I think we are missing the point.
The old system is broken. Let's talk about that.
There are arguments about what to do to help ease the burden of the current recession. The Democrats want a stimulus package that includes $850 billion package, the Republicans want more tax cuts. It's the same debate we have been hearing about for the last 30 years. Yet, it seems to me that something much bigger is really happening right now. There is a change that is much bigger than stimulus spending or tax cuts. It's the Internet.
The Internet has totally disrupted our traditional economy. It is wreaking havoc on traditional industries. Having worked in the travel industry back in the 90s, the change started immediately with the introduction of the Internet. Travel Agencies started going out of business. Now, one can argue it was the loss of commissions on sales of tickets that started it, but as soon as on-line agencies began to replace the corner travel agent, the final nail in the coffin was in place.
Travel is not the only industry where this disruption has occurred:
1. Newspapers - going out of business
2. Music Industry - total disruption of music distribution
3. You Tube - you can watch anything and everything and be entertained for free
4. Airlines - who wants to fly when you have webex or gotomeeting
5. Automobiles - who needs a $30,000 car when you can work from home now.
6. Retail - why fight traffic at the mall, when you can shop on-line
7. News - traditional 1/2 hour news has never been the same
8. Microsoft - Open Source is killing their business
There is a lot more going on in the world economy. The stimulus packages and tax cuts are not the solution to our problems right now. I think first we need to understand that we are going through a major change in the global economy that is being driven by the Internet. Traditional industries are under pressure because they want to continue to be faceless corporations in the age of information. Customers may know more about their products or services than they know about themselves because people are talking about them.
The case of the automotive industry. On the whole, the majority of Americans do not have much sympathy for US automakers. They have watched as the industry has not really done much over the past 30 years to change its ways. The Union is unwilling to change its behavior and management is unwilling to change its ways either. Why do their competitors have fewer labor-management problems? GM needs to shed its Generous Mother reputation.
We need a wholesale restructuring on how we do things. We need a complete overhaul of our tax system. It is not just tax cuts, it's a total redo on the taxes. Let's go with a flat tax on income, or consider a tax on services. We need radical change that will remove our individual self-interest to more collective self-interest.
The big nameless corporation is dying. The age of the Entrepreneur is here today. The Internet is driving this new age. People have to change their ambitions from getting jobs to creating jobs. Or, understanding that they have to take a more proactive role in their employment. The age of hiding behind your job is over. People need to understand we live in a global economy, not a local economy. Education needs to be part of the culture, not the pariah it has now become. Everyone needs to participate in education, not just teachers and students.
Throwing money to treat a mortal wound, or cutting taxes without cleaning the wound before it is treated, will not save us. We need real change. We need a radical approach. First, we need to recognize that we are entering a new economy. Let the old one die.
