Episode 68: The American Heathcare Act of 2009

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Healthcare is the hot button issue in today’s politics. Both sides have very strong opinions on the topic. Those on the right say “if you want health care so bad, buy it! If you can’t afford it, tough nuggets! “ Those on the left however say “Access to health is a basic right, and a nation as powerful as ours should be able to provide that service to all citizens.” Both sides however, agree that a great deal of reform must be done.

So the argument really boils down to basic liberal vs. conservative principles – the constant need to ensure a high standard of living for all, vs. the constant need to ensure a high standard of living for those who’ve earned it. Both sides raise very valid points, as well as some… let’s say not so plausible ones. In the end it all boils down to money. Liberals tend to want to use money to serve as many people as possible (which is falsely interpreted as socialism) while conservatives want to maximize personal wealth (which is falsely interpreted as selfishness and greed.) The problem with using money to serve as many people as possible (especially during a recession/depression) is the finite amount of capital in the coffers, which can only be made up in tax increases (since we can’t cut too many programs because we “need” them). The problem with amassing personal wealth is capitalism. It is the nature of capitalism that for one person to amass wealth, someone also has to lose wealth. Also, many people become addicted to making money, and do so with little to no consideration for others. Outlined here is the crux of the problem.

But enough pandering to both sides of the argument… this is the L Comment! And here at the L Comment, I like to come up with solutions to big problems because we can point fingers at each other all day and not move an inch. So without further ado, I present my new bill (I believe my third) The American Healthcare Act of 2009! This is the ultimate healthcare plan that will make everyone happy.

To begin, why are republicans so disgusted with the idea of public health care? Two reasons – cost and quality. Any other argument is a subset of the aforementioned issues. Anything that involves increase a tax, republicans hate it. They also fear losing options because the government will swallow up big business. In my bill, government healthcare and private healthcare HAVE to coexist.

Article 1: All Americans are guaranteed $3,200 worth of medical services per year

By utilizing a healthcare information technology (IT) network, each American will be entered into a national healthcare database. (Put you Ayn Rand books away, if you have a social security card, then you are already in a database!) This database would include your healthcare chart, family history chart, other relevant healthcare info (such as current prescriptions) as well as a healthcare credit. Each citizen is guaranteed $3,200 in free medical costs per year (this number is derived from the $960 Billion dollars already allocated for healthcare - let us for argument’s sake take Obama at his word - divided by 300 million, the rounded up estimate of legal American citizens.) At the end of the year the debit would reset to $3,200. Thus, if a person used all the money, they’d get it all back on January 1st. Likewise if their debit was at $3,100, the system would only add $100 on January 1st.

This money would go towards paying for basic medical services. Without insurance today, it costs about $750 to get a checkup. Since most people go to the doctor twice a year, this essentially would give a person 2 checkups and two visits, with money left for free medicine (prescriptions and over the counter). The goal is to provide some kind of assurance that one could go to a clinic, not an emergency room, to treat an illness because they know they can see a doctor at a clinic if they need to. For people working in government jobs, they could qualify for a Public Premium Plan (PPP). With a PPP, An employer adds an additional $9000 per year on the premium, which would give that individual $12,200 of coverage per year. This saves businesses about $3000 a year per person in health insurance costs. For private enterprise, they can offer their workers a Private Enterprise Plan (PEP). A PEP works just like a PPP, except they cannot participate in both a PEP and private option. Also, a PEP can chose a from a few more packages - $5000, $9000, or $12,000. If a private enterprise wanted to go with an all public option, they could with the $12,000 PEP, but since the public package offers nothing but healthcare credit, it is not always advantageous for private enterprise to use a public plan. Smaller businesses could use the $5000 PEP to save money, while still adding a little more assurance.

Article 2: Credits can be reallocated between family members

Family members can pool their credits together. Divorced couples can only pool money together with written consent. Thus in a family of 4, a family has $12,800 worth of healthcare credits (which is the avg. price of healthcare per year.) Children who claim dependent status (or after they turn 25) can no longer be included in the pool. This allows a family without private insurance more flexibility with doctor appointments and access to medicine.

Article 3: Non basic healthcare is paid for through loans

For anything larger than basic coverage and medicine, such as a surgery, the public option would involve using a loan process nearly identical to student loans. With the Stafford student loan, the government subsidizes part of the interest and puts a cap on the maximum interest rate (as of July 1st 2009, it went from 6% to 5.6%!) If you have an injury that requires a surgery and do not have private insurance, you can pay for your operation by taking out a government loan, which will also cap the interest rate and subsidize a portion of the loan. Congress can debate on the actual cap %, though 5.6% seems fair to me. The person can choose from several payment options: a 6, 12, 24, 48, 60, or 90 or 120 month payment plan. Obviously one should pay as soon as possible to avoid paying a lot of interest, but a 120 month plan could bring a loan to a very small and manageable price per month. Like the Stafford loan, a person can change the payment schedule or pay the loan in full immediately without penalty.

Article 4: Private Healthcare still plays a big role

Notice that I use the term private healthcare quite a bit. I do think that it is important to maintain a vibrant private healthcare system, because our version of capitalism enforces high standards through competition. All citizens are guaranteed $3,200 from the government, but it is not enough in some cases, namely if you have a chronic condition or a major surgery. Thus, it is still necessary to buy private insurance. There will be a lot of private insurance reform, namely eliminating the denial of coverage due to pre-existing conditions and usage of generic medicine to save costs to name a couple, but the majority of major healthcare use will still be through private insurance. Private insurance companies will be required to be in the same medical database, largely to maintain a uniform system of record keeping and medical chart updates. Unlike the public plan, private insurance could offer many perks, such as a deductible for surgeries rather than taking out a loan, discounts for brand name medicine, and coverage for special operations, such as gastric bypass surgeries. However, under the new system, the public plan is built to coexist with the private plan. By offering a guaranteed $3,200 for basic coverage, that is money that the private insurers don’t have to spend. This can bring premiums down by that much money, lowering monthly payments for those already on a private system. Or they can budget the same amount of money to offer more competitive packages.

Article 5: Americans can choose their own doctor, or keep the one they have

Because the public plan is only a credit, there are absolutely no restrictions on which doctor one can see. For people using a PPP or PEP, they have maximum choice in the doctor they see because of the amount of credit they have to spend. People on private insurance are bound by the rules of their contract. Because of the complication of being able to choose your doctor under the public system and then having restrictions with private enterprise, I think private insurance companies will allow one to see any doctor. Also, with medical records being stored in a database using a universal protocol, there is little reason not to let one chose their own doctor anyway.

How much does it cost?

The price tag of the plan is 960 Billion. This will cost the taxpayers no money and it will not add to the deficit. In fact, it is 40 Billion cheaper than the proposed plan. The money for this plan comes solely from the reallocation of the funds for the current healthcare budget. Given our population is under 300 Million (because illegal immigrants do not have social security cards, they do not qualify to receive any funds.) To pay for the loan subsidies, revenue from the rollback of the Bush tax cuts will be used, as well as accrued interest on healthcare loans (money gains from healthcare gets reinvested back into healthcare). Over time, the costs will start to decline, as most people will not use all of their credit in one year. We should see an all around reduction in price because government offers basic services that private companies do not need to spend, and the number of people using emergency rooms as clinics should sharply decrease.

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If you are on the left, you like this bill because: it offers every American citizen a piece of mind. It seems impossible to fund a full blown healthcare program without raising taxes or cutting a significant number of programs. However, because all Americans can get basic needs met and essentially get free medicine which does include over the counter medicine too, this act is a foundation for a universal healthcare system that is uniquely American in operation. As we pull out of the recession and look forward to better economic days ahead, more tweaks can be made to the system, like increasing the amount of credits per person.

If you are on the right, you like this bill because: you have to admit the idea of a little piece of mind that doesn’t compromise the already budgeted monies and costs nothing for you is a good thing. Moreover, healthcare remains in the domain of the private insurance industry. There are far better perks to getting a private plan that using the public option for credits and loans. In time you can find ways to streamline the process further to save even more money, such as further reform to reduce operational costs to lower the annual healthcare budget. However, and most importantly, this is in no way a government healthcare plan. The government is limited by the extent to which they can pay for health services, so a “government takeover” is no possible in this proposal

I submit this bill to you, readers of the L Comment… what say ye?

Episode 67: Sarah Palin Resigns? What?!

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Sarah Palin never ceases to entertain. In the early days of this blog, I’ve spent a good amount of time bashing Palin because she is the worst kind of leader this country could have (by which I mean she is ignorant, uninformed, lacks intellectual curiosity, and lacks the culture to thrive in a national or international stage.) My guy won, so I saw no reason to continue the Palin bashing, and I was getting bored ding so anyways.

I hop on Facebook today only to find a bunch of links about Palin’s resignation on my feeds. Was this some kind of joke? So I read NY Times, Fox News, WSJ, and a few other sources, and lo and behold it is indeed true. Her reason? Because she can have a larger positive impact if she could travel around, presumably to raise her stock in 2012.

Sarah Palin are you crazy?! Do you realize being a governor is like being the president of the state of Alaska?? You have the perfect forum to show America your leadership skills! Take a stand on the economy, and sign legislation that sticks it to Obama’s face! Enact trade deals with Canada for oil and generic medicine to save your citizens some money! Use your executive power to travel across the country and speak with other governors… see what works in other states and how you can apply what you learned in Alaska! There are so many ways you can innovate and prove your mettle in Alaska, that one could only assume that you either still think the far right is going to get you into office or you simply have no sense whatsoever. Either way, I want you nowhere near the oval office. I can’t respect a politician who would abandon her people in the middle of an economic crisis to raise her own political stock. Absolutely absurd.

So much for my preliminary thoughts on this… it could change after more info is released, but I strongly doubt it…

Episode 66: A Tribute to the King of Pop

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I wanted to wait until more facts came out before writing this, but it seems news surrounding Michael Jackson will take weeks, even months to decode. This is the first celebrity death that has really hurt me. Michael Jackson is unquestionably my favorite pop musician by far. As a composer and producer, I have dissected his songs to uncover exactly how he makes such sonic magic on almost every single track. He was a major inspiration for many of my productions, especially when I first started. Looking at all the documentaries and Jackson movie that has been on a constant loop since his tragic death, I can’t help but feel a big hole in my heart.

Michael Jackson literally is the father of modern pop music. Every single act following him from Madonna to Justin Timberlake and everyone in between is an iteration of a Michael Jackson innovation. Multi-million dollar music videos? Grandiose live concerts? Provocative dance moves? It all started with Jackson. While Will Smith tried to capture lighting in a bottle with is multi-million dollar videos, Britney Spears tried to create the entire pop package with her videos, catchy beats, and out of this world live concerts, and Chris Brown tried to captivate his audience with some of the best dancing ever seen, no single artist other than Michael Jackson was able to successfully do it all.

I offer to you Michael Jackson, my four song salute – of all the many tracks I have put on repeat countless times, these are the songs that I have played the most! (It was originally three but I almost forgot one that I played 1000 times when I as a teenager!)

#1 “In the Closet” (Dangerous album) – The dangerous album was my first favorite album. I was in… 7th or 8th grade at its release and that is the age kids start listening to music. The breakdown on the pre-chorus still gives me goose bumps, and his “ahhhhhh (there’s) something about you baybeh” is so smooth. It is not his most popular song (though the music video got a lot of people’s attention) but it is by a good margin, my favorite song.

#2 "Give in to Me” (Dangerous Album) – Though many people will mention their favorite songs from the Thriller or Off the Wall albums, I grew up with Dangerous, so these are the songs I sing in the shower all the time! But Give in to Me was so eerie; I love how he switches from a desperate moan in the verse to full unabated anger in the chorus. This is the first Jackson song I memorized the lyrics to, and also the first pop song I learned to play on the guitar.

#3 “Liberian Girl” (Bad Album) – This song has one of the smoothest melodies know to man. In fact the notes he sings in the line “Liberian Girl,” that musical structure has actually come to define my style of composing! (When he says girl, he doesn’t resolve the note… in music this is called “suspension.” This technique has become the cornerstone of my writing style.) It is also the song I used to practice singing harmonies. In the chorus “Liberian girl/You know THAT YOU came AND YOU changed my world” The capitalized notes is the same type of suspension, but he resolves right away on the word “you.” It is my FAVORITE musical motif ever. Thanks Michael =)

#4 “Dirty Diana” (Bad Album) – Man does this song bring back memories! In junior high school, a friend who was as big a MJ fan as me used to sing this song with me everywhere… waiting for the bus, kickin’ our game to the ladies, and most memorable, at a school field trip to Great Adventure where, using 20 oz. soda bottles for microphones, we sang this song, dances moves, air guitar, and all, to anyone who’d listen… and drew a sizable crowd! Michael Jackson has sings this song with such a perfect delivery and also wrote yet another great melody! Also, this song marries the song and lyrical structure of the Blues with 80s Rock n Roll in a way no other artist could do it.


I will miss you Michael Jackson. I have stuck by you from the good years and the bad, and as long as there is a device capable of playing music, your legacy will continued to be passed along through my speakers! I could not help but well up a bit writing this, but they are tears of sorrow for losing my favorite artist, and tears of joy and gratitude for bringing me years of memories and musical guidance.

Michael Jackson, you are the best… may you rest in peace.

Episode 65: The Scoop vol.5

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Hello and welcome to the scoop, a recurring post where every 13 episodes, I write three mini posts on topics I find interesting in the news. Why every 13 episodes? Well The first scoop episode was written for episode 13, so I thought it’d be fun to have a recurring theme. We’ll be continuing with the “Road to the 21st Century” series in the next post.

Minding Your Own Beeswax

Obama has come under some heavy fire from the right and even from some on the left about his reaction to the Iranian government with regards to the protest on the recent election. I think Obama is 1000000000% correct on his approach to the situation. We are not the global police department, and the people of Iran should be free to exercise their revolt free of influence from any country. Who meddled with our affairs during the Civil Rights movement? No one. We were free to beat the crap out of each other, spray people down with fire hoses, boycott busses, shoot college students, assassinate the leader of the movement, and send out the attack dogs into big crowds, all in the sake of fighting for one’s civil liberties to recognized under law. And because we were free to do that, we were able to evolve to the point where we elected Barack Obama. The Middle East will NEVER be solved with militaries or political posturing, but with spirited revolt like we’re seeing now. The Iranian people need to fight this battle alone. Now of course, if this becomes a situation where they are putting citizens in gas chambers, well of course we have to step in. But it is Americans constantly sticking our noses in places where it doesn’t belong, all in the sake of moral superiority that really pisses off other nations. I’m glad Obama has the good sense to “see how it plays out.”

Yet Another Reason Why Public Health Options is a Good Idea

Brave Captain Sullenberger, used all the skills in his arsenal to safely land the passengers of US Airways Flight 1549 in the Hudson river that fateful winter day. He is a true American hero, humble and incredible modest about his amazing feat. It was the feel good story to kick off 2009… until now. Some months after the event, it dawned on the people of that flight that “hey! Our luggage, wallets, laptops, important documents, and personal belongings were in that plane too and they are now at the bottom of the river!” In such a case, one would make a claim to the insurance company to reimburse their lost possessions. Not in this case. US Airways’ insurer AIG refuses to pay out insurance claims. Why? Because the insurance company claims that in order to pay claims, there has to be negligence on the part of the airlines. Captain Sullenberger was anything but negligent.

Here is a more relevant story, about how private health insurance companies screw over their customers. This is what big business does!!! It is not about your health, or providing you coverage, or insuring that an emergency surgery won’t send you to the poor house. It is 100% about making profit, using human life as commodities. It is absolutely disgusting. What big business does is horde money so they can increase the size of their wallets at other people’s expense. Insurance companies try like mad to pay as little money as they possibly can, your illness be damned. I am always up for debate on the particulars, but I stand firmly on my belief that there should be a national healthcare plan to avoid crap like this.

Proud to be an American!

USA beat the #1 ranked soccer (yes SOCCER!) team Spain to advance to the FIFA championship! I imagine that it must piss off countries when we win in sports Americans don’t even like that much! In America, soccer is one of those sports that’s awesome until senior year of high school. If you’re good, you play in college, but by then football and basketball is more fun to watch. So while I’m far removed from the sport now, I’m happy about the win because I played goalie on a championship team in 6th grade, and when I play the EA Sports FIFA 2010 demo for PlayStation 3, I can use USA as my team, since demos only give you the teams that go into the championship game. I have no reason to shell out $60 bucks for the game now!

Episode 64: Preliminary Thoughts on Healthcare

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This one will be short and sweet as I just want to post a quick reaction to Obama’s speech on healthcare. Personally, I’m thrilled that he is making a serious commitment to a revamped healthcare policy. I am 100% for universal healthcare, and the plan he laid out today makes a heck of a lot of sense to me. I was keeping a rough tab on the spending cuts he wants to make in order to realize his bold plan. Isn’t this the very thing conservatives have been saying all along, that Medicare and Medicaid were crippling our healthcare system? Aren’t these the kind of cuts the exact kind of thing they wanted all along? Isn’t the conservative plan to create a system to end the inefficiencies in our current healthcare plan? Obama addressed these things in the speech and Republicans are still shaking their fists.

The problem here has nothing to do with the practicality of Obama’s plan and everything to do with conservative ideology. It doesn’t matter how useful or important a government program is, if Uncle Sam’s face is on the logo, they don’t want it. What most people fail to realize is the government programs is not the failure, it is the practitioners. Our schools don’t suck because it is a government program; they suck because the nation by and large is using an obsolete educational model. There are great teachers and great schools, but the great results are localized. The truth is the free market school system isn’t much better. Sure the quality of education may be better, but in terms of retention and comprehension, the numbers are about the same as public school education.

I’m personally sick and tired of the free market crapping all over people. If you are uninsured, going to the doctor for a simple checkup costs more than taking a college course, more than round trip airfare from New York to London, more than nice dress suit, and many other things. How is this right? Pre-existing conditions? Even if you are insured, you may not get the coverage you need because the insurance won’t cover it. I know of a few people who filed for bankruptcy because they had a major emergency surgery. Even an ambulance will hit you for a few grand. I like the framework, and I’m excited to see how it shapes up in the coming months after rigorous debate. So I will submit to you dear reader my thesis for the upcoming post on healthcare (probably Episode 66 or so): A nation’s wealth is not only determined by its GDP, but also by its standard of living, their health, their educated workforce and the gap between the richest and poorest. Healthcare in many ways ties all of the aforementioned elements together. Those are my thoughts… more to come soon.

Episode 63: Education.edu Part 2

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“Road to the 21st Century #1 – Reinvest in Human Capital”

The next few posts will be part of a series called “Road to the 21st Century” where I will outline my ideas on how to get our country back on track, mainly focusing on the long term strategies for building a successful economy that this “bubble and bust” proof. Because manpower is critical to any successful economy, I thought we’d start right at the source, education. Thus this post is a continuation of “Episode 54: Education.edu.” In that post I laid out my educational philosophies, so rather than rehash them, give that one a quick glance over, and fell free to add anymore thoughts to the comments.

Our Competition for the best minds

Let us begin by examining who we are up against for the best minds of the 21st century. In one corner, you have China. China’s success in becoming an emerging power is largely due to two factors: they are communist, so the government solely dictates the direction of the country without pesky things like individual freedoms, and second, they have historically embraced education, considering the military class as the low class. I’m sure the playing field is a bit even for the two groups these days, but China’s embracing scholastic endeavors makes them a step ahead of us on the road to the 21st century.

Our other competition is really the rest of Asia, whom we can lump in one big category. Japan will continue to be the electronics capital, Singapore the communications capital, and Taiwan is posing themselves to be the computer manufacturing capital. Where is America in this equation? Sadly, we are absent. Because we have become a nation of consumers, the spotlight shifts to the companies who are making things. Because we are not consuming these days, we inadvertently leveled the playing field in our favor. I do not consider Europe to be much of a threat right now. They are more our partners than competitors, and though they are leading on technologies in green tech and telecommunications (though Apple is giving them a run for their money), many of their inventions are only viable once they hit the US market. I suspect this is mainly due to Americans really being the best consumers in the world, and their more socialist tendencies make it harder to reward great innovation.

It Begins With the Babies

In order to rebuild the American workforce, we need to start with the babies. Yes, the babies. By which I mean pre-school education. Kids have a super incredible brain for the first 9-12 years of their life. Their neural pathways have not been set yet so they can pretty much learn the basics of anything you throw at them. I have seen 11yr olds who are completely trilingual (English, Spanish, and Chinese). I have seen 9 year olds with a great baseball swing. Any kind of repetitive task they do, they swallow it up until about age 12, when the neural pathways are set. Then, they spend the rest of their life refining their skills palette. In order to rebuild the new workforce, we need to invest in early childhood education. I believe that it should be a requirement for one year of preschool. In this year, they would learn the basics, shapes, colors, the alphabet, etc. That way they can start with grammar and phonics in kindergarten. This would essentially put the students a whole year ahead of our current system. I am in a minority of people who believe this, but we should teach both English and Spanish in preschool, and then a third optional elective in junior high school. Most every child in any other country can speak two languages; I believe we should do the same.
The free market can play a big role here. To alleviate the costs of preschool education, and make a transition to a required program, we can utilize the already numerous preschool institutions that exist rather than building new schools.

Obama’s Outline for Elementary, Secondary, and Higher Education

Once out of preschool, I believe education should largely remain in the public domain. Obama has budgeted $135 Billion for education. He hasn’t fully addressed this issue yet, so let’s talk about what he has said thus far. First let us remember that a lot of this money does go into teacher training. As I have argued, many teachers do not seem to be prepared to educate the new breed of student who is fully immersed in technology. Second, the money is going into increasing teacher salaries, which I believe is very fair, since it is one of the toughest jobs out there (bias placed aside here). Finally, a large portion of the money is going into rebuilding projects to repair and modernize schools with new computers, science labs, and learning centers. The rest of the money should be delegated by the states.

While states should have the say in how to run their school system so it is in line with their budgetary needs, there needs to be a national standard. The lack of a national standard makes it nearly impossible to benchmark states against states, and our country against the world. In music, we have national standards, but they are optional, and are not required in the lesson plans we submit to administration. This is a BIG problem. Without a standard, education is a free for all, and students from different states receive unequal education which defeats the purpose of a public school system. For example, I am a New York certified teacher. Because NY has some of the toughest education standards in the country, my certification is good in most every other state. Florida on the other hand has some of the weakest standards. By implementing national standards, all the students and teachers should be on the same page, ensuring the entire country is well prepared for higher learning.

Obama has stated his belief that all students should attend at least one year of technical school or higher education. While this shouldn’t be required, I also believe that it will become a prerequisite for most every job in the 21st century. I argued in the previous post that ideas are what will be most valuable in the new economy and manufacturing will largely be deferred to Asia. Thus a college degree or technical certificate would give the new workers of the future specialized skills to perform building tasks. I believe that instead of manufacturing goods, the workers of the new economy will be building lots of prototypes. Thus a failed auto industry scenario is impossible because a worker wouldn’t be manufacturing only one thing; any building project that requires special knowledge of photo-voltaic cells would have a worker trained for that task. The demand for specialists means they would earn a higher wage, and that there should be some kind of work awaiting students upon graduation.

Closing Remarks

Preparing our country to compete in the global economy requires investment in the American people. We need to increase the educational standard, and economically incentivize getting an education. It is becoming less and less of a choice as we progress anyway, as jobs that require no education need a high school diploma or GED. Jobs that needed a high school diploma need a bachelors, and so on. With a new teacher workforce, and employing the educational philosophy discussed in Episode 54, and following through with Obama’s vision for education, I have no doubt that the next generation of students will far surpass the output of the rest of the world. We have the brains, the motivation, and the competitive culture to make it work. All that is missing is a foundation commensurate with the 2sy century.

Stay tuned for the final part in the Education.edu series “Free Market vs. Public Education”

Episode 62: The New Economy

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The economy is messed up. Really bad. And it is never going to come back – at least back to the way it was pre-recession. The jobs that were lost in all likelihood won’t be coming back anytime soon at best, or more likely, never again.

In order to fix this problem, we have to approach the economy like a business would, by simplifying and diversifying. How do we do this… first we have to put our American ego aside for a bit. I love America as much as the next guy, and think our country is the greatest country since sliced bread. But we can’t do it all. It costs way too much money to do it all. I agree with conservative opinion when they say programs like healthcare and education are exorbitantly expensive. And while I 100% agree with Obama’s vision, I cannot logically deduce how we can make it happen, at least within his timeframe. With the lack of debate on Capitol Hill, my biggest fear about progressivism is coming to light – without true conservative dissention and debate, progressive thought is like a runaway train. The last major progressive movement, the civil rights movement, took 10 years and three presidents to be realized. What most progressives fail to realize is you have to give a little to get a lot. Giving a little, when it means asking people to sacrifice what they don’t have (from Obama’s speech regarding GM) while noble, and the absolutely right thing to do, is a wholly unrealistic proposition. Here’s a plan to get ourselves back on track, using Ideas borrowed from a great book I read by Daniel Pink called “A Whole New Mind.”

We Need To Simplify Our Economy

I believe an economy is built upon three parts: developers, builders, and distributers. America is the world leader in developing the most innovative technologies we have. Over the years we have deemphasized on building – aka. The manufacturing sector – and are pouring billions into bailing out that industry. Finally, we are the leaders of getting that technology and innovation to the people because our Constitution is arguably the least restrictive with personal freedoms and freedom to access. However, trying to take the lead on all three factors is incredibly expensive, especially considering how complicated the modern economy is. I argue that America should play a more cooperative role in the global economy. Rather than lead the world economy poorly, we should instead focus on one aspect, development.

In Pink’s book, he argues that the next revolution will be the information revolution, and that it is innovation, not manufacturing that will bring us the jobs of the future. I whole-heartedly agree. The new economy is going to consist of innovators and entrepreneurs. Private enterprise is the key to revitalizing our recessed (depressed) economy. Thus the government’s role should not be to endlessly prop up old businesses, but provide funds for new business. We need to get our best minds out in the forefront, creating the enterprises that the rest of the world will use. However, we will not be the primary makers of this technology in the new economy.

In the new economy, we will defer manufacturing responsibilities to developing nations like China and India. They have the manpower (both with over a billion citizens) and drive to become global leaders. However a manufacturing based economy loses money over a course of time, because as the manufacturing process becomes more efficient, and technology becomes smaller and faster, it becomes cheaper to produce. Idea – intellectual property - - has incredibly high value. Consider Apple Inc. The iPhone itself is not what makes Apple its huge profits, it is the intellectual property. It is the smooth touch screen interface, the app store, and the innovate architecture that makes its profits. Before the iPhone, there was no product of its kind in existence. The actual manufacturing of the iPhone is pretty cheap. China makes a knockoff iPhone that is nearly identical to the original that costs only $50 brand new without a contract!

How does this simplify our economy? We pour in resources one aspect of the economy, and save money by outsourcing the rest, while at the same time, dramatically increasing our revenue. What does it do to people in manufacturing now? Well, naturally, they will lose their jobs, the way they are now. Thus instead of endlessly propping up old businesses, the government should focus on helping these displaced workers retrain to perform the jobs of tomorrow. Instead of manufacturing, which I consider the mass production of goods and services, the blue collar working class of yesterday becomes tomorrow’s engineers, specializing in the development of new technologies. Thus the old assembly line worker is now specializing in building prototypes which require a specialized knowledge. Because there would be a high demand for the specialists, these jobs would pay higher wages.

Over the long term, I’m calling for the shrinking of the working class. Of course there would be some room for the working class as it is today, but under my plan, there would be a massive expansion of the middle class. The ultimate result is the average American could legitimately live the American dream without having to resort to subprime mortgages to emulate a lifestyle they could not sustain. All the while we are creating brand new industries, and improving existing ones at breakneck pace. This leads to part two of the new economy, Diversity.

Diversity Ends “Too Big to Fail”

With increased emphasis on development, there will be a lot of competition for the best idea. I am a firm believer that American competition is the single most important reason we have the #1 economy in the world. When someone in America has a great idea, our version of capitalism rewards one for it with a huge bankroll. When other companies vie for the best version of that great idea through competition, the consumer wins and the industry wins.

What is missing from the economy today is diversity in competition. AIG was pretty much the only insurance company performing the tasks it performed, so in failing, they would single-handedly bring down the economy with them. With an emphasis in development, there is inherently many players in the game who are finding ways to things better, faster, and cheaper, while still maintaining high quality. Thus is should be the responsibility of the government to legislate and enforce tough regulation to ensure that there is an equal chance for every company to succeed. One government department I think does a good job with good regulation is the FCC.

In the Digital Millennium Copyright Act for example, the DMCA “issued six exemptions to the DMCA last year, one of which allows consumers to unlock their cell phones "for the sole purpose of lawfully connecting to a wireless telephone communication network." (source: http://www.engadget.com/2007/08/24/know-your-rights-is-it-illegal-to-unlock-my-iphone/). Though the legislation is kind of open to interpretation, the idea is that so long as one unlocks their phone (modifying a phone to allow it to access multiple compatible networks) for the sole purpose of connecting to a wireless communication network, they are protected under the DMCA because it promotes competition. This is precisely what regulation should do: stay out of the way enough to let businesses grow, yet create rules to promote fair competition and just punishments for breaking the rules. With the big field of entrepreneurs and regulation that promotes competition and diversity, a “too big to fail” scenario cannot exist. Though corporate Darwinism will be alive and well, the constant flurry of new ideas will protect us from another AIG meltdown.

In order to simplify and diversify our economy, the single most important the government can make is in education. We NEED to completely overhaul out education system for this plan to work. Without an academic class, none of this can happen. I fear if we keep on our current course, we will be stuck between eras, and it will only be a matter of time when we are overtaken by Asia, namely China, who is already positioning themselves to capitalize on our economic catastrophe.

Love him or hate him, Obama is well aware of this notion of the new global economy (though I suspect he’d disagree with my thought on manufacturing to some extent). Conservatives may call him fool hearty, and there is much debate on whether he’s doing the right things in the right order, but don’t think for a second that Obama isn’t preparing America for the long term plan.

The next few episodes will consist of a series of posts I call “Road to the 21 Century. In these posts I will outline what I believe America needs to do fix the economy, and secure our lead as the #1 economy in the country, starting with education, which will be part two of “Education.edu.” Grab some popcorn and bring all your friends to these debates because I think as a blogosphere we can do what politicians are not doing: debating the hell out of these issues and perhaps we can find a way to get our middle ground consensus to Washington. Lofty? Maybe, but I enjoy a good challenge!