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Univ. of San Diego School of Law

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Friday, November 7, 2008

Take the Handcuffs Off the Economic Recovery

A month ago, who would have thought that the Bush Administration would order the partial nationalization of the nation's banks to fix credit markets and support the economy? Maybe other innovative, even "radical," ideas are in order. Unless we come up with new ideas to sell cars and durable goods to fire up the economy, collapsing domestic auto sales threaten tens of thousands of jobs.

In addition, the recession will cause shrinking government revenue at every level. Even last spring 18 states were predicting reduced budgets in FY 2009. Unless new revenues are found, we will soon see the furloughs and wholesale firing of teachers, nurses, and emergency first responders; closed schools, libraries and hospitals; crumbling roads unfixed; and broken bridges closed to traffic.

Cliches about the auto industry's problems blame workers' and retirees' health care costs and management for making the wrong kinds of cars. But to sell cars we need to abandon cliches, old myths, and the blame game.

Consider these facts. Last year we had 2.3 million Americans in prison and jail. How many American cars did these men and women buy last year? That's right, none. That 2.3 million is about ten times greater than the 250,000 prisoners in America during the auto industry's glory days of the 1960s and 1970s. There are another 8 million Americans who got a felony conviction for possessing or selling drugs in the last twenty years. With their convictions, these people rarely have jobs. They don't have a legal income and they don't have credit.

The economic effect of more than ten million American adults who can't buy cars, houses, furniture, appliances, or other durable goods is like 9-11, Katrina, and every other hurricane combined. Even with a job, many are without a credit card and are shut out of the marketplace. From Ticketmaster to Amazon.com to the local shore store, American businesses are losing sales. Economically, our criminal justice policies are cutting our throat. [Mark Godsey]

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