Economic Health Requires Revolutionary Change (Part 3)

Few suggestions for dealing with the recession are based in reality.  Just ignoring all the problems won’t make them go away, and throwing money at them without a long-term plan will increase the national debt without addressing the underlying causes.

The United States has lost more than 3.2 million factory jobs since 2000. That total excludes jobs that have been lost in other sectors and more than a million that have disappeared so far this year.

Experts predict that this downward trend will continue as 6100 retail stores close by the end of the year and another 14,000 in 2009. War veterans are returning home to find that they also have joined the ranks of the unemployed. Employers in every sector are announcing more job cuts daily. Many displaced workers have moved into lower paying jobs in the service sector, which also is beginning to shrink.

With or without government assistance, the auto industry will be forced to shed still more jobs as the rising unemployment rate decreases purchasing power throughout the country. Lenders will continue to limit access to the credit the industry needs to sell its products.

In light of these facts, recovery plans must focus on creating jobs that pay a living wage and leave room in household budgets to pay for emergencies and save for luxuries. Without those jobs, the economy will continue to collapse, and there won’t be enough tax revenues to repay the escalating debt.

We must also correct the imbalance in financial and human capital. The U.S. Department of Commerce Bureau of Economic Analysis says the financial services industry, including real estate, accounted for 21 percent of the gross domestic product (GDP) in 2006. Businesses related to the auto industry currently account for another 4 percent and 1 in 10 American jobs. The housing crisis has reduced employment in financial services. Expansion of public transportation and competition from foreign automakers could further reduce auto sales

New policies should attempt to save as many jobs as possible without postponing inevitable contractions in certain areas. If those policies don’t point us toward the future, America will be left behind in the global economy.

Chinese officials are recruiting unemployed workers from the financial services industry to help them move forward. Even medical professionals are losing their jobs in this economy, and will surely join the exodus. Still more are voluntarily leaving patient care because the stress and expense of caring for chronically ill patients is destroying their personal lives. This talent pool cannot be replenished overnight.

The return to a focus on providing necessary services is the solution. By enacting aggressive reforms in business, education, and health policy, the incoming administration can save jobs, create new ones, and save money at the same time. In addition to the suggestions in my first post on this subject, here are new ones that could move the country in the right direction:

Offer microcredit loans through the Small Business Administration (SBA). Large corporations will never be able to absorb all the displaced workers.

Enlist the help of Teach for America to prepare some displaced workers and business leaders to change America’s schools. This organization has an excellent reputation for quickly retraining people from a variety of backgrounds to teach America’s troubled youth, who are dropping out of school at an alarming rate. A well-trained workforce is essential to meet the demands of the 21st century. Our educational institutions prepare students for 20th century jobs that no longer exist. Teachers placed through Teach for America have a two year commitment, with the option of staying put if things go well. That will give them time to find other work if they discover teaching is not a good fit. With wisdom forged by real world experience, workers and leaders could help shape education programs that include courses in entrepreneurship, the backbone of the American economy. After school programs staffed by this new force could also provide relief for cash-strapped parents.

Increase funding for college work study programs. Displaced workers will need income as they develop new skills to reenter the work force. Overworked instructors could also use extra help from disciplined, motivated students who have real life experience.

Work with labor and business leaders to create policies that reduce stress, the main cause of chronic illness. Balance pay cuts and increased job security with frequent breaks, onsite adult and child care, onsite health care and fitness programs, flexible hours, increases in paid personal leave, continuing education, and other perks that increase productivity, reduce the need for higher wages, and make companies more competitive. Businesses that have adopted such polices have saved money on health care costs and increased productivity.

Dramatically increase payments for preventive health care. Treatments for advanced chronic illness are costly.

Pay family caregivers. According to Medical News Today, about 34 million caregivers provided about $375 billion in free services to family and friends last year. These caregivers often leave their jobs and neglect their own health to provide full-time care and delay or eliminate the need to place their loved ones in nursing homes.

Ask patients and leaders in medicine to suggest immediate practical changes for Medicaid and Medicare. Both programs spend more money trying to save money than it would cost to just cover some services. These ridiculous practices are driving many doctors to refuse patients serviced by these programs.

Incorporate natural medicine into mainstream care. Patients and professionals alike are finding that natural protocols often work best with chronic illnesses, especially in the early stages. Bastyr University in Seattle has received several research grants from the National Institutes of Health (NIH) and operates a clinic that offers alternative medicine services to the public. Doctors of functional medicine also claim dramatic results with their holistic treatments for chronic diseases. When combined with preventive care and changes in Medicare and Medicaid, the savings could reduce the budget enough to pay for universal coverage and save millions of jobs.

Unless some new disaster rears its ugly head over the next week, my next post will address practical long-term solutions to domestic and foreign policy challenges.

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Jacqueline Laurette Jones is author of Unmasking a Diagnosis: How to get Help for a Confusing Chronic Illness Without Filing for Bankruptcy.