The Magic Word for 2008

Think of this as Volume 11, Number 10 of A-Clue.com, the online newsletter I’ve written since 1997. Enjoy.

Production.

Say the magic word and the debate, as well as the choices, of 2008 come into sharp focus.

The only way to get out of our current economic problems is through production of new goods. The only way to launch the War Against Oil is through production of new types of energy.

The two points are directly related. The key to production at a profit lies in reducing the energy costs of production. And the energy costs of distribution.

Speaking of which, a focus on production is how you address questions regarding the Internet. Our Internet infrastructure is in sorry shape. It needs a serious upgrade. These are the canals or roads of our time, and we need to treat Internet access just as seriously as our forefathers did those routes to market.

Production also puts many issues into sharp focus because of how the two parties have proposed to boost it.

Republicans want tax cuts. They want "incentives" for companies to boost production of oil and gas, of coal, and of Internet capacity. These have been at the heart of their economic program for years.

Democrats want competition. A Democratic program for production would focus on increasing the amount of competition in all markets.

A floor price for energy would be a good start. Lock in the current gains, tax away oil and gas whose price comes in under the floor (it won’t once the floor is in place) and you provide plenty of incentives for both the production of new energy and increasing the efficiency of industrial production.

Competition is also the answer to our Internet problems. Demand that current networks, both wired and wireless, open up to new competition, as was done in the 1990s. Problem solved, thanks to Moore’s Law, because it is only by violating Moore’s Law and squeezing more money out of the same services that the current duopolists have stayed afloat.

Production is the answer to not only our labor problems, but (in part) to our crime problems. Production creates lots of relatively low-skill jobs. High demand for low-skill jobs will increase wages for those jobs, and create incentives for producers to take a chance on the 1% of us now behind bars. If you enable people with minimum education the chance to earn a fair living your crime problem goes down.  Create enough jobs and we can even hire Mexicans, in Mexico.  So much for immigration problems.

Production is an economic policy, it’s environmental policy, it’s energy policy, it’s trade policy. By creating new ways to make things, which are more energy efficient, we create exports, both in the goods themselves and the machines used to create the efficiency.

Production is also education policy. Focusing the talents of our
students in all grades on production is going to spur entrepreneurship,
and the creation of new companies which can hire the people who don’t
do so well in their classes.

I’ve written a lot about the War Against Oil here. The War Against Oil
means a war against energy inefficiency as well as an economic war to
unlock solar, wind, and geothermal energy. These forms of energy won’t
be exportable, although the technology used to create them certainly
will be. So the purpose of the War Against Oil is to increase
profitable production of American goods.

Focus on production and you address the real problems Americans face,
on both Wall Street and Main Street. Production was what won the World
War, and it’s what we need to win the economic war the Bush
Administration has so far done its best to lose.

The future of America lies in becoming a frugal, productive society again.