08.10.12
Recommended reading
Robert Borosage, Will Anyone Answer the Question Voters are Asking?
Everyone agrees that there is only one question on voters’ minds: who has a plausible plan to put this economy on the right track? Yet in the most expensive election in recorded history, candidates up and down the ticket aren’t offering much of an answer.
The presidential campaigns are running through their first billion on attack ads. And both congressional delegations are fixated on how best to inflict austerity on an economy that is barely moving. (We’ve seen how well that works in Europe where austerity has produced both increasing misery and increasing debt burdens).
Democrats are tongue-tied because polls show Americans increasingly worried about deficits and skeptical about spending or anything labeled “stimulus.” This is nuts, but it’s an election year, and when polls speak, politicians listen. Democrats seem dangerously close to repeating the mistake of 2010 and going into the election without a jobs plan.
Republicans, of course, have a growth plan – the old brew of cuts in spending and taxes and rolling back regulation. But voters aren’t rushing to buy the trickle-down remedies anymore; a vast majority want taxes raised, not cut on millionaires. They want bankers prosecuted, not unleashed. And Republican presidential candidate Mitt Romney, a multimillionaire paying a lower tax rates than the cops who guard his parade route, is the worst conceivable huckster for this elixir.
Via AP, Joseph Stiglitz: ‘This Deficit Fetishism Is Killing Our Economy’.
Q: Economic growth is slowing again. Unemployment seems to be stuck above 8 percent. Is that the result of high debts or slower spending?A: The fundamental problem is not government debt. Over the past few years, the budget deficit has been caused by low growth. If we focus on growth, then we get growth, and our deficit will go down. If we just focus on the deficit, we’re not going to get anywhere.
This deficit fetishism is killing our economy. And you know what? This is linked to inequality. If we go into austerity, that will lead to higher unemployment and will increase inequality. Wages go down, aggregate demand goes down, wealth goes down.
All the homeowners who are underwater, they can’t consume. We gave money to bail out the banking system, but we didn’t give money to the people who were underwater on their mortgages. They can’t spend. That’s what’s driving us down. It’s household spending.
Q: And those with money to spend, you point out, spend less of every dollar. Those at the top of the income scale save nearly a quarter of their income. Those at the bottom spend every penny. Is that why tax cuts seem to have little effect on spending?
A: Exactly. When you redistribute money from the bottom to the top, the economy gets weaker. And all this stuff about the top investing in the country is (nonsense). No, they don’t. They’re asking where they can get the highest returns, and they’re looking all over the globe. So they’re investing in China and Brazil and Latin America, emerging markets, not America.
If the U.S. is a good place to invest, we’ll get money from all over the world. If we have an economy that’s not growing, we won’t get investment. That’s exactly what’s happening. The Federal Reserve stimulates the economy by buying bonds. Where’s the money go? Abroad.
A great article on What Romney’s lies are trying to hide.
Following the lead of the right-wing blogosphere and Fox News, Romney mendaciously took a single sentence out of context, “If you’ve got a business - you didn’t build that”, when it’s clear from the passage as a whole that “that” refers to the “this unbelievable American system”, not to an individual business.
It’s important to point out that Romney lies, not simply to question his character, or to cast doubt on anything he might say. His well-established reputation as a flip-flopper suffices for those purposes. The lies must be pointed out in order to grasp how the very meaning of the US has been betrayed or buried by the conservative movement, which produced catastrophic failure under the Bush administration and is now scrambling desperately to cover its tracks.
The 20th century was a very bad one for US conservatives. They brought the US the Great Depression and never controlled all three branches of government again for the rest of the century. They needed a big win for the 21st century to turn out any better. But they finally did control all three branches for most of Bush’s presidency - and once again produced unmitigated disaster.
Hence, the need to falsify reality reached astronomical levels, and even the most conservative Democratic president since Grover Cleveland - a man committed to a whole host of Republican ideas, not least the substantial cutting back of the US welfare state - had to be portrayed as a covert foreign agent of demonic intent.
An excerpt from a new book The Betrayal of the American Dream, Assault on the Middle Class.
We have been reporting and writing about middle-class America for many years. In our 1992 book, “America: What Went Wrong?” we told the stories of people who were victims of an epidemic of corporate takeovers and buyouts in the 1980s. We warned that by squeezing the middle class, the nation was heading toward a two-class society dramatically imbalanced in favor of the wealthy.
At the time, the plight of middle-class Americans victimized by corporate excess was dismissed by economists as nothing more than the result of a dynamic market economy in which some people lose jobs while others move into new jobs — “creative destruction,” it was called. Soon, they said, the economy would create new opportunities and new jobs. We said, Don’t believe it.
What happened to the middle class in the 1980s and early 1990s wasn’t just a blip, but part of a disturbing pattern: a shift by Washington away from policies that had built the American middle class and enabled successive generations to do better than their parents, in favor of policies that catered to Wall Street, corporate chieftains and America’s wealthiest citizens. We wrote:
Popular wisdom has it that the worst has passed, that it was all an aberration called the 1980s. Popular wisdom is wrong. The declining fortunes of the middle class that began with the restructuring craze will continue through this decade and beyond.
Here’s an interview with the authors on Democracy Now, in three parts.