On May 18 The Wall Street Journal had an article on a new lead-paint law titled “New Lead-Paint Law Heavy on Budgets.”
This law serves as a good example of an important issue I wrote of in my May 2009 article “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’?”
In that article I wrote of the need for policies to be thoroughly assessed with regard to overall economic impact, compared with whatever “societal good” the policy purports to accomplish.
A thorough discussion of the benefits and costs of this new lead-paint law would be exceedingly lengthy and complex. However, I believe that this lead-paint law, if thoroughly analyzed from an “all things considered” standpoint – taking into account both “societal good” as well as economic impacts – would be found to be (far) suboptimal in many respects. Of particular concern is that this is yet another law that disproportionately (negatively) impacts small businesses.
While one may dismiss this new law as one that is limited in nature and thus relatively insignificant, it is important to note that it is just one example among many in which inadequate overall analysis was conducted. Cumulatively, these poorly analyzed policies are very significant in determining whether America’s economic future will be that of a “greenfield” or “brownfield.”
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SPX at 1064.88 as this post is written
Crain’s recently came out with their list of the largest Chicago-area employers. What I found notable was that the top 5 employers are various government entities (federal, state and local).
Of course, this situation is not unique to the Chicago area. Many states have a large percentage of their total jobs as government jobs.
While many might be indifferent to this situation – assuming that a “job is a job” – from an overall economic standpoint it is troubling on various fronts.
One such front that deserves special attention is that which I discuss in the “America’s Economic Future: ‘Greenfield’ or ‘Brownfield’?” article.
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SPX at 1161.65 as this post is written
As a follow-up to yesterday’s post, here is a passage from Larry Summers’ March 13, 2009 speech that speaks of the importance of economic strength in achieving broader societal goals:
“Our single most important priority is bringing about economic recovery and ensuring that the next economic expansion, unlike it’s predecessors, is fundamentally sound and not driven by financial excess.
This is essential. Without robust and sustained economic expansion, we will not achieve any other national goal. We will not be able to project strength globally or reduce poverty locally. We will not be able to expand access to higher education or affordable health care. We will not be able to raise incomes for middle class families or create opportunities for new small businesses to thrive.”
Our national goal to achieve a sustainable recovery (or what I frequently refer to as “Sustainable Prosperity”) has been and will continue to be a challenge, given various underlying fundamentals.
In order to achieve “Sustainable Prosperity” we will need to have a solid focus on planning our economic future and its dynamics. Toward this end, I wrote an article in May of last year titled “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’?” which can be found listed along the right-hand side of the home page. That article, as well as others I have written, explores some of what I believe are pivotal issues that lack recognition with regard to our economic future.
All of my articles are also listed and summarized at this link:
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SPX at 1075.51 as this post is written
Here is a recent story from BusinessWeek, “Will Tax Breaks Boost Jobs?”
As seen in my article (with italics added for emphasis) “America’s Economic Future – ‘Greenfield’ or ‘Brownfield’ ?”
“One way to determine whether an economic “greenfield” environment exists is whether businesses are thriving and multiplying naturally – with an indicator being that they are choosing and wanting to locate their operations and sales territories in a specific location without needing to be artificially induced to do so through various incentives or coercions. However, this indicator has to be viewed in the overall economic context, as there may be circumstances that can serve to override casual observations.”
One of the reasons I started this blog is because I felt that this economic ‘greenfield’ vs. ‘brownfield’ concept is not understood; yet has massive implications for our economic future.
As seen in the BusinessWeek article, that states and regions have to engage in bidding wars to attract and/or retain businesses (and jobs) is likely a “red flag.” While it is easy to dismiss these “bidding wars” as “the way things are,” perhaps the critical question, in the larger context, becomes “Is this the way things should be?”
SPX at 953.18 as this post is written
One of the questions I received when I first started this blog is why I didn’t choose to discuss the global economic future, as opposed to America’s Economic Future.
This is a good question. In essence, I do believe its focus is on the global economic future, as not only is the United States (obviously) the largest economy, but its economy and its characteristics are so pivotal to those of the rest of the world. Perhaps as importantly, the United States seems to have attained global leadership with regard to how to best “manage” an economy, as well as how to “fix” The Economic Crisis. It is evident that many global economies, especially the more developed ones, have adopted (to varying degrees) the same philosophies and actions that the United States has as far as overcoming The Economic Crisis.
As such, I believe an economic discussion that focuses on the United States can in many ways be extended to other countries as well. The main issues of this blog, such as Sustainable Prosperity, Economic Greenfield vs. Economic Brownfield, etc. are certainly pertinent and applicable to countries and regions worldwide.
SPX at 921.23 as this post is written
I will comment frequently on Ben Bernanke, due to his position, but perhaps more importantly, because of his stated theories, beliefs, and ideologies. It seems to me that the handling of The Financial Crisis certainly has the “fingerprints” of Ben Bernanke all over it. In fact, I believe that perhaps no other person’s ideologies have ever played such an outsized role in the U.S. economy (and various other global economies) than those of Ben Bernanke. In my opinion, the U.S. economy (and many financial markets) since The Financial Crisis, can be viewed as an ideologically-levered extension of Ben Bernanke’s beliefs and understandings.
Is this a good thing? It gets back to two central themes of this blog; are we heading toward Sustainable Prosperity? And will America’s Economic Future be one of an Economic Greenfield or Economic Brownfield?
As for me, I will let my writings speak for themselves with regard to our handling of The Financial Crisis. As one can guess, I do respect his background, and believe that he has an exceedingly difficult position; but I don’t necessarily concur with many of his theories, interpretations, or actions.
SPX at 939.35 as this post is written