Some 15 years ago (maybe more) I read “Diet For A New America”, the expose of America’s factory farms, written by John Robbins, the then heir to the Baskin-Robbins fortune.  The book opened both my eyes and mind with respect to the agriculture industry in the U.S.    While the book did little, at the time, to change my dietary habits, it was central to shaping my relationship with food, for the better, in the long run.    This blog post is unlikely to do much to actually change our circumstance in the short term, but, like Robbins,  I believe we need to begin with a recognition and acceptance of the problem; from there change can emanate over a realistic time horizon.   With that I offer up my plan for saving capitalism as we know it:

1.  Tort Reform – I suspect you are now scratching your head.   This plan begins here? Yes it does.   I  don’t purport to know who is telling to truth when Rep. Tom Price says the cost of unnecessary litigation taxes the health care system $650 billion annually or if this figure is only $56 billion as Harvard Public Health Professor Michelle Mello estimates, and in fact I don’t really care.  What I do know is your unhindered ability to bring a lawsuit drives up the cost of nearly everything.   More significantly, it undermines all sense of accountability in our society.   We have become a nation that expects something for nothing; our sense of entitlement is, for lack of a better word, gross.   Procedural limits and damage caps would not only reduce costs but it would change the way we view ourselves.   Tort reform would restore the concept of work ethic in America.  Consider it the end of the free lunch, with apologies to Harry Butler (you can Wikipedia that one).

2. Address Obesity – The cost of obesity to the American economy is huge — hundreds of billions of dollars.   However,  for me it is less about the direct cost to the health care system (again), and more about the indirect cost, which are borne by employers in the form of higher costs and lost worker productivity.  Let’s face it, the average American is going to have to work both harder and longer in the future to pay for our nations debt.    We can’t do that if society is unable to return to a reasonable health standard.   Further, the high cost of health care dissuades innovation and new company formation.   We will not solve obesity as its roots are genetic, but we can promote industry and incent individuals to address the problem.  Maybe if we, as a nation, can reduce our dependency on processed foods, it will provide a necessary injection to our domestic agriculture base let alone help us do our jobs better.  Productive workers are happy workers.

3. Term Limits/Return of the Welfare State – I have a political science minor, but I am no expert on government; I haven’t lived through enough political regimes to be credible.  However, our political system has clearly become a soap opera that is equal parts partisan politics and tomfoolery.   The net effect is we end up with policies that address the lowest common denominator.   Further, long standing incumbents in key positions of power act like they know what is in the best interest of the people who are telling them to do just the opposite.   Our life has been reduced to 90-days of negative campaign ads every other year.   We need new ideas and responsive political representatives in government.  Term limits favor meritocracy, encourage competition, reduce bureaucracy, and control the influence of interest groups.   However, term limits are not enough, we also need to return significant rights to our states.   We are no longer a homogenized population whose needs can be universally addressed by policies at the national level.  States are better situated to devise and implement policies that meet the needs of its residents.   By empowering people to deal with problems locally you build a sense of community.

4. Underwrite the New Manufacturing Economy – Currently, capital flows follow collateral and cost effective business models.   Without ties to a deep pocket, capital intensive businesses have little hope of getting off the ground.   Capital expenditure has become a “dirty word”.  However, the manufacturing base is a critical employer of our middle class population, and it is vanishing because of our adversity to invest in real assets.   Our need for instant gratification limits our growth.   Further, the current labyrinth of federal grants currently funding the manufacturing industry favors those who are well enough off to pay for lobbyist to influence policy development and employees to process the paperwork to garner it.  The rich are simply getting richer.  The poster child of the current regime is Tesla Motors, hardly a start-up manufacturing business but your tax dollars are paying to build their manufacturing facility and Tesla’s venture investors thank you.  We need real venture capital for fundamental manufacturing innovation and micro-lending to leverage the available equity investment.   Re-energize manufacturing and you begin to address America’s unemployment problem and restore our sense of self worth.

5. Reign in Consumer Credit – Let’s face it, we are a consumer driven economy and one that is prone to spending beyond our means, well beyond our means.    In fact, as a nation we have over $950 billion in credit card debt and  14% of disposable income goes to service that debt — just service it, not repay the principal.  The average household with credit card debt has a revolving balance of $15,788.  Credit card companies and consumer lending organizations help facilitate over indulgence by enabling people to borrow beyond levels that they can reasonably pay — zero down mortgages anyone?   Further, credit card fees and adjustable rate mortgages penalize low wage earners who do not have collateral or the track record to get the most cost effective credit or refinance.  Reign in credit and you increase accountability, you also reduce a regressive economic force in our society thereby narrowing the  wealth gap.   Cheap credit also creates asset bubbles which influence our economic cycle to the negative when they burst.  Finally, the fees that would no longer be going to pay for monthly interest charges could go to actually paying the backlog of unpaid taxes ($300 billion annually).  When you care about your country, you actually don’t mind paying your fair share for what it provides you.

If we boil this down my Rx for America comes down to restoring our nation’s pride.  Pride in yourself, your family, your role in your community, your role in society, and your ability to positively impact the economic system.   Pride that comes from doing an honest days work and receiving a fair and honest wage in return.  Pride from doing the right thing for society by accepting responsibility for your own health and actions.  Pride in paying your own freight.  Pride from the fact that your elected officials actually represent your interests.  From pride comes trust and from trust comes a sense of purpose that extends beyond the individual and to the collective.  Together we can move mountains.

Pie in the sky?  In totality yes, but saving our economic system a trillion dollars annually is not easy.  If you look at each of these issues in isolation, they are winnable battles.  Win them all and you save America.  And no I am not running for office.

/bryan