Hughesair (Inflection Point)

Retired physician and air taxi operator, science writer and part time assistant professor, these editorials cover a wide range of topics. Mostly non political, mostly true, I write more from experience than from research and more from science than convention. Subjects cover medicine, Alaska aviation, economics, technology and an occasional book review. The Floatplane book is out there. I am currently working on Hippocrates a Fanciful History of Medicine and Death of the Middleclass. Enjoy!

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Thursday, June 23, 2016

Christine Legarde

Like another elegant French lady, La Belle Poule, (The elegant French frigate fighting off the British blockade 1778) Christine, the director of IMF calls attention to US poverty, one in seven living in poverty, unsustainable, and the polarization of wealth. Christine Legarde is the first out of this whole political season to mention productivity as a solution. Our first quarter GDP growth fell to 0.5%, just short of going backwards.
Christine suggests childcare and maternity leave to bring more women into the work force and increase minimum wage, some tax credit at the low end to encourage greater participation in the economy, but the cornel of wisdom was her call for productivity.
How few pay any attention to the antecedents of productivity. First a cheap, sustainable, abundant resource, second the human resource, then capital and entrepreneurial ability, both of which we have in abundance. It is the first two where we stumble with misunderstanding and misdirection.
Think what a flood of opportunity might come from: free bandwidth, free information, cheap energy/electricity, cheep transportation, free education and cheep communication.
No business flourishes without a secure labor force, healthy, well fed, with energy and satisfaction. To that end: free or cheap healthcare, affordable food and shelter, education, safety (better law enforcement) employment, security in retirement, childcare ( pre-school) etc. If the poor had access to the infrastructure they would no longer be pore.
We can tax the wealthy to pay their fair share for public infrastructure, but none of this will work so long as we have the colossal loss of jobs to cheap foreign labor, loss of manufacturing to inequitable trade treaties, with the resulting loss of wealth from the US economy. Monopolies dominate the infrastructure, and lost wealth accrues to the so called one percent who now control the legislative process.
There remains a preoccupation with consumption. "If people would just spend more, the economy would grow/" As things stand, if people spend more, they would just run out of money. The economy runs on velocity. Spending is only a part of the equation, it's a product if you will. How many times will money change hands over a period of time. It is more a matter of churn, of energy, of optimism, an energy you can feel on the street. Instead, our political status quo brings us tattoos, obesity, drug addiction, depression, lethargy and an admonition to buy more at Wal-Mart.
More women working in the workforce and increased minimum wage are strong boosts, but they come at a price. In good times it does not require two or more family members working to provide a living. Increased minimum wage already boosts food and restaurant prices causing a strain on fixed income seniors. As the elegant French lady suggests, we need to think productivity.

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