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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Not only did the economy get de-coupled from people's lives but so did the Democratic Party which is why it really doesn't matter who gets elected this November. They'll come into the office ready to serve Wall Street and turn their back on Main Street.
What the republicans gave us is an ECONOMY BUILT ON CREDIT.
Interest rates of the 1940's has encouraged DEBT has kept people from saving money and especially seniors who would supplement their soc security and put it back into the economy.
It isn't ALL about the stock market---its about JOBS and INCOME --- but when you hear the MEDIA hype and the financial GHURU's ---you would never know anything else was important in the economy but the stock market
In the Bush ownership society work is irrelevant.
What Bush wants to stimulate is more speculation to increase the prices of investments. That is why
the economy is a paper chase and we pour money into pieces of paper and not infrastructure. Into sub prime mortgage documents and not real housing.
Third...
Stop the flow of Blank Checks to Industries such as health care...Doctors and Health Care Providers and Colleges & Universities.
It's time for Price Controls for these folks.
Make it mandatory that premiums,costs and tuitions DECREASE.
Give tax breaks to those who decide to cut those costs by MORE than mandated.
Number one...want to be taken seriously?
Don't link it to a woman's sexual apparatus...it's just not necessary and is in rather bad taste.
Number two...
More than 6 Million of us have lost jobs due to the outsourcing of manufacturing,IT and other industries.
Rule of thumb here is very simple:
If you are engaged in customer service on a direct face-to-face with the public, your job is safe.
Otherwise it is not.
Put Americans back to work and do it at a level that can support them, if they are single and also those who support families.
Then and only then will we see real growth and a way out.
Anything else is just tilting at windmills and biking in reverse.
Barbara, I fall at your feet in adoration. You are correct we need to help the poor because they need it the most. John Edwards states that "we need to help the poor because it is the moral thing to do". I also think we need to help the poor because if we do not they will be us. Edwards has made this the core of his campaine. He is the only candidate who does not want to give real dollar hand outs to jump start the economy. Jared Bernstein of the "Economic Policy Institute" stated today that dollar hand outs are the least effective way to stimulate the economy and help people in immediate need. He stated that we need to increase unemployment insurance, extend the time it can be collected, give money to the states who can get it to the needy fastest and use it to fund programs and to put people to work to build infrastructure. Wow! That is exactly what Edwards said during the debate on Monday. I hope everyone will take note that not only is Edwards heart in the right place but he has both a practical and intellectual grasp of how to solve economic problems. Martin Luther King stated that "poverty is the worst form of violence" I believe we can in poverty in America if we want to.
Here is the real problem with all of them. The Republicans want to help business to invest and that will boost the economy. But businesses will invest wherever the return is the greatest, and when our economy is down the greatest return, by definition, is not here.
Democrats want to help the unemployed. But helping the unemployed doesn't get them employed.
The problem with both approaches it that they will take a lot of time to craft legislation, create regulations, and so forth. By the time it is done the recession will be over or so deep that it will need even more help. That is why the world markets reacted so badly to it.
Bus proposed 145 billion dollars. Fine. 145 billion divided by 300 million americans is 483 dollars.
So send everybody who files an income tax return before April 15th a check for 483 dollars, federal tax free, times the number of dependants on their return.
Not only will that create a big spending spree but it will encourage folks to file their taxes as soon as possible. And don't worry about it not being 'pro business' enough. If people have money to spend businesses will find a way to make money selling them stuff.
Barb, you are right of course. However, may I respecfully suggest that whenever you lay out a government spending proposal, you explain how much the government is currently spending in corporate welfare. I get so tired of hearing people griping about 'hand outs' to the poor when the rich have the REAL hand outs, are the REAL pilferers of the public purse and the REAL drain on our economy through their laziness and greed.
How people can be so cruel is not a mystery to me or you. But how these animals constantly flip the improper income distribution argument upside down to blame the poor makes a piker out of Machiavelli.
I would suggest that the so called stimulus money should be to anyone who is a citizen or legal resident of the USA, BUT only if their 2007 employment (ie from working, not investments) income was $60,000 or less for singles, $100,000 for families. It also shouldn't go to those inviduals owing money to the government, not to a felony convicted individual persons in jail (but could go to their families.
This would target the people most needing this money. Too bad instead of toward a new car or fixing up the house, many they will use the payment to pay off overdue bills - a subsidy to the financial services industry or to pay down medical debt.
Goood article. But why did we not have this problem until NATA, CAFTA and all the other crapta's. Could it be because people had jobs that PAID ENOUGH TO LIVE ON.?
I'm far from prudish but admit I find the wording in this article slightly offensive - and unnecessary.
Thank you Barbara for your straight talk.
Economic stimulus should by its very definition help mostly the poor and unemployed, because they need it the most. Gee, isn't that a novel idea? I can't believe that our society has deteriorated to such a level that there's even a question that the poor, sick and unemployed should benefit more from any economic stimulus package. The super-rich, greedy, power-hungry repugnantones should be ashamed of their trickle-down bullcrap. They know it's bogus. They know it's beyond bogus. They just don't give a damn. As long as tax cuts help them, and they don't have to contribute to social security or workers' compensation on the vast majority of their income, and, as long as they pay the lowest tax rate on their "investment" income.
1/22/08
8:47pm
Alexandria, VA
RE: "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."
Yeah!! And we poor people will spend every dime we get. We have to.
Of course, the baby should be fed whether the formula company makes a profit or not. But the pro-business Right will only agree to feed the baby if they make a buck off it.
What this country needs is TRICKLE-UP economics. If the minimum wage were, say, $14 an hour, the providers of food, clothing, housing, and other necessities would thrive, as would the providers of needed services like car repairs, haircuts... and the purveyors of modest luxuries like cd's, cable tv, movie tickets, pizza....
When poor people have more money, the economy is fertilized from the bottom up. When rich people have more money, they buy more foreign luxuries, travel overseas, invest or hide assets overseas, and otherwise keep their money OUT of the economy. They might give the nanny a small raise, but that's about it.
ps, vote for John Edwards, the only candidate really talking about poverty in America!
Yes, Yes, Yes. Truth. Tell it, Barbara. You have said what the power brokers have dreaded. You are human. Don't stop. With more like you, we may all yet survive.
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