MITCH McCONNELL IS AMUSED
“I am amused with their comments about obstructionism,” [Senate Minority Leader Mitch] McConnell told the New York Times. “I wish we had been able to obstruct more. They were able to get the health care bill through. They were able to get the stimulus through. They were able to get the financial reform through. These were all major pieces of legislation, and if I would have had enough votes to stop them, I would have.”
☞ If only we could go back to the Bush years. That’s the direction we need to go – backwards!
And boosting that agenda . . .
Imagine CBS giving the Democrats $1 million. Or Super Bowl referees betting on the game. Well, Fox News parent News Corp just gave the Republican Governor’s Association $1 million. Fox News: always looking for a way to give the wealthy and powerful an edge.
Wayne Seibert: “I live just north of Congressman Inglis’ district, in the same media market, and I watched his campaign with interest. Much of what you and Mother Jones say is true: this district is one of the ten most conservative in the country, and they are not happy. I don’t think a few anecdotes Inglis peddles in this article really discredit the entire Republican Party; I’m positive I could get ten times as many wacky quotes from Maxine Waters’ district, not to mention Barack Obama’s pastor. Inglis blames the yahoos, blames the establishment Repubs, blames everyone but himself, but he would not have had a credible challenge except for one thing – he voted for the bank bailout, without including safeguards against bonuses or perks being siphoned off. I still don’t think you folks in the elite know how grievous a wound that was to Obama’s Presidency, and I really don’t think it’s a right-wing issue. I think it’s more a populist thing, and it really opened a lot of people’s eyes to the fundamental crony-capitalist nature of our political economy that needs radical, hot-headed opposition. When Ronald Reagan was confronted by a similar crisis in the first few months of his administration, he showed what leadership looked like by firing the air traffic controllers who thought they were indispensable. If Obama had forced the AIG and Wall Street greedhogs to put their bonus money in escrow until the bailout funds were repaid he would be on track to being a transformative president. But you don’t get a Ronald Reagan very often.”
☞ I agree with only some of this. First, it’s worth noting that the bank bail-out was a creature of the Bush Administration. The vote was cast in 2008 during the Bush term, at Bush’s request. Though I, too, would have liked to see the legislation be tougher on bonuses and perks, how exactly that gets hung on Obama’s presidency is unclear. (Perhaps the Fox News bias helps explain it?) Second, the push to protect the wealthy is supported almost unanimously by the Republican Party, which has long had as a top priority making permanent its tax cuts for the rich. Third, look what happened when the President got BP to agree to set aside $20 billion for the little guys hurt by Gulf damage claims. Quite a few on the right – but no one I know on the left – attacked this as big government bludgeoning private enterprise.
You’d think most of America would long since have been outraged at the way the Republicans have so successfully skewed the game in favor of the rich and powerful – and that a populist movement would have emerged back when the Administration in power was not on the side of the middle class, as it is now.
And speaking of Ronald Reagan . . .
OUR ECONOMIC QUAGMIRE
One of the founding executives of Cisco offers this economic analysis at the Huffington Post:
The US is stuck in an economic quagmire featuring near ten percent unemployment. As politicians argue about the solution — massive tax cuts or increases in Federal spending — what’s missing is a succinct analysis of the problem. Why has America lost 8 million jobs?
The roots of the jobs crisis stretch back to the Ronald Reagan presidency when conservative economic ideology began to dominate American political discourse. At the forefront of this philosophy were three malignant notions: helping the rich get richer will inevitably help everyone else, “a rising tide lifts all boats;” markets are inherently self correcting and therefore there’s no need for government regulation; and the US does not need an economic strategy because that’s a natural consequence of the free market.
What followed was a thirty-year period where America’s working families were abandoned in favor of the rich. Inequality rose as middle class income and wealth declined. As corporate power increased, unions were systematically undermined. As CEO salaries soared, fewer families earned living wages.
Conservative ideology produced a warped and brittle US economy, where more than two-thirds of our GDP was housing related: building, buying, and furnishing new homes or borrowing against existing homes in order to maintain a decent standard of living. When the credit bubble burst, the debt-based consumption model failed, taking down first the housing sector and then the entire economy, resulting in catastrophic job losses.
In order to be sustainable, the US economy has to generate 125,000 jobs each month. (To bring unemployment down to acceptable levels — below 7 percent — the US economy needs to generate 300,000 jobs each month for the next three years.) For this to happen, there have to be three positive conditions.
First, consumers have to be willing to spend money. Regardless of the conservative ideology, the US economy depends upon steady consumption by working Americans. The Reagan Republican theory incorrectly assumes that rich folks buying yachts and vacation homes catalyzes the consumer economy. Nonetheless, wealthy Americans have as much income as they have ever had but their purchases of Ferraris or diamonds has not been sufficient to boost the economy. Average Americans aren’t consuming because they either don’t have the money or are saving it because they are fearful.
Second, businesses have to be willing to hire. At the moment, many businesses — outside of construction and commercial real estate — have the funds available to hire but they either aren’t hiring or are filling what should be full-time permanent positions with part-time temporary workers.
Third, the new jobs have to be decent jobs paying a living wage. Unfortunately, the Associated Press reported that of the 630,000 jobs created in 2010, 81 percent are low-paying service-sector positions. That’s the sad backdrop to terrible unemployment data.
Since the Reagan presidency the number of decent jobs has steadily eroded. When a worker retires from a GM assembly line, and a job that pays good wages, he isn’t replaced by his son or daughter; they go to work at McDonalds. There was an under-acknowledged “structural adjustment” that meant the US consumer economy could not function unless average Americans went deeply in debt: borrowed up to the limit on their credit cards or used up their home equity.
It’s necessary to understand what went wrong with the US economy because fundamental changes are required to deal with the jobs crisis. So far the political rhetoric has been underwhelming. Republicans blame unemployment on the policies of the Obama Administration and argue the solution is to cut taxes, particularly for the wealthy. Democrats blame unemployment on the policies of the Bush Administration and argue the solution is to increase Federal spending. The New York Times correctly condemned both approaches noting that Republican policies produced the current economic decline and the “cut taxes to solve all problems” clearly does not work. The Times also described the Democratic approach as timid, failing to attack the systemic nature of the problem.
America has economic cancer and radical surgery is required. First, there has to be a massive redistribution of income by increasing taxes on both the wealthy and financial institutions (particularly those that were at the heart of 2008’s economic meltdown).
Second, there has to be a second stimulus package that not only supports America’s teachers and public safety workers but also strengthens the US infrastructure, in general. It’s not logical to propose that American businesses provide better jobs without also ensuring that our schools produce workers who can meet employers’ needs.
Third, the Federal government has to be involved in economic policy. The last thirty years has demonstrated that it’s insane to assume the free market will do this. What we’ve learned is that the market follows the path of least resistance and dictates economic policy solely based on greed. Creating wealth for a handful of CEOs isn’t consistent with the national interest. What are needed now are economic policies that produce decent jobs for average Americans.
The Federal government has to intervene and create the jobs that the greedy, shortsighted private sector hasn’t provided.
☞ I don’t like the word greedy. It conjures up images of fat little boys taking more than their share of Jujyfruits. I don’t think CEOs are motivated by greed, I think they’re motivated by a competitive need to excel – to rack up a high score. But because that score is expressed in terms of their own wealth and perks, you can see how some critics might mistake it for greed. Whatever their motivation, CEO pay packages do not take fully into account the “externalities” – costs their actions impose on the rest of us – and thus fail to keep their interests from being adequately aligned with the greater good. So either we have to “price those in” somehow, or impose regulation, or both.
Guru: “So the good news is that DCTH, after this sale of new shares, will have the cash it needs to get through the approval and early launch of its product. The bad news is that, the way the company was talking a couple of weeks ago, the idea was to generate enough cash from an Asian deal not to have to raise equity cash immediately. It must be taking longer than they thought a couple of weeks ago. No reason to assume it won’t happen – they already have a deal in Taiwan, so this would be for other countries. Still, would have been nice for an Asian partnership to be the next news item.”
☞ Hang on.
Quote of the Day
Capitalism without bankruptcy is like Christianity without hell.~Frank Borman (ex-Eastern CEO)
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