"But, specifically, what changes need to be made?
We need a change of thinking in corporate America. Globalization and the fear of having your lunch eaten by the Chinese has made ‘shareholder value’ the be all and end of running a company. It is in the DNA of most of our CEOs. We need a shift where company leaders look at a balance between shareholders, customers, and employees. I guess that is a moral revolution.
Short of that, the government can do things both to promote growth and to give the working and middle class a better shot. The right structural changes need to be made. First, we need to look at the things that are overhanging us. Making even a down payment on our long term budget problems is key. Fixing the social security system should be a top priority. And, of course, we should means test. So rich people shouldn’t get social security, even though they paid into it. Once we show we can get something done, confidence will pick up.
Second, the government needs to help get people employed. Here’s a sad statistic: 9% of 25-55 year old males are on disability, up from 2%-3% from 20 years ago. Of course there are people on the list that are disabled. But many are just chronically unemployed. We have a whole lost generation. It’s not unlike the Hobos during the depression era. These men never got jobs; never got married; never have a reason to build a nest egg. That’s the really scary and depressing thing. The best way to spur employment is to get the business community to believe you’re on their side. Its why blaming is such bad policy. We need to unleash the pent up capital and creativity."