Ah, Labor Day. It was nice to have a day off yesterday. But isn’t it supposed to mean something? Per Wikipedia, it does. “Labor Day is a United States federal holiday observed on the first Monday in September (September 5 in 2011) that celebrates the economic and social contributions of workers.” Except it’s difficult to celebrate the contributions of workers when so many people aren’t working. Unemployment is currently at 9.1%*, with at least 14 million people currently out of work. Of course, those are the official numbers. We all know real unemployment is far higher.
With the American economy circling the drain, everybody has an opinion of how to get things back on track. Although there are brilliant ones, some of these ideas are really out there. Like alien invasions. No really, alien invasions. Check out the following statement from New York Times columnist Paul Krugman.
“If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, whups, we made a mistake, there aren’t any aliens, we’d be better–“
This was from his recent appearance on the CNN program Fareed Zakaria GPS. He was interrupted by the show’s other guest, who mentioned that this sounded like Orson Wells. Krugman replied that there was actually a similar thing that happened on The Twilight Zone. But this really just reminds me of the graphic novel Watchmen. “To frighten goverments into co-operation I would convince them that Earth faced imminent attack by beings from another world.” That was written by Alan Moore in 1986. What Krugman was really getting at was that we could use some inflation. But since it’s very hard to get inflation in a depressed economy; you would need “a program of government spending plus an expansionary policy by the fed.” He states you could accomplish a great deal if you use these things together. The alien invasion idea was just given as a modern example of something to galvanize and unite the country, like what happened during WWII.
What’s weird is that this is not the first time this idea has come up. A few days earlier, renowned physics professor Michio Kaku appeared on The Dylan Ratigan Show on MSNBC. Michio, who is also a consultant for the Discovery Channel series Curiousity, spoke about what might happen if aliens invaded the Earth. This wasn’t a joke. His area is theoretical physics, and this idea was tied to an episode of Curiosity. He mentioned that when President Reagan met Mikhail Gorbachev, he said the Soviets and the US would be allies if we were attacked by the Martians. This is verified per written transcripts of the meeting. Regarding the concept of global governance, Michio said that a “common enemy from outer space could help to unite the Earth, just the way Ronald Reagan said.”
During a recent Q&A session on Reddit, former US Secretary of Labor Robert Reich was asked if Krugman’s alien invasion theory had any merit. He answered, “I think we already have an alien invasion from space. It’s being led by Michele Bachmann.” However, on a serious note Reich gave some real ideas to help fix the economy and create jobs. Like reviving the depression era Works Progress Administration and Civilian Conservation Corp to hire the long-term unemployed.
“The ratio of profits to wages hasn’t been this high since before the Great Depression. Part of the answer is education: From early childhood through college, we’ve got to be training more of our people how to identify and solve problems, work creatively and constructively in teams, see patterns and integrate different disciplines and ways of thinking.”
He also said that the President should ask for a trillion dollars to boost the economy, for infrastructure investment and loans to cash-starved states and localities. Good ideas all, but the concepts are difficult for the everyman to understand…and they’re boring. It’s much more fun to just hope for a quick and easy fix like the whole alien invasion scenario. I think I’ll go read Watchmen again.
What do you think: can we pull the economy out of the abyss, or will it take something like a fake alien invasion to get things moving again?
Source: reddit, YouTube (Fareed Zakaria GPS), YouTube (The Dylan Ratigan Show), * Trading Economics
jeffsilvey.com 
I think the ride as our generation and our parent’s generation knew it is over. A good deal of our prosperity has come from decades of borrowing from both individual households and our government. It’s almost like the guy that gets a good job (again, think WWII) and then goes on to buy a house, a car (50’s, 60’s no problem) but then decides he wants a boat, and a bigger house that he really can’t afford but you know, the neighbors have one and eventually he is over leveraged. We aren’t missing payments yet, but we need to get straightened out. The tough part is during a payback period, there is no room for luxury, we have to simplify to pay off this personal and national debt.
I am preparing my son, who turns 18 in December, for this new reality. Where I drove a car at 17, he is into bicycling and has no interest in a drivers license. He wants to live minimally, with other people to keep costs down. He isn’t into “stuff.” He wants to walk or ride his bike to work, not drive 100 miles to a city job from his cookie cutter home in the suburbs.
Less consuming, less stuff, more living with room mates or extended family. The mistakes of three or four generations are landing square on the shoulders of our children. Hopefully they learn to be happier with less.
Single earner families with stay at home parents are likely to come back into vogue too, and this is potentially a very good thing, you know, parents actually raising their kids instead of daycare. Well if couples can stay together it is but I digress.
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“The mistakes of three or four generations are landing square on the shoulders of our children. Hopefully they learn to be happier with less.”
True dat. They’re going to be paying for that for a long, long time.
And minimal is a good way to live.
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I saw Paul Krugman speak some years ago as a guest of a speakers series in the Coachella Valley. I think Bush was still president although it could’ve been very early in Obama’s term. Although he didn’t mention aliens, he did advocate a massive federal payout in the form of public works as a way to counter private sector unemployment and get the economy going again. This makes sense as people who don’t work don’t spend money, ergo, getting them back to work will get them back to spending money and so forth. Also, our national infrastructure, which is so 20th century, could really use a face lift. However, as we all know, some maintenance of the federal deficit is drastically required and most state deficits are in similar straights. Also, if inflation were to enter the picture as a result of a massive federal jobs program, the results would be particularly devastating to all, particularly those struggling to get back on their feat. So, two obstacles, whopping budget deficits and the specter of inflation, counter Mr. Krugman’s easy logic. I can’t offer any alternative but I do agree with Mr. Krugman in that if we are to go with a plan such as his, the amount of money pumped into the economy must be sufficient enough to be effective; too small an amount, although beneficial to those involved, will fail to achieve a decisive result.
Maybe Chad’s right and we all should just learn to live with less. After all, if so many people hadn’t taken on property mortgages that they couldn’t afford, we wouldn’t be in this mess.
One thing I’d like to see is more self-sufficiency. Why aren’t people piling into pick-up trucks and going off in search of work like their great grandparents did during the Great Depression or Mexican immigrants continue to do in these times? (And we regard them as the undesirables?) Why aren’t there more shoe shiners and sandwich vendors? (A lot of people who do this kind of work actually make good money.) The growth of a street economy could have a salutary effect on the economy; local governments could step in to facilitate this. Also, the ascension of a do-it-yourself mentality could engender positive effects which go beyond mere economic concerns.
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Wow, good points. Let me just say:
1) Yes, the amount of money pumped into the economy would have to be huge. We’ve already had a “stimulus” package, + the bailouts early in Obama’s term, and none of that worked in the long run. The problem is businesses will not start hiring because there is not enough demand. It’s like we need EVERYBODY to start hiring all at once. Then with people spending money again, the demand would be there to sustain it. The President should use his bully pulpit to put pressure on businesses to do something like this.
2) “Maybe Chad’s right and we all should just learn to live with less. After all, if so many people hadn’t taken on property mortgages that they couldn’t afford, we wouldn’t be in this mess.” Amen. And the banks that took on those bad mortgages should be help accountable for that. With no accountability, nothing will ever improve. Banks and businesses will keep gambling with investments to disastrous results.
3) The sense of entitlement most people have is our society’s downfall. We DO need more self-sufficiency. I don’t know if “piling into pick-up trucks” is feasible in this modern age, but you still have the right idea of rolling up our sleeves and just trying to make something happen. Everything is different- instead of sandwich vendors and shoe shiners, now we have bloggers and self-published authors on Amazon. Some people are really trying, it’s just not as easy to see now.
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