Clitoral Economics
With all the talk about how to stimulate it, you'd think that the economy is a giant clitoris. Ben Bernanke may not employ this imagery, but the immediate challenge-and the issue bound to replace Iraq and immigration in the presidential race-is how best to get the economy engorged and throbbing again.
It would be irresponsible to say much about Bush's stimulus plan, the mere mention of which could be enough to send the Nikkei, the DAX, and the curiously named FTSE and Sensex tumbling into the crash zone again. In a typically regressive gesture, Bush proposed to hand out cash tax rebates-except to families earning less than $40,000 a year. This may qualify as an example of what Naomi Klein calls "disaster capitalism," in which any misfortune can be re-jiggered to the advantage of the affluent.
But even the liberal stimulus proposals have me worried--not so much for their content as their rationale. Most liberals want a stimulus package that includes an increase in food stamp allotments and an extension of unemployment benefits, which are both screamingly obvious measures. Currently, the food stamp allotment amounts to about $1 per meal, and when four Democratic congresspersons tried living on that for a week last May they ended up even crankier than if they'd had to sit through a week-long filibuster by Tom DeLay.
As for unemployment benefits: They last just 25 weeks in most states and end up covering only a third of people who are laid off. If ever there was a time to create a real working system of unemployment compensation, it is now. Citigroup has announced plans to eliminate 21,000; investment banks in general will shed 40,000. The mortgage industry is in a state of melt-down; and Sprint--how did they get into this?--will lay off 4000 full-time employees as well as 1600 part-time and contract workers.
The economic rationale for more a progressive stimulus package, which we hear now several times a day, is that the poor and the freshly unemployed will spend whatever money they get. Give them more money in the form of food stamps or unemployment benefits and they'll drop more at the mall. Money, it has been observed, sticks to the rich but just slides off the poor, which makes them the lynchpin of stimulus. After decades of hearing the poor stereotyped as lazy, stupid, addicted, and crime-prone, they have been discovered to have this singular virtue: They are veritable spending machines.
All this is true, but it is also a form of economy fetishism, or should I say worship? If we have learned anything in the last few years, it is that the economy is no longer an effective measure of human well-being. We've seen the economy grow without wage gains; we've seen productivity grow without wage gains. We've even seen unemployment fall without wage gains. In fact, when economists want to talk about life "on the ground," where jobs and wages and the price of Special K are paramount, they've taken to talking about "the real economy." If there's a "real economy," then what in the hell is "the economy"?
Once it was real-er, this economy that we have. But that was before we got polarized into the rich, the poor, and the sinking middle class. Gross social inequality is what has "de-coupled" growth and productivity from wage gains for the average household. As far as I can tell, "the economy," as opposed to the "real economy," is the realm of investment, and is occupied by people who live on interest and dividends instead of salaries and wages, aka the rich.
So I'm proposing a radical shift in rhetoric: Any stimulus package should focus on the poor and the unemployed, not because they spend more, but because they are most in need of help. Yes, when a parent can afford to buy Enfamil, it helps the Enfamil company and no doubt "the economy" too. But let's not throw out the baby with the sensual bubble bath of "stimulus." In any ordinary moral calculus, the baby comes first.
Far be it from me to make the revolutionary suggestion that babies are more important than profits. My point is just that our economy--with its dizzying bubbles, wild lending sprees, reckless downsizings, and planet-wide hyper-sensitivity --has gotten too far disconnected from ordinary human needs. We could take the current crisis as an opportunity to fix that, at least in part, by shoring up government support for the needy and the dislocated. Or we can wait around and watch while the appropriate imagery gets nasty, as this ghostly creature, "the economy," starts acting like a nymphomaniac junkie in withdrawal.
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When public funds are handed to the rich, it goes into their bank accounts or foreign investments.
When this money is given to the poor to middle-class, it goes into food and basic needs. Increased demand for these basics requires increased production, which results in new jobs. The new workers will then, out of necessity,buy basic consumer goods, increasing demand, thereby increasing jobs, and so on. This is the ONLY way that our economy can be reinvigorated.
Here's a novel and simple idea Barbara: For every catagory of imports say Water Faucets, or Toys or Auto's or electronic components that importer brings into America; That importer must build a factory here, produce the same products and employ 65% Legal, Born in America Citizens. The other 35% can be used for Green Cards/guest workers. 51% importer owned balance American Owned. Union workers must own 30% of the company.
The amount of improrts of each item/catagory/ is cut back to 45% and mixed with 55% domestic production! Result full employment with citizens that have wages to buy slightly higher cost goods. Demands for all sorts of products and services abound. Tax receipts swell because wages are flowing.
Ahh, what the hell. Try it!
If we accepted that a Crash can not be averted, we would not waste precious funds trying to stimulate the moribund.
Instead of wasting $150 billion on a futile effort to revive the corpse, we should spend the same amount to assure that a workable plan is in place to sustain urban and rural areas in the days and weeks following impact.
Without such planning, the poor will be abandoned. Assuring that a sustaining plan is in place would go a long way toward keeping 'the lid on' when the Crash occurs.
Peter Drucker, the management guru, said that the rich do not contribute to the economy. And we have a good example now. The rich, the ones who don't work and live off dividends, sit around and hope that the poor, the ones who work and live off wages, will buy enough to keep the companies that generate their dividends high. And the rich they give the poor just enough in wages to make the minimum payment on their credit cards they use to buy what they need and keep the dividends coming.
And this "economic model" was used to design the stimulus package. Cool, eh!
Catchy title. You're so clever.
I would have expected a reference to the price of K-Y instead of Special K, but hey...
Going deeper in debt to fix a debt problem, that's a solution.
Wouldn't get a second thought outside of an election year.
We should thank Barbara Ehrenreich for cutting through the nonsense about the health of the economy. In class-divided America, there is no such thing as a single economy any more. Margaret Thatcher once claimed that there is no such thing as society. At the time, I thought her statement was merely foolish. Now I realize this is actually the GOAL of neoconservatives and, in America, the goal has largely been accomplished.
Excellent post; we need solutions that help "the real economy," things that benefit all of us, especially those of us who can't afford to play the stock market game or even the real estate game. The "economy" will continue to do poorly while the citizens do poorly. It seems like it's only now beginning to reflect the reality "on the ground." The Feds can only do so much...we need real solutions for everyone so we can all thrive.
I've read many of your comments Barbara but this is by far the best timeliness, cogency and yes, the earthiness for which you're so well known.
May this see the great distribution it deserves.
Barbara, you are quite right that the focus on the monitary dimension of our culture short-sells other factors that in reality are far more important. Babies ARE more important than profits (Milton Friedman and the Chicago Boys notwithstanding), and the morality of supporting our neediest citizens is more pressing than ensuring that rich people don't lose their investments.
You are right as well, that the criminals in control of our country will take every opportunity to make money for the Owning Class, and the proferred "stimulus" is another such opportunity, as is the bare fact that the markets are in turmoil.
However, the citizenry still sleeps the sleep of the drugged, in front of their glowing programming units, wholy oblivious to the ongoing theft of their livelihoods, their rights, of everything that once made our freedom the envy of the world. Now, what can we offer the world, besides The Great Race and American Idol?
They don't envy us anymore - they just want our money.
------
Kill your TV, and free your mink.
Ehrenreich's column is dead on target. As they say prostitution is the world's oldest business - I take this to mean that screwing someone else to make your profit is what unrestrained laissez faire economics has always had in mind. Capitalists cannot have an ethic because profit is the motive. People are the means.
Here's a tip of the hat to the true prostitutes - Those working women whom male dominated society has used and abused and finally made illegitimate.
If Republicans were in the least bit honest they'd want to legalize prosititution or raise a statue in their honor on Wall Street or Times Square.
You know, if they give me any money - I'm not going to spend it. This economy is responsible for most of the problems we have (and others worldwide) - maybe its time to accept that we need to change the economic structure altogether. No, I'm not proposing anything closer/similar to C[r]apitalism - I'm suggesting a move away from such an economic structure. However, I do add this clause: if by the time we receive the money, no one has won the Democratic Primaries - then I'm donating my money to the Kucinich Campaign. However, if someone has and it wasn't Kucinich - I'm donating the money to charity, like UNICEF or OX-FAM... Because multinational corporations do not deserve any money and our economy deserves what it has begotten.
The only laugh I've had about this problem is Big Bad W talking about "economic literacy."
America hasn't achieved reading literacy yet. "Economic literacy" is just some shmoo speech writer's way of backing out of a room so we don't see the nasty stain on his pants.
I'll say it again, we're in doo doo.
It's really funny how George and his cohorts will pretend that they want to help average Americans by creating a tax break. Really!! What is that about. Think on it, We get a few extra bucks back (money that is ours anyway) and their hope is that we will go right out (like the childlike spendthrifts we are) and immediately return it into the hands of the wealthy(corporations of course). The Recession prompts another convenient transfer of funds out of the hands of the populace into the government coffers and immediately into the hands of the rich. That's how I interpret it. As if the Iraqi war weren't enough of a way to accomplish that. The rich never seem to be done with getting it all. We the People get to rescue the economy (translate that as the rich) by spending, spending, and more spending, all designed to supposedly save the economy. I thought the Republicans aka the wealthy didn't believe in Socialism. Well, if saving their butts by all of us spending ourselves into a hole isn't socialism than what is. Why should we average Americans give one ice cube in hell what happens to the Stock Market. Is it really that big a determinant of whether we survive or not. I doubt it. The Stock market is all about the wealthy. The economy is not my concern, I shop locally from local businesses and support them. Big Business cares only about Big Business. When it suits them they leave us in a lurch and move on. So let us move on and let them find out what it's like. I still think we should enact a law that says to Big Businesses, "If you move out of the country to hire cheap labor then don't expect to sell your products in America again, ever."
Produce offshore, consume here, re-invest the profits offshore.
That is called "being bled", not an economy.
Walsh’s Law aptly states that to pinpoint the basis and origin of a problem, one must determine who benefits from the situation. The 3 trillion-dollar tax giveaway is, believe it or not, only a small part of the problem. The redistribution of the national wealth upward has been going on since, at least, the Taft-Hartley Law was enacted in 1947 over the veto of President Harry Truman.
Taft-Hartley sought to curtail union power that was alleged to be getting out of balance with other segments of society. In fact, it was the nobility (ownership class) who saw unions as a threat to their power and privileged status. After all, they could not abide the peasantry (working class) having any part in determining the quality of their lives.
Applying Walsh’s Law, the 600 trillion-dollar bloated military budget, more than the next one hundred high spending countries combined, is financially benefiting someone. With a little thought one can see who the armaments industries major shareholders are and how wealth redistribution upward actually works. Can’t say that we were not warned; remember our great president Dwight Eisenhower?
Why a war in Iraq? If we apply Walsh’s Law to the Iraq War, the answer is necessarily military contractors. Guess who are the major stockholders in these firms. While hundreds of thousands of civilians are killed and our young men and women are risking their lives for a false ideal and paltry pay, the nobility continues to benefit from the redistributed revenues.
The nobility failed to realize that it is the peasantry who spend money, not those who just buy more shares, who keep an economy percolating. The peasantry tried valiantly to maintain some semblance of their previous lifestyle by going deeper into debt, but this was certainly destined to fail; the day of reckoning has arrived. It will take a great deal more than a measly tax rebate to stabilize the condition of the peasantry.
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