There's a new conventional wisdom forming in Washington, DC this July 4th, one that transcends party lines and the usual classifications of "left" and "right" as they're understood in that city. It's only being recognized now, because it deals with a number of different economic issues, but the underlying theme is the same: The American dream of financial independence and security is gone. The sooner you accept that and raise the white flag the easier it will be, so stop struggling.
Theyre saying the ideal of "life, liberty, and the pursuit of happiness" is dead. Deal with it.
Why, there hasn't been this much unanimity among Washington elites since - well, since they "knew" there were weapons of mass destruction in Iraq. Here's what they "know" now: The United States is doomed to a future of staggeringly high unemployment. Social Security is part of our national deficit and, like that notorious village in Vietnam, we need to destroy it in order to save it. And we must face an open-ended future where the public treasury and personal security are held hostage to the whims of a few "too big to fail" banks.
Some of these "conventional wisdoms" have been around for years, while others are forming as we speak. Most of them began as politically partisan ideas, but have only been Sacred Truths for a few months. Yet they're already acquiring the false gravitas of ancient received wisdoms. What's the common thread behind these three ideas? They provide a rationale for not resisting the enormous political influence of corporations and wealthy Americans.
The last few days - ironically, those that led up to our celebration of Independence - saw a sudden rash of white-flag declarations. This latest wave of surrender demands involves joblessness. First Digby noted that Jonathan Alter said the following in an interview with Chris Hayes on the "Ed Show" : "We are going to have to accustom ourselves to some higher than, you know, old normal percentage of unemployment. You know, I don't know whether it's seven percent, six percent, whatever."
Before the viewer could utter a Scooby Doo "ruh-roh," The New Republic published a piece by William Galson called "America Will Never Be the Same." In reviewing a Pew study's findings on the Great Recession's impact, Galston writes: "... (W)e do have reason to believe that ... we're in for a slow recovery and historically high levels of unemployment for much of this decade." And, as if on cue, CNN Money published an piece called "7.9 million jobs lost - many forever."
In an article entitled "Spend or Scrimp? Two Sides in a White House Debate," we learned this week that those in the White House who are "focused on deficits - or at least on positioning Mr. Obama to show his concern -- are his chief strategist, David Axelrod, other political advisers and Rahm Emanuel, the White House chief of staff, according to Democrats."
Axelrod says, "it's my job to report what the public mood is," as if the President were merely a passive observer of public opinion and not a potential shaper. Adds Axelrod, "I've made the point that as a matter of policy and a matter of politics that we need to focus on (deficits)." And what better way to erode resistance to that approach than by building a consensus among friendly liberals? The new consensus view: It's impossible to provide the sorts of stimulus that would be needed to address high unemployment, so "we" (by which is meant the jobless - not "we" at all) have to accept it.
Am I suggesting a White House-led conspiracy to undermine stimulus thinking? No. The White House understands that some stimulus will be needed. As with most such consensus thinking, "a conspiracy of shared values" is more than enough. And, as with all Washington trends, a "consensus" is formed by persuading liberals to adopt right-wing ideas, not the other way around. "We'd all love to bring unemployment down," the thinking goes, "but it's just not going to happen."
Let's be clear: Every American who is condemned to long-term unemployment has been shut out of the American dream. When DC insiders encourage us to accept that fixing the problem is too politically challenging, they're telling us that we as a nation must accept profound economic misery for millions of our fellow citizens.
They're also telling us to accept a more racially-divided nation, with a race-based gap in unemployment so severe that it could rightfully be called "jobs apartheid." When African American unemployment is virtually double that of whites and we're asked to accept that structural unemployment is here to stay, we're being told that Martin Luther King's dream of economic equality between the races is one we can no longer afford.
Bear in mind, there has been no NAFTA-like change in the US job situation to explain these new unemployment figures. The Great Recession, not outsourcing, took this last wave of jobs. Why can't we work to rebuild our economy on a firmer foundation and get many of those jobs back? The answer comes, in large part, because of fear of what Paul Krugman calls the "invisible bond vigilantes." The fear - or the stated fear - is these bogeymen will make sure that bond markets don't invest in the United States unless we slash government spending. (As Krugman points out, the "wisdom of the market" says they like our government's actions just fine, but that's apparently beside the point.)
Cui bono - who benefits? One can only speculate. If a government that has spent trillions to rescue the banking industry now spends billions to get people back to work, that could result in a drive for greater taxation of those who benefited from the bank bailout. The same with the new "bipartisan" assault on Social Security. Social Security's minor long-term financial problems could easily be fixed by raising the contribution levels. But that would render it politically immune to being used as a piggy bank for fixing tax-cut-driven deficits. They want to use it as a regressive tax on middle-class earnings instead. What's more, cuts to Social Security would drive more people to invest their savings with the very banks that created that deficit - a double win for Wall Street.
Banking interests are one reason there's been little support so far for economist Robert H. Frank's proposal - a program that restructures consumer debt through direct Federal loans to credit card holders buried by what they owe. Morally, it's no different than the bank bailout. The benefits for the overall economy (in increased spending) would be immediate and real. But the right people don't benefit so it hasn't become part of the Washington consensus.
Americans need jobs, and jobs would benefit the economy. Social Security is one of the most stable government programs we have. And Federal actions should benefit the entire economy and its participants, not just a few wealthy bankers. These are the kinds of truths our nation's founders once called "self-evident."
In the halls of government nowadays, unfortunately, self-evident truths aren't what they used to be.
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Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light.
He can be reached at "rjeskow@ourfuture.org."
Website: Eskow and Associates
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
IN fact the same could have been said of the sub-prime crisis - with $1 trillion in payments to home-owners (and legislated limits on the interest so that the benefit of the program could not be entirely captured by banks) there would have been no liquidity crisis, and people would have kept their homes. The same $1 trillion in banks did not solve the liquidity crisis, or create a trickle down, and many people lost not only homes but jobs.
The real trick is persuading the American people that it is all very important and even more complicated, and that they are very stupid, and that they should leave the management of money to those who have shown the greatest ability to take money for themselves, regardless of the quality (or absence) of any public virtue.
Our central planners have utterly, miserably failed, and their recent efforts in the last two administrations have only thrown $8.7 TRILLION$ _MORE_ down the rathole. That's $8700 Billion in printed, phony, counterfeit money that only debases the dollar. The whole IDEA that the economy can be directed by the "Federal Reserve" chairman, banks and the Treasury Department is the fatal conceit that has wrecked the economy.
Now the central planners are faced with the truth, that none of this has worked, yet they are looking to see the next place to steer the economy.
They all follow John Maynard Keynes. Keynes couldn't predict, and none of them-Benanke, Geithner,Summer, Krugman, can either. But it's all they know, and they wonder which way to steer.
The ANSWER is found in all of us, in free market capitalism, that we have not had for 97 years.
Rid ourselves of the central planners and trust the INVISIBLE HAND of the market that reflects all of our constructive financial decisions. Stop _printing_ money and put a solid foundation under the dollar. Otherwise the dollar becomes toilet paper.
peace and prosperity.
However we can still do something...
www.moveon.org has started a movement to take back our government called "The other 98%"
It encourages citizen activism...visiting, calling and writing our elected officials and letting them know they will be held accountable for their actions. Having demonstrations when necessary in our community.
Corporations have destroyed our Gulf of Mexico, sent our jobs overseas, lowered our wages and purchased our elected officials. We will not surrender to Corporate America....that's exactly what they want....
Again - groups like moveon.org are puppets who rely on contributions from big corporations to lobby for whatever agenda gives them the money and the support they pay them for.
They will always have you throw your vote away on a corporate-owned Democrat.
That's the big disappointment of this presidency right there. I thought Obama was going to be the inspirational leader who would shift the paradigm. Instead his Presidency has succumbed to being a follower and not the visionary leader we had hoped for. It's time for a march on Washington by a group other than those wingnut tea partiers. To get their government to be for the people and not the rich and powerful.
Oh and to you right wing nut jobs out there. I'm going to blow your mind right now.
Government can and does create wealth. When the post war presidencies of Truman, Eisenhower Kennedy and Johnson created infrastructure and safety nets like the interstate highway system and medicare they created wealth. Deal with it.
The tea party movement is the only signifigant political movement that this country has seen seinc Lincoln. You are now seeing the results of this movement in the primaries, and you will see it's power in November.
We always have, we always will because we never give up.
Even the railroad barons and steel magnates were humbled by the People, once the Dems and Repubs were in danger of losing power in the 1930's.
Banking and business were strictly regulated by the founding fathers because they knew first hand what we are experiencing right now.
WE ARE THE PEOPLE the constitution was written by and for.
Never forget that.
We can't "set aside our differences" and do "what's right for the country" because we fundamentally agree on what's right for the country.
The country does indeed need to wake up. It would be better for all of us I think if you took a nap.
Some moderate measures like tariffs, tax on outsourcing and financial responsibility can quickly improve the situation. But this is not the goal apparently.
But there are no ways to "quickly improve the situation". We spent a generation digging this hole and digging it was the EASY part. Getting out of it may very well be impossible at this stage. As I see it right now we don't have a major political party who's even interested in stopping the digging!
Unregulated capitalism doesn't work and money doesn't trickle down when you cut taxes for the wealthy.
nope.
Milton Friedman have stated many times that he has given his advice to Presidents when asked. And his advice has never been followed.
"Unregulated capitalism doesn't work"
and Mr Friedman always advocated a proper role of government, namely national defense and judicial adjudication of legal disputes.
"money doesn't trickle down when you cut taxes for the wealthy."
nope.
Money does trickle down. Who is more likely to give you a job: a rich person or a poor person?
b) that government regulations generally get circumvented.
Evidence?
a) Before and during WWII fiscal policy (government spending) and monetary policy (money printing / interest rates) were in the same direction, making it impossible to discern which was driving the economy. After WWII, those policies diverged. Friedman's creative career was starting then, and his analysis showed that monetary policy was of dominant importance, NOT fiscal policy.
b) Regulations tend to create black markets. Friedman used the black markets to prove that regulations do not act as intended, they just create a shadow economy and empower criminals. What's the Number 1 cash crop in the U.S.?
Failed neo-conservative policies have left an ongoing trail of destruction at home, abroad and to our constitution. Pax Americana ends not with a bang, but a wimper. We are truly imploding from within. The exact opposite of what the neo-conservatives dreamed would happen is happening.
When you see the British empire and Ottoman empire 100 years ago, there was no inevitability that America would stay as the world's primary power.
Sadly, the Great Recession was just bad enough to cause pain, but not bad enough to make us take the actions that rescued us from the Great Depression.
While we need a new WPA, a new CCC, and massive investment in our infrastructure -- from bridges, damns, roads, high-speed rail, public transportation, broadband, environmental cleanup, there is no power to make that happen.
Campaign finance reform allowing our elections to be about hearts and minds instead of dollars may be the only thing that will give us a second chance. Unfortunately, neither party's powerbrokers want to change the system.
And our President while intelligent sadly lacks the courage or leadership to stand up and fight corporate power and the conservative movement, preferring to trust the advisers who pursue the same agenda that caused this implosion.
We're doomed.
Only if we revert back to the true meaning of the constitution, will our country survive the next 100 years. That means a limited federal government, and a return to states rights. Social Security, Medicare, Healthcare, should all be state run institutions. Then, states could try different programs, and the successful ones will be adopted by the other states, or they will suffer the consequences of a failed system.
FDR rescued this country. It was only when he listened to foolhardy conservatives that there was a recession in 1938.
YOUR policies failed. YOUR philosophy doesn't work. Corporations exist to benefit shareholders.
It is part of the general welfare clause of the U.S. Constitution for the government to act on behalf of all of its citizens for which there are more who are "labor" than those few who are "capital".
Slavery legal again,
no voting for women,
have to won property to vote,
every slave counts as 3/5th a man for the purposes of determining the number of representatives the state will get in the lower house of congress,
And the bull marches on.
By the way, Jimmyaj; people with wealth, earn it. It is not your job to take it away. I am sick of hearing people wanting to take away rich people's money because they think that they don't deserve it. It is none of your business what they coose to do with their money. If you want to be pissed at someone, be pissed at the welfare mom, sitting home, getting about $40,000 a year in benefits, for doing nothing. That is your money she is taking.
If your dad leaves you his house when he dies, should the government be able to come and take it from you because you didn't "earn it"?