Sunday, June 21, 2009

Recipe for America

The American economy is in a mess. And it is directly impacting the lives of many, many ordinary Americans. Jobs have been lost and value of assets has crashed. People are looking at a scenario which is unprecedented. Many don’t have a clue on how to react to the situation. As a result, free advice is pouring in from all parts of the world. And here are my two cents on what America should do to get back in shape.

But before that, let us first spend a few minutes on analyzing the situation. My opinion is that the average Joe has been suffering from the complacency of affluence. Over the centuries, Americans have kept improving their standard of living. Comforts and luxuries are being taken for granted; they have become more of a right than something that you actually earn. Not having the money to afford them is hardly a problem. Don’t have money in the bank account? No problem. Use your credit card!!

My reading of the situation is that citizens of once the most enterprising country have decided that they have progressed enough and are ahead of most of the other countries. Now is the time to enjoy the fruits of your grandfather’s labour. No need to work hard, no need for a higher education…..just enjoy life.

Americans strive to keep manual thoughtless labour completely out of their lives. Build machines to get the labour done, outsource manufacturing and services to other countries, just consume the goods that you have come to “deserve” by virtue of just one thing – being an American citizen.

Just look at any job where manual labour is required and you will get my point. American taxis are horribly expensive. Want to get a haircut? Pay through your nose. Why are counters at airlines, baggage check and malls all populated by African-Americans or Asians?

Next, let’s look at higher education. Dropout rates are legendary. And higher education is so expensive that not many would simply be able to afford it. The moment you decide to quit studying, you immediately reduce your chances of getting a decent job with a fat pay. The only way to earn money would be to get into a trade a small business or a low paying job. But that is something that one doesn’t want to do, right? There are lesser mortals ready to do it, so why bother. Just focus on enjoying life. The bigger television, the faster car, the more spacious home.

Someone once told me that America is on the path of becoming the thought leader of the world. People will spend their time (and earn money) just thinking. They would be masters in the subjects of design, ideating, brainstorming. And they would leave the execution of those ideas to the third world nations.

However, in reality it is not that simple. Civilizations have routinely gone through cycles of prosperity and downfall. Look around and you will see many complacent peoples coming down very rapidly from the peaks of prosperity.

The solution is very evident. First and foremost, America will have to change its attitude towards work. No work is too small. Work never erodes the dignity of a person; in fact it gives dignity. But for that, one will have to reduce the premium that one charges on work. And for that to work, the overheads will have to reduce.

One of the biggest costs – that of real estate is already going through a severe correction, so that should be removed from this discussion.

The other thing that needs a lot of work is again related to the attitude towards work. People do not sign up for work till all personal compensation related issues are addressed. 401k, health plans, dental plans(!), the works. I am not saying that you open up yourself to be exploited. But for Pete’s sake, get real.

And this is one area where the administration can really chip in. Encourage people to open up their own businesses by reducing the license fee and other costs for setting up a business. Change zoning laws, get businesses closer to the residential areas so that mom and pop stores can thrive. Come down heavily on frivolous consumer lawsuits that scare the people from providing decent products and services. Make it easier for people to offer a haircut for a lower price and a cheaper cab ride.

The next thing big thing that needs to be taken care of is education. Especially higher education. I simply don’t get it as to why it should be so prohibitively expensive. Sure, large campuses and star professors add to the cost. Can one not look at smaller campuses which are more in an “economy” mode? And till the time the education costs go down, edu-loans are the only ones that people should be encouraged to tig thing that needs to be taken care of is education. Especially higher education. I simply don’t get it as to why it should be so prohibitively expensive. Sure, large campuses and star professors add to the cost. Can one not look at smaller campuses which are more in an “economy” mode? And till the time the education costs go down, edu-loans are the only ones that people should be encouraged to take.

We all know that the human spirit is unbreakable. Faced with any hostile situation, it usually finds a way of surviving – even thriving. Americans will bounce back faster than the world expects. The good thing is that there is a very competent President running the country at the time of this crisis. His initiatives are in the right direction; his emphasis on education, reducing health costs, etc are all moves in the right direction.

However, at the end of the day, it is up to the citizen to take the initiative and make sure that this results in a faster bounce back. The world is watching.

1 comment:

Vishwanath Seshadri said...

Very well written blog, Saar.. I completely agree with your analysis and recommendations for America !!

Though I doubt if America will come out of this very soon.. It will need many many years of hard work and re-orientation to restore past glory.. Military prowess is not just sufficient...

Basic values of life - work hard, consume less, save more etc. will have to be imbibed by every citizen of any nation...