing Field for American Workers: We shouldn’t be penalizing U.S. companies for hiring from inside the country rather than outsourcing. The payroll taxes that our government requires employers to pay for their American workers encourages companies to hire from outside of the United States.
9. Atract trained Workers to the United States: The bottom line is that we need highly skilled workers like engineers and scientists. If we do not allow them to come to the U.S. for work, then we are encouraging companies to outsource those jobs and to support foreign economies. If we are afraid that highly skilled foreign workers will have a competitive edge over American workers, then we could have higher payroll taxes for employees that require work visas.
8. Too Big To Fail: We have allowed lumbering financial giants to continue practicing unhealthy business practices, confidant in the idea that our government will bail them out because of the systemic risk their failure represents to the U.S. economy. These companies that are too big to fail should simply not be allowed to exist. The risk that companies of this size represent to the national economy far outweighs any benefit they might offer. In the event that a company grows to this size and fails, they should be dealt with through pre-packaged bankruptcy rather than bailouts so as to address the systemic risk that they represent.
7. Regulation: Our country has a preponderance of regulatory bodies. There are just too many regulatory bodies overseeing the U.S. financial system. The problem with this system of regulation is that it’s simply too easy to find the most lenient regulators and set up a company so as to take advantage of loose oversight. The greater the number of regulators, the more likely are jurisdictional disputes, or problems that fall through the cracks. Here at Wallet Blog, we believe the answer is fewer, rather than more, regulatory bodies, and that we need to hold regulators to greater accountability for the practices carried out under their jurisdiction.
6. Piggybacking: So long as congressional piggybacking occurs, legislative action is unpredictable. It’s as simple as that. Because of piggybacking, we cannot be sure that the laws that come up before Congress will have their intended effect, and we cannot prevent bad bills (like those that allowed for Credit Default Swaps) from making it into law through deceptive practices.
5. Bring Change to Congress: Congress is unable to police itself and this is why it has developed bad habits like piggy-backing, intimate relationships with lobbyists, etc. Because of the vested interest each member of Congress has in the system, as it exists now, it is impossible for internal reform legislation to get the majority of votes needed to make changes to the way Congress operates. At the same time, because of our government’s delicate system of checks and balances, it is inadvisable to give that power to another branch of the federal government. Our suggestion is that a body composed of state governors be put into place to preside over matters of reform in regards to the operation of Congress.
4. The Current Board of Directors System Must Go: The way the current Board of Directors system is set up, there is little incentive for the board members to disagree with one another or to give much attention to the desires or demands of stockholders. This system is antiquated, and given the accessibility to company information that shareholders might be afforded through the Internet, is also a bit ridiculous. What we need is to remove term limits from board seats, limit board size to 8 members and allow anyone (or any group) with 12.5 percent of the stock assets to one board seat. This would ensure full representation of the shareholders desires.
3. American Rule: We cannot stress this enough: so long as both parties are forced to pay their court fees during a law suit, we can expect baseless legal action and costs to be driven up in response. The cost of liability and malpractice insurance (along with lawyer fees) automatically makes our economy more expensive to run. Instead, the loser in a lawsuit should be responsible for all legal fees so as to prevent frivolous lawsuits.
2. Patients Accountable for Healthcare Costs: We cannot expect doctors to keep health care costs down. If we are hoping to make our health care affordable we must make patients responsible for keeping their own costs down. A health care system that does not do this is, essentially, doomed to failure.
1. Manhattan Project: Rather than let economic recovery efforts continue without concerted direction, President Obama needs to rally our nation’s resources towards energy independence in the next 5-7 years. In addition to helping end the recession, this would give us something that would move us towards independence from foreign products and create a new and highly sought after industry that would propel the nation forward in the global marketplace.