The movement is growing. Yesterday thousands of people came to the streets of New York in support of Occupy Wall Street after major labor unions voiced their support. [1] AFL-CIO President Richard Trumka even provided three very specific demands for a movement that has been criticized for being vague as to its goals: Wall Street must invest in creating American jobs, foreclosures must be stopped, and problem mortgages must be written down.
I would like to make three proposals as well, though these will be more in the nature of a general policy shift in American domestic politics. They are:
1. The enactment of tariffs specifically for the purpose of protecting American industry and jobs. This is an idea that is anathema to the members of the free trade cult, but the middle class will vanish from the United States unless the practice of moving manufacturing and other productive jobs out of the country is disincentivized. Companies will go where labor is cheapest if the profit realized by doing that isn’t eaten up by tariffs aimed at such practices.
Such a policy could also be better for workers in other countries if tariffs are set at rates partly based on wages paid in those places. Most businesses throughout the world will want access to American consumers, and if paying cheap wages doesn’t help them accomplish that there will be less reason to do it.
2. A national banking system that fosters productive enterprise and commerce in goods rather than speculation. The recent crisis should teach us that investment should be directed toward activities that will enhance production rather than gambling on arcane securities. The emphasis of our economy should be on the producer rather than the trader. In this connection, strict limitations on the sorts of instruments of indebtedness there can be should be enacted. Wealth should not be a reward for skill in betting on the production of others, or the commodities produced by others, but for the production of useful goods.
Restrictions on commodities trading would be a part of this. After producers, shippers, distributors, and retailers what else is needed? The terms between these can be handled by private contracts. The current system does nothing but enrich those who produce nothing, and provides a means where such people with sufficient resources can actually manipulate prices.
3. Liberal federal spending on the national infrastructure with an eye to enhancing commerce. Business cannot operate at maximum efficiency if such things as the means of transport or delivery of energy are in poor repair. In this connection transparency is key. A good job for the Secretary of Commerce would be to ensure that such spending actually serves the general welfare, rather than political donors or the parochial interests of powerful members of Congress.
These ideas are hardly original with me, and they certainly are not part of the program of any leftist group. They are taken from the principles of the American School of economics that was championed by Senator Henry Clay in the first part of the 19th century. [2] Indeed, the protectionist aspect of these proposals go all the way back to Alexander Hamilton, the first United States Secretary of the Treasury. [3] The American School was implemented by Senator Clay’s admirer, Abraham Lincoln, and his successors, during the period between the 1860s and the 1940s. That was when the U.S. became the world’s leading manufacturing economy, accomplishing that with the protection of high tariffs.
These proposals, taken far enough, might dispense with the need of Wall Street traders altogether. But who will miss them when they’re gone? It should not be considered a national tragedy if they ultimately have to find honest work.