George Bush's Economic Strategy is a Disaster
Foreword April 25, 2003-I wrote this article before the Iraq War in Feb 2003, and noted that G.W. Bush's strategy of supporting democracy in the Middle East, was a correct policy, while his erroneous economic strategy is putting the U.S. and the world, at risk, and in fact helps the pre-industrial obsolete forces, as people cling to such backward forces, even in the Middle East,, when they see the collapse of new economic sectors and technologies. Now more than ever, it is really urgent to look at this issue, and to emphasize the need for the Bush administration to change its economic strategy, and to adopt bold initiatives such as 100Meg with interactive services to the home, that is noted at the end of this article, before the new economy and the rest of the economy to suffer more. The noted Audio interview of UCLA Anderson's economist Ed Leamer, is still an excellent assessment of the current situation.
It is now over two years of failed U.S. economy and the government is the most to be blamed for this failure, and yet President Bush comes up with yet another meaningless plan, trying to create tax cut for dividends, as a stimulus for U.S. economy. Many critics write that dividends are basically what the rich gets, and this tax cut will improve the income of the rich. I would say even if it was not just the rich, still reducing a few dollars from the taxes of consumers is not going to do anything for this economy. What difference will it make for this U.S. economy, if the consumer has 100 dollars more to spend a month, when the problem for over two years has been the business spending. Some top economists have already examined the details of President Bush's stimulus package and I do not need to get into more details:
Basically the current economic crisis is caused by businesses not spending, and this trend started even before 911, and surely long before the uncertainties and escalation of US-Iraq conflict. With Bush coming to office, many businesses who saw the coming U.S. administration not to be pro-high-tech economy, stopped planning for high-tech transformations of their businesses, and thus reduced spending on high-tech equipment and services, and the reduction in CapEx (Capital Expenditure) has been continuing for three years now, and this is what has caused the downturn, and the trend is continuing by more reduction in CapEx , followed by more layoffs and reductions in overall high-tech growth which has affected the rest of economy as well.
Two and a half years ago, at the time of US elections, I wrote that if there was going to be one single reason for the voters to vote for Al Gore, it was Gore's plan for expansion of the Internet, and the last three years has proved how true this assessment was:
A year later, I was hoping that George Bush would borrow from Al Gore's economic plan, after seeing the failures of his economic strategy, a strategy which is basically protecting and focusing on old industries such as oil, rather than strengthening the new economy, but President Bush did not correct his mistaken economic strategies of the last two years:
The current economic situation in the U.S., is a disaster, and the pioneers of the new high-tech economy in the U.S., who were the ones leading the growth, not only in the U.S., but in the whole world, first experienced this downward disaster at the centers like Silicon Valley of California, but the disaster has since spread to the whole world economy one day to the next. The U.S. government should change its economic strategy before it is too late.
As I have explained before, changes in the Middle East, for more progressive and more democratic states is a positive development:
But not only the above changes will not solve the economic problems of the U.S. and global economy, on the contrary, not fixing the current economic situation in the world, can cause a backlash in the Middle East and elsewhere, as people will cling to the most backward states, to shelter themselves from the economic catastrophe, and this will give more support to reactionary anti-globalization trends, by those who blame the current economic failures, on the growth of global information economy, rather than putting the blame on the obstruction of growth of global information economy, by the wrong government policies of the last two years:
It is time that the U.S. government and President George Bush at its top, to change their economic strategy, and to come up with a strong pro-high-tech economic initiative, and execute as fast as possible, before this catastrophe gets worse. Even governments like Germany and Russia are seeing the importance of the post-industrial economic sector for their country and the world at large, while the current U.S. administration is struggling with economic strategies that were obsolete even twenty years ago:
For example the government can start bold initiatives such as 100Meg Internet connection to the home, providing connectivity for thousands of TV channels for every household, as well as Audio and Video interactive channels. South Korea now has higher percentage of fiber to the home installed than the U.S. Time is running out for the U.S. and global economy, and a futurist strategy for world economy is what is called for, to get out of the current impasse, a strategy supporting the post-industrial information economy.
Sam Ghandchi, Publisher
February 22, 2003