June 17, 2012

What will work to mend our economy

This current global malaise is a first. Factories have been abandoned, homes and buildings sit empty, machinery is idle and people are unemployed. Yet, while we know how to manage the economy, we won’t employ our tools effectively.

Our primary challenge is to coax more output out of the economic machine. Secondary challenges are unemployment, underemployment, deflation and inflation, monetary policy and national debt. While these symptoms can be treated to ensure the right mix to reach full power, we must fix the machine to permanently solve the problem. Until the primary challenges are solved, generating more spending without creating greater production will be inflationary.

Instead, we must seek high bang-for-the-buck ways to expand production. Past stimulus emphasized consumption by bolstering public-sector employment and unemployment compensation. It failed to invest in greater production of critical goods or services.

First, we must once again become the most innovative, export-oriented nation in the world. Innovation will require education in specific areas. Patent reform, R&D stimulus and more venture capital will help us foment the next great ideas.

We also need to access our natural resources, sustainably and sensibly. Energy is available from new natural-gas technologies and the expansion of alternative energies like wind and solar. We must solve a pricing and distribution problem. Our gasoline is underpriced in the sense that it has not provided a sufficient incentive to drive more efficient vehicles, as Europe already does. Most economists agree that gas should be taxed more, as painful as a transition to greater fuel efficiency may be.

Our energy distribution network is archaic. We can earn almost immediate dividends in more efficient distribution and lower energy infrastructure costs if we invest in our electricity and natural-gas grid. There is no reason why natural gas is not much more available here and in the Eastern United States. Investments in these sectors would reemploy the construction industry, create greater export-industry competitiveness and allow our savings in energy costs for homes and industry to be used to invest in ways that secure our economic future. The private sector refuses to invest in these networks in this uncertain economy. There is a role for government, with its low cost of capital, to stimulate this investment and get construction going again. In turn, this investment will create secondary jobs in other sectors.

Text Only | Photo Reprints
  • Terry_Mattingly.jpg Easter with doubters and the 'nones'

    Should more pastors ask this blunt question: "Do you really believe Jesus was raised from the dead?" wonders religion columnist Terry Mattingly.

    April 18, 2014 1 Photo

  • Black_Peter_2014_cropped.jpg Canadiens are Canada's team

    The National Hockey League playoffs are underway, and for Canadiens fans, many of whom likely reside in the Montreal "suburb" of Plattsburgh, it is a time of hope and joy.

    April 18, 2014 1 Photo

  • little_mug.jpg There's no saw like an old saw Kaye and I laughed ourselves silly the other day as we tried to top each other with our own sayings from childhood, columnist Gordie Little writes.

    April 13, 2014 1 Photo

  • Denenberg_Stu1.jpg Privacy concerns make a comeback

    There's a growing concern amongst the millennials, columnist Stu Denenberg writes.

    April 13, 2014 1 Photo

  • paul_grasso.jpg Several options exist for downtown

    Pedestrian mall just one idea that could be good for city's economic future, according to columnist Paul Grasso.

    April 13, 2014 1 Photo

  • colin_read.jpg Government can't create success on its own

    It takes a grass-roots community effort of people working together to assure future accomplishment, according to columnist Colin Read.

    April 13, 2014 1 Photo

  • Hagar_mug1.jpg Farmers strive for sustainability

    Conserving the land and assuring long-term profitability are two of the key goals for farmers these days, according to columnist Peter Hagar.

    April 13, 2014 1 Photo

  • Black_Peter_2014_cropped.jpg Big shift in Quebec vote

    Being a man of science, Philippe Couillard, premier-designate of Quebec, chose to use a geological term (though his field is actually medicine) to describe what happened in Monday's election, writes Canadian columnist Peter Black.

    April 11, 2014 1 Photo

  • Terry_Mattingly.jpg A monastery in the Hebrides, after 1,000 years

    Before Father Seraphim Aldea can build a monastery on Scotland's Mull Island, he needs to have a working septic system, writes religion columnist Terry Mattingly.

    April 11, 2014 1 Photo

  • Tobias_Sue_012914.jpg Old movies offer more than entertaining TV

    Columnist Susan Tobias and her husband, Toby, are reminded of simple childhood memories while watching an old black-and-white movie.

    April 9, 2014 1 Photo

Peter Black: Canadian Dispatch

Lois Clermont, Editor

Cornell Cooperative Extension
Richard Gast: Cornell Ag Extension

Bob Grady

Guest Columns
Peter Hagar: Cornell Ag Connection

Health Advice

Ray Johnson: Climate Science
Gordie Little: Small Talk

Terry Mattingly: On Religion

Steve Ouellette: You Had To Ask

Colin Read: Everybody's Business

Pinch of Time