The economy seems to be showing signs of recovery, at least if you are watching the stock market. If you watch the unemployment rate numbers, it’s a different story. A recent small drop, down to 8.9 percent, seemed to bring a lot of excitement, since it was finally under 9 percent. Hardly something to get giddy about. Some have even suggested this may be the new “norm,” which would indeed be a sorry state of affairs.
It’s time for some out-of-the-box thinking by our fearless leaders. It might be asking for a bit much, but perhaps they should open their minds to something other than tax cuts on the Republican side, and stimulus spending on the Democratic side, to try and fix this. Let’s take some bold actions that will show results for years to come.
Two things seem to be serious drags on the economy. The first is the cost of health care. It’s bankrupting local and state governments. It’s causing severe problems for companies that offer it to employees, in some cases taking up to 16 percent of their revenues. They are trying to compete with companies in other industrialized nations at a huge disadvantage, since they all have national health care and their private companies don’t have the added expense of health care.
Unfortunately, our government has proven incapable of dealing with that issue. The Republicans don’t want any national plan, and the Democrats passed a plan that issues mandates and rules for coverages, but doesn’t seem to deal with the main problem, that of the cost of health insurance.
The other major drag on the economy was cleverly lampooned in a widely published political cartoon, in which an animal, representing the recovery, was being pulled back by a rope, labeled “High Gas Prices.” That perfectly illustrates a major problem. And it is predicted that the price of gas may reach $5 a gallon by the end of the year, probably killing any hopes for a major recovery.
If the cost of oil were to miraculously come down, it would spur the economy in a massive way. It would boost everyone’s disposable income, thereby increasing spending, which would increase profits and spur manufacturing, which could be done more cheaply due to the reduced price of oil, which would increase profits and spur hiring, and the cycle would continue.
I know there are those who say we should raise the cost of gasoline with a national gas tax, in order to get people to drive less, causing less pollution and decreasing our dependence on foreign oil. However, while those are good intentions, I believe we have to do whatever we can to strengthen the economy, because a strong economy will keep the United States powerful and keep us a world leader.
How to bring the price of oil down is a question that our government has never really asked. We have always dealt with the high cost of oil through methods that have included rationing (in the days of the ‘70s gas lines one could only buy gas on certain days, depending on if your license plate had an odd or even number on it), depleting our stock of reserves, and lessoning the restrictions on drilling off our coasts. But we never had a plan to try and fight back on the price of a barrel of oil.
If companies in this country had done what the oil producing countries in the Middle East did, in forming a cartel to limit production to keep prices high, they would have been accused of collusion, which is illegal. So why do we act like lambs going to the slaughter and accept it when it’s done to us by foreign countries?
They got together and formed OPEC, the Organization of Petroleum Exporting Countries, in order to manipulate the price of oil. We should fight fire with fire. Let’s get together with other importing countries, such as the European Union, Japan and even China, who rely heavily on imported Middle Eastern oil, to form OPIC, the Organization of Oil Importing Countries.
What would allow us to do this effectively is the fact that the Middle Eastern countries have plenty of oil, but almost nothing else. They import well over 50 percent of their grain, which is used for most of their basic food products. That’s right, over 50 percent of their food has to be imported, because they don’t produce enough on their own. And 70 to 80 percent of their building materials are imported, including wood, cement and steel. Technology is something else they can’t produce on their own, with almost 90 percent of their technological products, including computers and communications systems such as cell phones and the like, all being imported.
It’s time to beat them at their own game. Let’s coordinate the price of these items they import from our newly formed OPIC union so they rise and fall with the price of oil. If the want food for their people and building materials for their palaces, they’ll have to work with us, not against us.
I can hear the naysayers already, complaining that we would be going against our free market system, and we can’t be telling our private companies what they can charge for their products. But in our history, when emergencies arose, we often called on our private citizens and corporations to contribute to the common good. Factories during World War II were asked to put 10 percent of their output to the war effort, and some manufacturers were completely transferred to wartime production.
It’s time to once again come together to do what is necessary to save our economy, and not be pushed around and vulnerable to the whims of OPEC. Our leaders need to have some backbone. They haven’t shown the willingness to do anything to fight the disastrous effects of the price of oil, and its devastating affect on the economy. The time to do something is now, before it gets even worse.