It's not snowing in Cleveland Heights; in fact, it's not even raining. We dodged a predicted front carrying freezing rain last night, and woke up to dry streets. Which is good for driving, but it leaves winter in northeast Ohio looking drab. Trees unadorned, with neither leaves nor snow, amount to little more than dirty sticks reaching to a grey sky. Which is why I offer as an alternative to un-lovely reality, the image above; an open field after a winter storm, taken near the Chagrin River about this time of year, but in 2007.

Open Another Bottle Edna, I'm Reading the Neiman-Marcus Bill

The newspapers this morning were heavily laden with economic ruminations. The New York Times Magazine's cover story was a contemplation of the sins of the marketplace leading to the crash. It read like the broodings of a jilted spouse -- where did we go wrong? Can I have another chance? I can change -- just tell me how. The remorse may be genuine, but even as the spirit shows its' willingness, the flesh yearns for the fleshpots of old.

Meaning? Meaning that while New Year's Eve is long gone, somewhere on Wall Street, the call has already gone out, to put a few magnums of champagne in storage, (away from the prying eyes of the Treasury Department should corporate accountability become one of governance's new year's resolutions). There are still bubbles out there somewhere in that great stimulus package in the sky. And I'm not talking about tiny bubbles either...Don Ho can have them. I'm talking about some nice big bubbles, to toast the good old days.

In days of old, there was a crash. Not like this one, true, but it seemed like a big deal at the time. It followed the bursting of what was called the "techno bubble," a realm of ill-defined "cyber-space," filled with investor cash and much hot air about future earnings. Fortunately, when it burst, the only people really hurt were the Silicon Valley Porsche dealers. Most everyone else went on as usual. At the edge of the catastrophe however, was big money, waiting for the dust to settle so the game could resume. Almost immediately, the big money began looking to real estate funds or hedge funds or...whatever. But not to worry, real estate has always had such a soothing sound, and everyone knows that home values always go up...and besides, the big money players all have MBAs so what could go wrong? Slowly the balloon began to rise, drifting in the sunshine toward that still distant horizon of a 36,000 DJA.

According to Ted Strickland, the governor of my state of Ohio, to get this next balloon off the ground is going to cost somewhere in the neighborhood of a trillion dollars...it makes you all squishy inside just to say the word. We have only recently gotten used to saying "billion, with a B," to show that we are talking about really big money. Now we are going to have to break in a whole new letter. Mind you, that's only to bail out fifty state governments. It leaves unbailed most of the automobile industry, and whatever financial institutions have not yet choked on wads of government-supplied liquidity. And all of the poor, of course, who unfortunately, are not too big to fail.

While the mighty of the economic machine may be living in fantasy land, agog at the prospect of all the cash suddenly floating around, none have been so foolish as to suggest that anything other than a new balloon is in order. It does occur to me however, that some tinkering with the machinery is called for, This economic catastrophe has demonstrated, not for the first time, that when the mighty are at play, it is the meek and modest of the earth who get hurt.

So what am I suggesting? Nothing short of heresy. When an economic machine has the ability to pursue vigorous growth, it is usually - indeed probably always - because we are prepared to neglect the needs of the poor and the working poor for a living wage, and affordable health care and housing. When I began my work life in 1962, the minimum wage was $1.10. It was enough to provide a high school student with pocket change, but I wan't tempted to try raising a family on it. Fourty-seven years later, at $7.00 an hour, you still can't. The result? A class of people known as the working poor who typically can't afford to feed, clothe or educate a family, or get them to a doctor when they are sick. A low minimum wage, high enough to maintain a consumer economy, but not high enough to cut into all of those golden parachutes we have all heard so much about, is an effective strategy for strong economic growth. It promises lots of opportunity for investment capital to seek out all the many nooks and crannies that hold the butter and marmalade, but little opportunity for those holding on by their fingertips to get a better grip.

Imagine a society in which the law requires that everyone who exploits the available labor for business purposes, is required to pay all employees enough to live on. Enough to put food on the table, pay for medical treatment, own a car, own a home, and own the furniture in it. It would cost a lot more than $7.00 an hour, and I am afraid it would slow down economic growth considerably. It would force the economy to get real; to stop promising investment capital that returns of 10%, 15%, 20%, etc., can be had in an economy with a modest 2-3% of real growth; but not if you also must pay the people who work for you enough to live on.

So, my wish for 2009? Tiny bubbles, or maybe no bubbles at all.

DHL

image by DHLarsen: Meadow - Chagrin Reservation - January, 2006 11 x 30