Well, the job numbers suck and the only thing that is surprising is that anybody is surprised. This blog has said over and over, we have fixed nothing and we are just standing around waiting for things to get better. Meanwhile states are laying off more and more workers so disposable income is dropping. Said another way, we are implementing our own austerity program here and expecting different results than we see in Europe. And people are surprised the economy is going nowhere?
I listened to a reporter on MSNBC tell us that if all the automatic cuts take effect, you know as part of the deficit reduction package the Republicans are demanding, then the economy will really suffer as money is taken out of the economy. Then she feed us the pablum that it was both sides fault. Really? Who wants to give tax cuts to the wealthy, who I might add are hanging on to their money, and eviscerate government spending to pay for it? Who will not allow any new revenue? Who killed the Jobs Act? Who benefits from a poor economy at election time? This woman is a moron and she represents the problem of the conventional wisdom of the Beltway Press. See Mann and Ornstein’s new book, It is Worse Than It Looks, putting the finger squarely on how the Republicans are the problem.
But putting all the blame game aside, who has a plan for the future? Well we know the Republicans do not since they simply have proposed going back to the good old days of Bush except they promise to end government as we know it to pay for all their tax cuts. Isn’t it amazing that more than half of Americans cannot see this reality? Meanwhile the Democrats, ever timid, offer us Republican lite. Neither solution looks at what we know or should know about what reality is and has told us.
It is almost mind boggling that we have not examined our basic assumptions and then adjusted accordingly. So here is what we should know but are ignoring and they are just two simple facts that if we understood them, could fix all our problems:
- There has been a mass transfer of wealth from the many to the few and the nation as a whole has declined. There are multiple studies that show that when the few gain power and control the system, the country and its economic status decline. That is where we are today with the plutocracy of the very wealthy. They game the system for their benefit and we all suffer. Worse the have left the middle class with insufficient income to sustain the economy. When all the spoils go to the wealthy, who is going to buy the stuff their companies make, the Chinese?
- The whole analogy of the home budget as applied to our economic system is wrong (our economy is not a microeconomic system). When everybody tightens their belts, the economy declines. So the whole austerity thing will not bring out the confidence fairy and spending will resume. What happens is that our total economy declines and our debts just get worse. See Irving Fisher circa 1933 and see where we or Europe are today as real time examples of these policies. Companies are sitting on trillions of dollars and they won’t spend them creating jobs because (forget confidence) there are not people with cash to buy things. Only the government is going to create that demand in our weakened state (See Depression 1929).
Once you accept these facts as facts, then there is a path forward. And here is what is really critical: What is the accepted wisdom that we must game the system with what is politically feasible must be thrown out. There is only one way forward and if the political system won’t allow that way (the exact situation we are in today), then the system must be changed by standing up and showing that the comprromises simply won’t work. No more Republican lite, and no more compromises with failure to look bipartisan for the undecided middle. It is time to point out why these policies and compromises would fail and be firm about our path forward. Remember FDR’s famous speech where he welcomed the hatred of his opponents? He understood that compromise was failure for the country and they had it wrong.
So what are we up against to get there and turn our country around? Well I think if you really want to see where facts challenge ideology, watch this clip of Paul Krugman elegantly taking apart the arguments against him on austerity in Europe until he finally exposes the bottom line which has nothing to do with deficit, but an ideological hatred of government action: http://www.bbc.co.uk/news/business-18281669
What is most amazing is we are watching Europe and the Euro collapse under their failed austerity program and they don’t care and won’t change course even when facing the obvious failure of their policies. Well welcome to the United States of America where Republicans and their imminently worse policy of austerity for everyone except the wealthy is widely accepted, and where we can’t seem to grasp those two simple facts presented above even with all the mounting evidence.
We are no longer the greatest country in the world and we are in decline if we can’t push ideology aside and react to what reality is telling us. Or more simply said, if we can’t simply do what works anymore. Watch Europe bicker when the fix is obvious and then realize we are emulating their behavior. To me it is just criminal that we have wasted the last four years not rebuilding our country and putting our citizens back to work with the lowest interest rates and cost of material and labor we will ever see, and when we finally see the light it will be too late.