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Letters of importance

Education Economics

This letter (and like letters) I sent to Senate members Barack Obama (D-IL) and Richard Durbin (D-IL), two Congress members and to the Chicago Tribune.

Good day. I am a student from Chicago living in Roskilde, Denmark and I have seen a form of economy, which seems to be more stable and has secondary benefits for the population and I want to tell you, fellow Americans, about this economic policy.

America is part of a world market, which has had its ups and downs. We all remember the tech bubble of the 90’s and the loss of jobs to India where a college educated work force remained untapped and required little wage. America has been hit by this and has reacted with trade policy, restricting import of certain products from India in order to compensate its Trade Balance. We have seen up and down figures on interest rates due to Monetary Policy, controlling the interest rates on loans to encourage people to invest in companies and firms, which lead to our beautiful tech bubble which burst. We have watched the Exchange Rate on the US Dollar go up and down relative to other currencies, swinging the price of imported goods up and down while our American products remained the same. Bush’s Finance Policy of tax cuts to encourage companies to increase production and employ more people has this unfortunate effect of damaging our Trade Balance, seeing money go out of our borders while we buy imported goods which are cheaper than made in America thanks to Inflation. We have been lucky to strike the balance we have, but how long can it hold?

There are many types of economic policy, but I haven’t covered one form yet; Infrastructure Policy. To be precise, Infrastructure Policy deals in the roads, rails and ports we use to ship products; logistics; the regulations which limit the market to what it is allowed to do and what it isn’t; research into new technology which we sell to other countries; and lastly, the education and training of our work force. Infrastructure Policy is geared towards the ability to do the job no one else can do. This isn’t limited to industry; financial services also attract banks and corporations looking for a host country. The most important part of this policy, which is used to attract and invite companies to set up base within our borders, is education. When we talk about education, we talk about training our work force so it can do what no one else in the world can do. This attracts specialized production and a specialized job market from across the seas. If I take an example of an economy geared towards highly trained job markets, I can point to Denmark. With education almost fully supported with few exceptions to career fields by the government, people here are highly trained and attracting companies looking for a well-trained work force. Denmark competes by offering quality first. India competes the same way, but has a cheaper work force all the same.

America can also compete through education, but this would require a sharp raise in taxes to support the reeducation of the population. The reeducation of people without high school diplomas, the further education of people with a high school degree (two or four year college degree), the reeducation of homeless and unemployed for a new job market. It will take courage and determination. People can be trained to use machines for certain jobs which normally take a large work force, such as cleaning a factory floor, replacing the large work force of cleaners with one or two men using a machine they are trained to use which lasts a decade. Or training office cleaners so they know what they are using does and are able to do a better job of cleaning an office. This lowers overhead and is good for the trade balance. Although the reduction of people needed for any given job is a loss of jobs, these people could be trained in another field such as welding or mechanics, attracting industries such as ship wrights. The creation of jobs would be needed just to jump start such an economic plan; training teachers to teach a large population. Teaching people in economics, training them to be accountants and economists will attract companies looking for good financial services, creating jobs. This work force can also be exported to other countries without the loss of tax revenue; did you know US citizens living abroad still must file for income tax? Fair enough because the US has agreements with most countries to avoid double taxation of its citizens, so there is no loss to a US citizen. But this plan requires more than training people to certain trades, it means better funding of universities making college degrees more accessible for high school graduates. A high school degree is a dime a dozen, but a college degree is competitive across the world.

As I was saying, reducing the number of people needed for any single job also results in higher unemployment, but this can be considered an export product if they are trained. Exporting our excess work force keeps more people in employment without raising inflation and destroying our trade balance. I think it is worth looking into. Possible benefits include the possible lower demand for products at home because the export of our work force results in fewer people to buy goods. This raises the amount we can export, which is a benefit to our trade balance. Lower unemployment at home means lower cost of welfare, which is an overhead.

After the economic benefits are accounted for there are also the secondary benefits from better education; hope for a future. Many young men join gangs because they feel they have no other choice in life. They see themselves as gang bangers, trouble makers and murderers. They are lacking an education and everyone has given up on them. Why not give these young men second chances? Give them hope for a better future and put them into the work force. Let them earn a clean living which provides better for them than robbing, drug dealing and pimping. This isn’t just an economic plan, this is a social plan for America, one which takes courage and determination to see through. So what say you? Do we have the courage to change the future?

Best regards. Chicagoan living in Roskilde. iPyramid@gmail.com

Reply to letter

It seems Barack Obama has replied to my letter (or referenced part of it) in his pod cast. In the start, he calls education a tool of economics, something I said in my letter to him. Yaaaa!