THIS WORLD of OURS – October 2011


By Bob Harwood

Planning For The Future

world-peace-in-our-handsAs new paradigms continue to transform our world we cannot plan for the future looking in the rear view mirror. Nor should analysis of issues be distorted by four year election cycles or by lobbyists and deep pockets financing those elections. In my lifetime world population has grown from two billion to seven billion. Door step farming and cottage industries have been replaced by agribusiness and ever more distant enterprises in a globalized economy. We live in a new, interdependent world.

When the Great Depression was followed by World War II, women supplied much of the work force on the home front and families were put on hold. Now the post war baby boomers are entering retirement. As a shrinking work force cannot support more seniors living longer lives in already stretched systems, the retirement age must be raised to more equitably distribute the growing cost of systems on which all of us depend.

As emerging nations compete as consuming societies the era of cheap goods from China must end. Yet within this global transition to greater affluence billions go hungry while obesity is a growing health issue elsewhere. Addressing global warming becomes more urgent as developing societies add to the strain on the finite resources of a threatened planet.

I deem paying back through my taxes a privilege but we must balance incentives and disincentives to encourage those activities that benefit society as a whole and discourage those that do not. Consumption taxes do influence personal choices. Through taxes Europe has doubled the end price of gasoline and steered a continent to public transit and more fuel efficient vehicles to counter global warming. America must move beyond a dysfunctional system of government and its inherent tax aversion.

Avoiding outright bankruptcy will require both major tax increases and major spending cuts including big cuts to public sector workers in unions’ last bastion. In an earlier time, unions did much to get children out of mines and factories and curb the greed of employers. Now unionists have become privileged members of the upper middle class with income and retirement benefits not available to most. Now, a wave of public sector strikes threaten vital services at national and local levels. Often negotiations founder not on near in concerns but on unions’ resistance to changes even in the distant future. Should pensions define benefits or define contributions? Should wages and benefits now enjoyed be guaranteed in perpetuity to new hires? If equity is the issue surely this zeal would be better directed to the vastly greater numbers on meager minimum wages or without employment at all in the here and now? As Warren Buffet points out, upper echelon incomes must pay significantly higher taxes to enhance the fairness of the economic pyramid of society as a whole.

In August global markets were in turmoil with alternating days of huge gains and huge losses in response to deficit concerns in America and Europe. The final straw was Standard and Poor’s downgrading of America’s credit rating after protracted highly public debate among partisan politicians and ideological extremists. This market turbulence was exacerbated by questionable practices in the financial sector. Some European countries imposed a temporary ban on the practice of short selling in which speculators bet against specific stocks in hopes of repurchasing at bargain levels. Regulatory controls must achieve a more sane balance.

My generation is without question the most privileged generation ever, more so than any generation that preceded it and, ominously, more so than any that will follow. We are challenged to broaden our viewpoint and extend our planning horizon on societal, economic and environmental issues. That is the least we can do for those who will follow.

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