How Do We Get Back To Hiring?

Understanding HOW we get back to hiring mode is, unhappily, not as simple as understanding why they stopped in the first place. The human I referred to yesterday who fell into deep water is easily treated. Towel him down, light a fire, dry his clothes and get him to shelter.
Doing the same for a corporation is a tad more complex. 1) Simplest way—everybody go out and buy something, buy lots of things. Not so likely. Ten percent are unemployed and a good share of the remaining 90% are scared to death. (They watched their neighbor’s house get foreclosed or his car repossessed. Huh uh.) A lot of them aren’t working full time.
What’s two? Extend credit madly. Raise the limits of those whose credit card limits got cut recently back up to where they were and beyond. Loan to small businesses without regard to credit worthiness. Open lots of new accounts.
Isn’t this where we all came in? Plenty of banks are already sitting on bundles of paper that may or may not be worthless (they don’t want to know in many cases). They have no desire to add to their risk right now. Many of their credit card customers no longer have any way of repaying. Nor can they borrow on the equity of their underwater homes.
Let’s go on to three. The Fed could print more money, lots and lots more money. (They used to call paper like that “watered stock” back in the Nineteenth Century when they sold stocks and bonds that had no value. Remember Fisk and Gould?)
Just how long do you suppose a dollar would be worth ANYTHING LIKE a dollar today? Might give you a short fever burst of buying power, but then—probably sooner rather than later—comes the kind of inflation that turns your retirement fund into a week of groceries.
How about four? We could default. Sorry China, Japan, Europe, Saudi Arabia—can’t pay you. We’re tapped out. We’ve done that before. On occasions we’ve all but bankrupted several large national investors from Europe—1819, 1837, 1857, 1873 and ’77, and 1891.
Not a good idea—and morality or honor has nothing to do with it. Right now, one of the reasons we Americans live so well is that we are the reserve currency for the world. You buy oil in dollars and a lot of other things as well.
Default and the dollar all but goes away. It has the value on the international market of an Argentine Peso or a Greek Drachma (which traded for the euro at 340 to one in 2002). That’s going to seriously impact our lifestyle—especially those of us who have a taste for foreign foods, foreign built cars and tools, etc. Unbelievably.
Is there a fifth? War. Big war. Like the really big one that ended the Depression of the 1930s. Be warned—not every war is economically beneficial. They have to be fought on somebody else’s property, you have to win it decisively, there has to be something you can take home afterward that’s worth real money.
World Wars One and Two qualify—for us. They RUINED Russia, Germany, Japan, France, England—destroying the Turkish and Austrian Empires as well. We were the only ones who lucked out. We didn’t do as well in Vietnam, Korea or Iraq (which merely cost us money).
You’ve GOT to make money out of a war. That’s a rare trick. G.W.Bush talked about paying for Iraq with oil revenues. That hasn’t worked out at all. A huge percentage of all wars are money LOSERS. No guarantee that a war—anywhere—is going to bail us out as it did in 1917 and 1941.
Six, you can turn on the Federal spigot and build tons of roads and bridges. We do need them. But the 1930s teach us that the moment the faucet is turned off, everything goes right back down again.
Can somebody come up with seven? I don’t hear it coming out of Washington or Wall Street—do you? Getting back to 2007 levels of employment (when corporations feel safe and warm) may take a long time this time—no matter how many job conferences we hold.