Considering the latest unemployment figures, it is particularly important to ask from where the incumbent Democrat leadership is taking their action cues. The recent Jobs Summit festively held at the White House appears to take its cue from the Soviet politburo. This may not be by design, of course. It may simply be a consequence of the dominant political party in America attempting to create a top-down command economy.
Now, back in the Soviet Union, there was a ritual in the politburo that preceded any major directive. The ranking members would declare, “Comrades! Let us go forth and build communism!” The junior members would respond “Yes We Shall!” Then the ranking members would unveil plans for a complete, self-contained industrial facility, and the politburo as a whole would vote unanimously to devote state resources to its completion.
This sort of top-down command economy was put into operation in the 1920s to industrialise the Soviet Union. Entire cities appeared out of nowhere. Soviet engineers built an exact replica of Gary, Indiana on the Siberian steppe. Even the streets were laid out in the same pattern. The industrial super-center called Magnitogorsk (magnet mountain) created a quarter of a million jobs in a place inhabited by a few hundred nomads.
Now, back at the White House, the jobs summit invitees immediately broke into six groups vying for attention from the hosts for their little projects. As The Politico reports,
Corporate titans said they wanted Obama to lower the corporate tax rate. Union representatives suggested the government create more government jobs. And a teacher’s union representative urged the feds to build new community schools in rural areas. Obama touted several of the suggestions that came out of the White House brainstorming session — including tax incentives for job creation, improving the credit markets, and use community colleges as training centers for employees. “Some of them I think we can translate immediately into administration plans and potentially legislation,” Mr. Obama said.
The gathering preceded the expectation of further job losses in the American economy; fortunately, only 11,000 job losses were reported, although its not clear if these figures incorporate the questionable claims of “jobs created or saved” coming out of the Stimulus program. The Democrats especially focused attention on turning national resources toward their own pet projects, such as Green Jobs creation. One session of the Jobs Summit was devoted exclusively to expanding this sector. As the Associated Press reports,
Obama also dropped in on a group looking at job creation tied to spending on the nation’s aging infrastructure. He told participants he believed a number of “tensions” made development of green jobs difficult, including a struggle with Congress on legislation to combat global warming, the federal government’s limited ability to invest the billions needed and the short-term push to create immediate jobs that might clash with long-term environmental initiatives.
The biggest tension involving green jobs is that they are unprofitable at the moment, and cannot compete on the open market with traditional industry and energy. Economists are divided as to whether green jobs are economically viable once a fully developed infrastructure is in place. And clearly, the only resources to pay for this infrastructure must come from the American tax-payer.
Still, the top-down command economy model was solidified when the President urged attendees at the Jobs Summit to build on successes:
He cited the success of the administration’s Cash for Clunkers program, noting that car companies carried much of the marketing responsibilities that helped make the effort so popular. Home improvement companies like Home Depot would be key as partners in any future jobs program focusing on energy efficiencies.
Cash for Clunkers is a perfect example of the top-down command economy in its infancy. In this case, the Cash for Clunkers program was economic activity based entirely on the American tax-payer, a transfer of wealth and resources from tax revenue through multiple bureaucracies and ultimately benefiting off-shore industrial complexes such as Hyundai and Kia.
A total of $24,000 per car was spent by the Democrats’ pet program to get a person to sign a loan for a new car they likely could not afford. Only $4,000 of that amount went to the incentive. The other $20,000 went to administrative costs and to junking an otherwise good vehicle.
Two benefits came out of Cash for Clunkers: the Democrats got a “roaring success” to propagandize, and the Chinese government got millions of tons of steel as an interest payment on all that U.S. debt they own. America’s taste of Magnitogorsk may have been palatable, but not particularly digestible.
Well, today Gary, Indiana and Magnitogorsk are like identical twins separated by thousands of miles. They are eery clones of one another: burnt-out wastelands, brownfields, abandoned tracts of factory buildings slowly returning to the elements from which they were raised.
Gary fell as the American economy turned away from heavy industry. Magnitogorsk fell because the top of the command economy fell before it. When the directives from the politburo failed to fill in the massive trench between Magnitogorsk’s operating costs and its useful industrial output, stalled factories became the norm.
At least Gary’s ex-workers were able to integrate into America’s growing service sector, while the city itself has rebounded by reinventing and repurposing its town spaces in a sort of renaissance; Magnitogorsk’s factory workers still receive a reduced state salary just for keeping the aging furnaces warm, and the whole edifice stands on the wind-blown Siberian steppe, patiently awaiting another directive from the politburo.
There is a stark lesson to be learned from the Soviet Union’s model. The top-down command economy cannot function without front-loaded waste and abuse. And, it is ultimately doomed to failure.
Unfortunately, the Democrat party with its natural affection for a top-down command structure is unwilling to learn the tough tasks. America’s largest corporate executives, the same guys who financed the Democrats’ stunning victories in 2006 and 2008, were pleading for a little elbow room in the new economy. But it seems as though the Democrats are ungrateful for their help. And that’s because getting out of the way of America’s independent drive for success, progress, and enlightenment is not on the Democrat agenda.