What is a GOOD economy?

What is a Good  Economy?   
(published on www.socialproblemsrg.blogspot.com)

   It seems we are informed daily about the state of the American economy as measured by the GDP, the rate of inflation, the Federal deficit, the stock market losses or gains, the growing national debt.  I wonder whose economy is being assessed.  I understand that the net worth of the most affluent 7% of Americans has been increasing since the end of the recession in 2009 whereas the the net worth of the less affluent 93% has been decreasing (based on  www.pewsocialtrends.org/.../a-rise-in-wealth-for-the-wealthydeclines-for...).  Increased wealth at the top has not been trickling down to the bottom.

   So how can the economy be described as improving, unless, of course, one is describing the economy of the upper 7%  most affluent  Americans.

    The Obamas, the Clintons, the Bushes seem to be convinced that the way to make the American economy maximally prosperous is for American companies to produce goods and services for the whole world.  This, I suspect is the rationale for trade agreements with other countries. This sounds sensible since there are about twenty times more potential customers in the rest of the world as there are in the United States.  This was probably the reasoning used to justify NAFTA (North American Free Trade Agreement).  I found an article in the Milwaukee Journal (www. Milwaukee Journal Sentinel) posted on 1/22/14 by David Newby entitled "Fast track on Trade Agreement is Wrong Track".   Newby says a lot of American jobs were lost as a result of NAFTA. According to this article, other "free" trade agreements since then resulted in the loss of several million more.

     Why do trade agreements result in a loss of American jobs?  I believe it is because foreign companies manufactured similar goods as American companies but the foreign goods were less expensive.  American consumers, who seem to regard bargains as an intrinsic human right, stopped buying American goods in favor of cheaper foreign products.  How are foreign companies able to sell less expensive products?  There are probably numerous factors involved.  Some of those factors may be (1) that foreign workers are willing to work for less than American workers.  (2) Perhaps American companies insist on greater profit margins than foreign companies.  (3)  Foreign companies may not have to comply with the strict safety, product quality and environmental regulations that American companies must observe.  (4) Foreign governments may subsidize the competing foreign businesses to a greater extent than the American government subsidizes the same kind of businesses in this country.

     NAFTA's overall effect on life in America is debatable.  What is less debatable is that the richest Americans, Canadians and Mexicans are richer today than they were in 1994.  How?  If hundreds of thousands of Americans lost jobs as a result of cheaper goods from Mexico and Canada being bought by American consumers, would that not indicate less gain for American manufacturers?  If you are an American manufacturer who can not compete with goods from other countries, you have options.   You can invest your money in your foreign competitor's business or you can move your operation to a country where the expense of manufacturing is cheaper.  Either way, you continue to make money. Too bad making money is not that simple for those who lost their manufacturing jobs.
   
  What is the solution to the uneven competition between American and foreign companies?

  In his article cited above Newby reports that there is a new trade agreement in the works.  The Trans-Pacific Partnership trade agreement (TPPTA) has been negotiated in secret for four years.  The 1000-page draft has 29 chapters, 24 of which have to do with "harmonizing " standards and regulations between participating nations.  Translated, that means the large corporations are trying to undermine American standards and regulations that support worker safety, environmental quality, etc.

     Anyone with a high school education should realize that lowering work safety, product quality, and environmental protection regulations in this country will result in more human illness, accidents and environmental damage.  Who will pay the price?  Insurance companies?  Higher insurance premiums.  The government?  Increased taxes and/or increased national indebtedness.

     If the United States signs on to the TPPTA, the Upper 7% will make out like bandits and the rest of us will be stuck with the bill.  And the Obama administration will accept the credit for a more prosperous economy.  This is, evidently, the best plan our brightest thinkers and experts can conceive.  Although I am not the brightest or best thinker, I think this is a sad situation.  To understand why I think that let me explain first what a bad economy looks like (the present condition) and then what I think a good economy would like.

THE BAD ECONOMY

       We presently have an economy in which governments, rather than buying American-made

goods and services, thereby increasing income from taxes, shop the international marketplace for the cheapest products and/or services.  The Federal Government, for example, borrows money from China and then uses a portion of that money to purchase Chinese goods.  This deprives the American government of income from the increased tax revenue they could have collected by buying American and which tax income they need to pay what they owe China.  Buying from the Chinese also helps Chinese businesses to prosper and increases the interest the American taxpayers will have to pay the Chinese banks.  I can't help wondering whose idea it was to start borrowing money from a country with one of the most abusive governments in the world.
 
    The fact that governments in the U.S. waste countless billions of dollars annually could also be examined from an ethical point of view.  (See www.socialproblemsrg.blogspot.com , the National Debt post for details about government waste.)

    I think an economy is not doing well when 14.8 %  of the population lives in poverty, and 1.5 million households (including 2.8 million children) are designated as living in "extreme poverty" (on less than two dollars a day before government benefits)                                                                (http://en.wiki/economy_of_the_United_States).

     A bad economy is one in which low income citizens do not have an equal level of police protection, educational quality, healthful housing, quality parks and playgrounds, infrastructure maintenance, and other municipal services.

    It is not good when businesses value profit more than the Common Good; when business decisions involving consumer health and safety are made on the basis of cost/benefit analysis (See http://web1.calbaptist.edu/dskubik/pinto.htm for an example); when large corporations are permitted to decide if people have the right to know what is in their food; when large corporations are granted the right to free speech; when corporations can give large amounts of money to candidates of both parties so that whichever candidate wins an election will favor that corporation.

A GOOD ECONOMY

     A good economy would entail the Federal Government and State and Municipal governments purchasing necessary goods and services from American suppliers except where the needed goods or services could not be furnished by American suppliers within a reasonable amount of time and a foreign supplier was able to furnish the same sooner.

      Governments would not waste money, i.e. spend it unnecessarily, in a good economy.  (See www.socialproblemsrg.blogspot.com , the National Debt post for a fuller explanation of wasteful spending.)  That would include not giving government subsidies to industriesthat can make a profit without the subsidies.

      A good economy would be one in which American businesses would be patriotic enough to keep their corporate headquarters and their production operations within the United States and one in which consumers would willingly commit to boycotting any business that was either unpatriotic or socially irresponsible.  By social irresponsibility I mean threatening the Common Good and/or human rights.

   It would be good if the government of the United States did not owe money to other countries, especially those that violate human rights.  A better economy would be one in which the national debt as well as all State and municipal debts would be paid in full.  And in which the income of governments would be sufficient to pay all necessary(non-wasteful) expenses.

    A really good economy would be one in which there was a truly progressive federal income tax system without tax exceptions for individuals, families, nor businesses.  An example of a progressive annual personal income tax would be one that started at .01% rate of taxation for those making b/w $712 and $1000 extending in increasing increments to 90% for those making $1 billion and above.

    I think it would be good if the state collected the property taxes designed to fund pre-school, primary, and secondary public education.   That way the total sum could be equitably divided among all public schools in the state based on the number of students enrolled in each school.  In regard to school boards, if the school board members must be paid, that salary could be paid by the State.

      A good economy would be one in which all adults willing and able to work would have decent jobs that paid enough to enable them to afford healthful lifestyles.  (For more details on healthful lifestyle, check out www.equaleconomy.blogspot.com , Section C. An Alternative Solution, #1 A Healthful Lifestyle.)

     Governments would ensure that every citizen would be able to share equally in a quality Common Good (education, libraries, parks, gymnasiums, infrastructure, health care, etc.).

   Businesses would value the preservation of the Common Good and human rights more than profit.

     Political candidates would not receive large sums of money, etc. from any individual entity in a good economy.

      The common knee-jerk response to the "good economy" concept is that it would not be fiscally feasible.  I disagree and make the case for affordability at www.equaleconomy.blogspot.com, Section D Analysis of the Alternative Solution, #1 Affordability.