On the Contrary

As I watch America go off the rails, one of the primary causes is that the solutions we are demanding to our problems are the wrong ones. We seem to be unable to really look at a problem in any rational way that is not tainted by politics and philosophy. The latest flap over the tragedy in Libya is a case in point. We want to point the finger of blame instead of understanding how we made an error that got four Americans killed. You see this behavior all the time in crime and punishment in the United States where if we just get revenge in our justice system, everything will be in balance again.

I have friends who just hate the Federal government. Look at all the stupid things they do they say. Government is just simply bad in their minds. But having served in the Federal Government most of my life, I know this is just not true. While we do some very stupid things, we don’t do them whimsically, we do them because there is a long history of how we got there, most of it being a reaction to some abuse and corrections demanded by the same people who then lament the bureaucracy. My point is not to argue whether government is good or not (self-evident) but that if we really want to fix a problem, we have to understand what caused it.

That brings me back to the very dangerous period we have entered into in the United States where at least in the Republican Party, solutions have to meet very strict ideology standards. Couple that with the he said/she said world we live in, devoid of critical thinking intervention, and we have a whole segment of our society that has created an alternate reality to what is really happening. And their solutions will make it worse because they don’t address the fundamental problem.

There were two interesting news stories today that made that point abundantly clear. The first was an article, Standard of Living is in the Shadows as an Election Issue, which was about us not really talking about what is the driving issue. But within that article were a couple of “facts” that show how we are attacking the right problems with the wrong solutions. First our average family income is down 8% since 2000 when it began to decline steadily. Kind of shoots holes in the Obama caused it thing. Then the article goes on:

“The recent stagnation has also led, economists say, to confusion and even scapegoating about the real sources of the problem. The causes that can seem obvious, and that often shape the political debate, are not necessarily the correct ones.”

It points out that scapegoating immigration for loss of jobs does stand up to the data and in states like California where there are larger populations of immigrants (legal or otherwise) income growth is faster. Go figure if you are a Republican.

But the best example comes from an op-ed in the NYT (The Austerity Trap) about Mitt warning that our prolifigate spending ways will send us down the path of Greece.

“What is more disturbing is that the comment displays willful ignorance about the lessons of Greece, and such ignorance can only lead to bad policy decisions at home. The lesson that should be learned from Greece is that its fiscal mess has been made far worse by severe budget cuts….If governments push ahead anyway with deep spending cuts, the result is only more economic weakness without the hoped for budget improvement. That has been the case in Greece and other nations of Europe, like Ireland, Portugal, Spain and Britain. If Republican policies to slash government programs while excessively cutting taxes were carried out here, the United States would experience a similar effect.”

Global warming also comes to mind, but enough. The point is that we want to find blame, scapegoats, and in the process we are going to make things much worse until we take a more reasoned and rational approach to our problems. This will not happen with the current crop of Republican ideologues who think taking us back to the 19th century and making women subservient to them will solve all our problems. What is truly frightening is that the polls show they have an even chance of doing just that if we don’t get out and vote. Need I say more?

Postscript: More Data to prove my point while the majority of Americans rush headlong in the wrong direction: The Economic Consequences of Mr. Osborne

Actually I can’t blame austerity on just the Republicans,  Well maybe I can.  Austerity is that wonderful idea that if things are tight and we are a little over extended, we have to tighten our belt, reduce our expenditures and pay down our debts.  Make wonderful sense in a family budget (microeconomics) but is a disaster in macroeconomics.  It is probably why most people think it is intuitive.  Take any country that has gone on a major austerity program.  The idea is that with more balanced budgets the confidence fairy will sprinkle confidence dust on investors and businesses and they will expand, producing more income.  Except they don’t.  What happens in a depressed economy (that thing we are all in right now) is that governments cut way back, it depresses the economy (I think that is why they call is contractionary monetary policy) and GDP falls more and things just get worse.

Take Greece.  They were way overspending and their economy was faltering.  So they must be punished!  Live within your means, right?  So in order for the country to survive since it can’t devalue the Euro on its own and make its goods and services more competitive with Germany, the answer was to gut government spending so that there would be “confidence” in the government and borrowing cost would go down until they could start growing out of their problems.  Except it didn’t.  As the government guts spending, the economy contracts, GDP falters, and guess what?  You need to borrow more to stay afloat.  The same has happened in England, Ireland, Portugal, and Spain.

Think of it this way.  In your little family budget or small business, if debts get out of hand, you need to cut back so you can pay them off.  Austerity works.  But if your income is dependent on how much you spend then if you cut back and your income falters, you are a sinking ship.  Welcome to macroeconomics which apparently many very serious people, as Paul Krugman calls them, don’t get.  Well by now they ought to because the data is overwhelming that austerity does not work.  Meanwhile the Europeans do another deal to “save” Greece and almost nobody believes this is going to work anymore.  I guess we are just waiting until all the dominoes fall before we change directions.  Oh, by the way this is Keynesian 101 which the Chicago School of Economics said was dead and they have been wrong about just about everything else and yet we still listen to them.  Go figure.

Meanwhile in Talking Head Land gas prices are up and according to all the Republican mouth pieces this is because of President Obama.  Except it isn’t.  Do they understand we are on a world market for oil?  Here is one for your little minds Republicans:  In the last four months we were a net exporter of oil.  That’s right.  We produced more than we used.  The market is being driven by speculation, you know, that wonderful market place that can do no wrong in your eyes. We can produce all the oil in the world, but it won’t help us because it goes on the world market.  Oh and did you know that we are drilling for more oil than during the last Republican Presidency (and Congress).  Oh those pesky little details that makes you lying sons of a ….  Of course for all the conservatives this is gospel and they believe anything that is poured into their little brains because they are holding on so tightly to their little edifice of order and control which is founded on sand.

Let me close with Newt who last night lectured us once again about how President Obama is tramping on religious freedom to the cheers of the mostly fat white people gathered at the debate.  Except he isn’t.  He is trying to allow people who aren’t Catholic or Evangelical nuts who think contraception is abortion to have a choice.  Newt and his crowd, under the guise of religious freedom, are allowing their intolerance to rule.  They are the ones denying choice.  If you go to your friendly drug store and you can’t buy the morning after pill or a contraceptive device because the store has reservations about their use, and they control the market, what choice do you have?  Their “choice” trumps your choice.  I have never been able to understand why if you believe something is wrong, why is it necessary to make everyone else conform to your beliefs.  That is what they are trying to do.  They are the most intolerant of the intolerant.  Remember, they are counting on our tolerance of their intolerance.

Well if you are watching any of the Republican presidential follies, it could not get worse.  Cain blames Perry for a smear campaign which is nothing more than reporting the facts about a sexual harassment suit.  Perry speaks and you wonder what buffoons live in Texas that would elect this guy.  It is now clear that his governing of Texas is nothing more than a good old boy access club.  Weather vane Mitt is hiding to weather the storm. He will wait till he gets a poll to tell him how he feels.   Cain is done unless you really really like someone who hasn’t a clue the Chinese have nukes.  What is it about the conservatives that they so love ignorance and stupidity.  Must come with the territory of holding Tea Party ideas about government and taxes.

Meanwhile in Europe land, our next great Depression is spawning.  Isn’t it just amazing that those crazy Greeks won’t stand for more punishment?  Austerity has not worked out so well there and you would think the Republicans might take note, but that would assume they had the ability to take a note.  I mean really, when you look at Greece, why would people enjoy being pushed into poverty without any near term hope?  All of us can stand a little pain if the gain is in sight, but when there is just more pain in the future, wouldn’t you rebel?  The lesson of history is that you have to grow out of your debt, yet we continue to punish with austerity and no growth hoping morale will improve.  It is the conservative way.  You know it is funny, they were really happy with Obama’s “Let’s look forward not backward” when it came to punishing Bushy law breakers and bankers, but when it comes to immigration, mortgage relief, you name it, all law breakers must be held accountable.

Ah, but back here in hopeless land, student debt grew again in 2010 (we don’t have the numbers for 2011 since it ain’t over yet).  Isn’t this wonderful.  Our kids are doing their best to stimulate the economy by borrowing money to get a good education and then the economy repays them by providing them with no jobs.  Meanwhile the cost of education keeps on climbing.  Things are just working out swimmingly as we cut our aid to kids and their colleges.  See any parallels to the European adventures?  Let’s invest less and grow.  Well I meant that as sarcasm, but Republicans actually believe that.  Although I have to admit they finally agreed that government spending does create jobs, but only if it is military spending.

But not to worry:  “A study found that 280 of the biggest public companies had federal income tax bills that were little more than half the official corporate rate of 35 percent in the last three years.”  So it really is true that the effective (actual) tax rate on most companies is way below what other countries pay, and they are just creating jobs hand over fist.  That is what Republicans tell us if we just lower it more.  But lower tax rates just means less money to invest in our country since these companies certainly are not.  This all makes great sense doesn’t it?  And you wonder why all the Republican Candidates are fruit loops.

Soon we will be pulled back to the “deficit” by the Deficit Commission, which of course is the “real” problem and the conventional wisdom is that Medicare and Social Security are not sustainable and must be on the chopping block.  Of course they are sustainable.  Social Security is good through about 2030 and if we look at raising the Social Security payroll tax on everyone, and lifting the limit on taxable income, it goes away.  Raising the retirement age just punishes those who really need it and aren’t living any longer.  On Medicare, ask yourself this, how do other nations do it at almost half the cost?  Solve that riddle and the Medicare problem goes away.  The idea that private insurance will solve the problem of our aged or infirm is just another insanity of the conservatives.  It is a burden we all must partake in for the benefit of all of us.

So here we are and we are where we are.  It is almost ludicrous that we have one party who thinks more of the same is a good idea, while the other party nibbles at the fringes of any real action to create jobs.  Clueless and spineless.  What a mess.