The Monday Morning Economist
Posted: January 23, 2011 02:04 AM
After the infantile red meat offering to the Tea Party base of repealing the “Job Killing Health Care Reform Act” was passed by the Republican House of Representatives of the 112th Congress, the dirty work of looting America for profit will resume in earnest. After the brief interlude of four years of semi-competent Democratic House control, you may sit back and observe the Republican professional politicians at work. Lobbyists have been sharpening their knives for this feast since November.
[‘Infantile red meat offering’: What is this supposed to mean? We have the image of babies crying out, and that of baby carnivores wanting a piece of the dead carcass. Well, some might compare Obama Care to a dead carcass. We change gears and go to looting, dirty looting at that, and for profit, no less. Who would loot for non-profit? That question goes unanswered. And we have professional politicians who are Republican. Thank goodness there are no professional Democrat politicians. And the lobbyists – they are very careful to pay off only those nasty professional Republicans, as no upstanding principled Democrat would ever take money from a lobbyist. And returning to ‘job killing’: Is that the purpose of Obama Care, to create jobs? Or perhaps it was to ‘Save the Children’? BTW: ‘Semi-competent’ democrats, and the Senate and the Obama Entity?]
Before they start officially carving up what’s left of the American middle class, it might behoove them to think about the actual state of the union and it is this: Americans are broke and job prospects are the lowest they have been in 80 years. That’s it. Nothing else matters and public opinion polls bear this out.
[There is no base line established here to decide what is the middle class from what point, and how much it has been reduced (‘carved up’). ‘Officially’ carving up – that’s a nice touch – as opposed to all of the unofficial carving up. We do like the word ‘behoove’. Here’s a nice ex cathedra: ‘That’s it’. And ‘nothing else matters’ – nothing else? We won’t dispute that people are worried about the job situation. Maybe even those evil red meat eating Republicans might agree about that, heaven forbid.]
No matter what the President says this Tuesday, the destruction of America will continue if the track of public policy remains the same as it has been over the last three decades. Reagan set us on a track that corporations and the rich like. That track will ruin the country and destroy the world’s most powerful economic entity. It will do so by mindlessly following the conservative dictums of small government, deregulation and free trade that Washington seems to have absorbed into it’s DNA. The alleles of this genetic political disease are explained as follows:
[So, inquiring minds ask: Why is he saying anything at all? Inquiring minds also wonder why just the ‘last three decades’? Oh! It was Ronnie. Now we have identified the villain. Well, he says that it was Ronnie’s fault, so that must be. And now we come down to the three horsemen of the Apocalypse: Small government, deregulation, and free trade. Not so certain about the regulation part, but I am pretty certain that government grew under Ronnie babe, and free trade? When has the U.S. ever had free trade? And ‘dictums’ – that is a nice touch, not principles or guidelines but dictums. And here we waft off into some biological analogy.]
a) Deficit reduction is the new code for the conservative grail of small government. Small government was code for tax cuts which traces back to Reagan’s “voodoo economics”. What’s different now is that Republican profligate spending has put the country deeper in debt than it has been since WWII. Therefore the deficit reduction small government model has regained traction with the public. It is widely speculated that the Republicans ran up the debt on purpose to produce just such a debt crisis. Some of the more candid of them will admit it, brag on it.
That the debt crisis is Republican in origin is easily provable, it is no conspiracy theory. Taxes were cut while massive new expenses were incurred, two wars, Medicare Advantage and Medicare Part D. These are bloated wasteful Republican undertakings, all. Now that we have renewed the Bush tax cuts we either repeal that particular stupidity, run up the debt further or cut spending. It will be small government by threat of bankruptcy and the grossest misconduct by a political persuasion since the war over slavery.
[We somehow thought that the idea of less government was a Constitutional thingie. Now it is a Holy Grail. And now it becomes a bit confusing: Is spending bad – or is it good? If Ronnie was a big spender, how does that equate to smaller government? Side note: We like the word ‘profligate’ and may discuss this further at our discretion. And we have here the lovely phrase ‘it is widely speculated’. Unfortunately we must ask: By whom, when, where and can you please provide, in this age of miraculous links, citations?
We love conspiracy theories, regardless of their political coloring. Amongst other effects of war, no doubt spending went up. We wonder how many Democrat hands went up against these wars and the medi-programs mentioned. Bankruptcy – we can only hope. As to the slavery reference, here the good author has lost us completely.]
b) Deregulation is at once a purist libertarian movement, from which it gets popular support, and a craven exploitation of that support by unscrupulous businessmen. Yes, there are unscrupulous businessmen although a guilty plea is hellish hard to extract. Unscrupulous businessmen are the peril against which regulation of business is meant to protect us. Reagan ruthlessly exploited the hyperinflationary oil price shocked economy of the eighties to proffer that government (and unions) was the problem and not the solution. He opined that deregulation of business would unfetter the natural entrepreneurial heroes of capitalism to create vast wealth and it would trickle down to the public, if we de-unionized too.
Deregulation, beginning in 1999, created a series of stock market bubbles that burst creating the worst performing stock market since the Great Depression. It also created the housing bubble and the fraudulent securitized mortgage debt, and the derivatives there from spun it into, when it collapsed, a financial disaster that crippled the world economy. Since we refuse to deal with that legacy of fraud in any meaningful way, ways that might negatively affect the ledgers of banks, it still drags us down.
[Here we have the unsupported statement that ‘deregulation’ created all of these problems. We note that he says ‘beginning in 1999’ which, if memory fails me not, was during the Clintonite Reign. And shouting out ‘Fraud!; fraud!’ doesn’t necessarily make it so. After all, the law is the law – not so?]
c) Free trade is synonymous with outsourcing of labor to foreign labor markets. All but the most invested of free marketers can see that the U.S. labor force can never, ever, compete with China or India on price. U.S. education initiatives already trail the emerging market countries by a decade. Retraining in specialized skills is as vulnerable outsourcing as was semi-skilled labor in the recent past. Free markets are a code word for deregulation of America’s trade, the objective of which is to make profit on the differential between America’s labor costs and cheap foreign labor. Given the current Washington policy climate, the only limitation on the exploitation of that differential will be when Americans can no longer afford to buy anything. It will rank, if there is a future in which anyone cares about history, as the dumbest policy failure in the history of mankind.
But wait, there’s more. The U.S.A. has given wholesale permission for private companies to give American technologies to foreign powers and even transfer manufacturing of strategic materials to countries that are competing with us economically. The U.S. government has effectively given China every possible assistance in defeating us in economic competition and even war. We did so at the insistence of American companies for their profit. And that profit they now hoard out of the U.S. economy for investment in countries that are our competitors. At the same time, they will fight to deny us every farthing of taxes that would help us compete in turn. Business is betting against us and stacking the deck! In a more principled age it would be denounced as treason. In the Reagan age it is called good business.
[Well, how about a bit of autarchy, everyone? And while we are at it: To hell with them damn furreners. They should go back to their forests and fields as we don’t want what they manufacture. I am not certain why education gets slipped in here. Doesn’t the U.S. spend more on ‘education’ than just about any other country in the world? And we believed that ‘free markets’ were code words for ‘consumer choice’ and liberty and even freedom. Not that anyone around here cares about history, but isn’t ‘the dumbest policy failure in the history of mankind’ a bit overboard? After all, trading and commerce between peoples is one of the oldest professions in the history of mankind – no?
And we have to love that word ‘hoard’. Where do they keep all of that profit, under the CEO’s bed? How, exactly, would paying more taxes make ‘us’ more competitive? And talk about mixed analogies: Gambling and treason. And we are back to stomping on Ronnie’s grave. Aren’t we presently subjects under a Obamian Régime?]
Business is pouring investment dollars into China, India and other “emerging markets” because growing markets are more likely to produce growing revenues than are declining markets. Growth in revenues drives stock prices and that motivates executives. The U.S. consumer market has been written off as not being able to produce growth of revenues and therefore stock prices. So investment of profits on sales to Americans is increasingly destined to build factories and R&D in China.
[And this is a bad thing? Aren’t businesses supposed to function as profit-making enterprises? Why shouldn’t those poor souls in India have IPods also?]
It seems that business does not comprehend the inevitable result of sucking money out of the domestic market on which they depend to resell foreign made goods for profit. The result will be the destruction of the domestic market. It might be that they presume that the consumer economies of China and India will pull abreast of the U.S. in time to save their profit growth curve. But if they employ the same labor busting policies abroad that they do at home now, that will never happen. Maybe they think the U.S. government will step in to save them, a belief that they may have cause to harbor. On the other hand, if they break both the government and the people, there will be no one to bail them out or defend their assets from hostile foreign government takeover.
Of course business doesn’t care about the peril. The money is too good right now.
[Ah, here we have this monolithic ‘business’ doing all sorts of nasty things, liking sucking money. We don’t quite comprehend the logic here of ‘sucking money out of the domestic market to resell foreign-made goods for profit’. But then, there probably is no logic intended here. And now we segue into ‘labor busting policies’ and perhaps the kitchen sink, also. As to takeovers, we are probably pretty much down that path already, given the amount of foreign-held debt. (and ‘peril’ – as in the ‘Yellow Peril?).]
If you care about family values that’s one thing. If you care about personal liberty and the Constitution that’s another. Both count toward the quality of life. But the economic track on which we have locked our wheels will make a shambles of both in short order. No significant job growth will be created in this country without a complete rejection of the conservative principles that got us into this appalling state of our union.
So the state of the union is appalling, and so is the state of our ability to deal with it.
[Sorry, but I missed out on the reasoning for the apparent contention that one believes ‘in family values’ or in ‘personal liberty and the Constitution’ but not both. And here we put on the brakes as we once again segue into another analogy about tracks and wheels and the shambles of family values and personal liberty ‘in short order’. We wonder how short is ‘short’ – one day, one week or even one year from now?
And now the grand finale, as after the tightly argued premises above we come to the inevitable conclusion that it is ‘conservative principles’ that ‘got us into this appalling state of our union’. Did I miss something? Where were ‘conservative principles’ discussed? Oh – dictums: Small government, deregulation, free trade, and the holy grail of deficit reduction.
And it seems that we have to give into fate as we seemingly have lost our ability to deal with the ‘appalling’ situation’.]
As far as we can determine any logical argument here, it seems to be that ‘Americans are broke and job prospects are the lowest…’ and that ‘no significant job growth will be created in this country without a complete rejection of the conservative principles that got us into this appalling state of our union.’
[A good deal of this screed seems to be merely a vehicle for invective. We encounter such words and phrases as ‘infantile red meat’, ‘dirty work of looting America for profit’, ‘officially carving up’ (not just carving up, but doing so in an official capacity?), ‘mindlessly’ (so this dire situation was not done intentionally, but rather mindlessly?), ‘craven exploitation of that support by unscrupulous businessmen’, ‘ruthlessly’, etc.]
[And the mixed bagged analogies must set a record for such a short exposition: ‘infantile red meat offering’, ‘dirty work of looting America’, ‘Lobbyists have been sharpening their knives for this feast’, ‘track of public policy’, ‘The alleles of this genetic political disease, new code for the conservative grail’, ‘Business is betting against us and stacking the deck’, ‘the economic track on which we have locked our wheels will make a shambles’ (‘locking wheels’ and ‘shambles’?)]
Our esteemed author seems to believe that all this evil history began with the ruthless Ronald Reagan administration: ‘Reagan set us on a track that corporations and the rich like’ and he ‘exploited the hyperinflationary oil price shocked economy of the eighties to proffer that government (and unions) was the problem and not the solution. He opined that deregulation of business would unfetter the natural entrepreneurial heroes of capitalism to create vast wealth and it would trickle down to the public, if we de-unionized too.’
And this leads us to those ‘conservative dictums’ (certainly not principles) of small government, deregulation and free trade, and that holy grail of debt reduction. Perhaps it is the appropriate moment to look at some facts. And one sad fact is that Ronnie was all hat and no cattle, or in keeping with our mixed analogies: A straw cowboy.
His actual budget (not proposed) for 1982 was $745,800,000,000, and for 1989 was $1,144,000,000, or an increase of about 53%. Reference.
Using 1982 as a base year the debt was $1,142 trillion and in 1989 it was $2,857 trillion, or an increase of about 150%. Reference.
As for the number of regulations, here are the adjusted page counts: 1982 – 53,104, and 1989 – 50,501. So Ronnie stands guilty as accused. Reference. But after four years of Bush I, the count was up to over 57,000 pages.
Now ‘free trade’ is a whole different ballgame. We will address that eventually, somewhere down below.
So, as can be seen from the numbers, Reagan was no paradigm of conservative blood-letting.
Esteemed author: ‘job prospects are the lowest they have been in 80 years’. Assuming that he is referring to unemployment figures, the official current figure is 9.1%, or thereabouts, under the current (Obama) administration. Now 80 years ago would be about 1931, give or take a few days: The perfidious Hoover administration. Unemployment was 15.9% – certainly higher than 9.1%. But wait – we don’t have to go back 80 years to find unemployment figures higher than 9.1%. In 1938, after 6 years of the Roosevelt Revelation, unemployment was 19.0%. (Reference). And under King Ronnie, the figure was 9.6% for 1983. (Reference). Let’s do some arithmetic: 2011 less 1983 = 28. Hmm, 28 years seems to be less than 80 years.
Esteemed author: ‘That the debt crisis is Republican in origin is easily provable, it is no conspiracy theory.’ (Well, this is the first I have heard of a ‘debt conspiracy’ but be that as it may). Our author seems to conflate conservative with Republican. Bush II was no conservative. And he did a lot of mean and evil things including wars of the non-declared type, and social programs such as Medicare Advantage, Medicare Part D and even No Child Left Behind. But give us a break here: How many democrats voted against these wars and those programs? And how many democrats are against them right now. Not many, we will wager.
Esteemed author: ‘What’s different now is that Republican profligate spending has put the country deeper in debt than it has been since WWII.’ We are not certain as to what is the meaning here. After all, ‘Deficit reduction is the new code for the conservative grail of small government.’ How does profligate spending lead to the grail of small government? In any case, back to the debt: The debt in 1945 was about $258 billion. It has been climbing steadily since then under all administrations, republican and democrat alike. As we have been using 1982 as a baseline, the debt in that year was $1,142 billion and rose to $2.602 billion in 1988. 2008, the last full year of the Bush II administration, the debt was $10,024 billion and after three years of Obamanomics, it is $13,562 billion. You do the percentages and tell me who the profligate spenders are. (Reference).
Esteemed author: ‘Deregulation is at once a purist libertarian movement, from which it gets popular support, and a craven exploitation of that support by unscrupulous businessmen.’ To be a bit uncharitable, I doubt that the author has any idea of what libertarian principles are, as there is no such thing as ‘a purist libertarian movement’. Do libertarians support deregulation? Short answer: Yes. Do they also support small or smaller government, decreased spending, lowering national debt and free trade? So, rather than wrestle with the Republican Conservative straw man, perhaps our author ought to be attacking all of those evil and terrible libertarian presidents who have legislated our great country into penury.
This subject deserves a few paragraphs on its own.
In the 220 years or so of United States history there has never been a régime of ‘free trade’, under any administration, republican or democrat or whatever. Never.
All exterior commerce has been ‘managed trade’. A discussion of free trade versus managed trade is beyond the scope of this encounter, but suffice it to say that the issue is a straw man as presented by our esteemed author. As a suggestion, we would recommend that he inform himself of the opposite of free trade – autarchy – and would ask him how like would be if he, himself, had to manufacture everything that he wanted.
We were under the obviously mistaken impression that Adam Smith had resolved this issue, say around 1776. (Reference)
If the purpose of our esteemed author was to prove that the Republicans and their conservative ‘dictums’ are the cause of the present dire economic situation, and that the solution is (apart from abandoning all hope) to grow government, spend like a drunken sailor and regulate everything that moves (Good Reagan quote: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.), then we would have to conclude that he has failed miserably.
Now this is not to denigrate him, as we know he is a smart guy (his bio informs us that he is a member of Mensa), as he has given us a paradigm of a screed. That is to say, an opinion piece of invective, full of inflammatory rhetoric, elusive analogies, non-sequiturs, empty of any apparent structure, dense or non-existent logic, devoid of any supporting data and links, and replete with ex cathedra pronouncements.
As a screed this one is pretty good.
It was a particularly difficult one to deconstruct due to our esteemed author’s devious form of argumentation: No stated premise, wandering declarations of opinion, no development of argument and no explicit conclusion. This is a Huffington Classic.
We are going to make a wildass guess that our esteemed author is of the progressive persuasion. This is apparent in his infantile belief in facile solutions, his contempt for other opinions, incapacity to state a logical argument, belief in government (ie, I want my mommy and daddy), perception of society as composed of collectives rather than of individuals, playing the ‘blame game’ and looking for scapegoats, etc, etc, etc.
For a bit of added hilarity here are some reader comments:
E pluribus unum
09:15 PM on 1/24/2011 Scathing commentary on our last 30 years. Simple and easy to follow. Unfortunately our public has somehow become immune to the truth and we continue to backslide into the darker days of our history…
Inventor and Innovator
10:20 AM on 1/24/2011 Yes, you are correct. And there is every indication that the destruction of our country is what they want. This will enable a world business coalition to take over all the nations of the earth. Since there is no global government to restrict them, resistance will be hard but not futile. Their original charter, maybe an honorable one, was to eliminate world poverty while making tons of money in the process. All you need to do is read the charter of the Trilateral Commission, started in 1972. National autonomy is to be sacrificed to achieve their main goals. Free Trade? Yes, another word for loss of national autonomy.
HUFFPOST SUPER USERTRex86
Enjoying life in West Ohio
09:50 AM on 1/24/2011 The ghost of Reagan haunts us. His magical triad of blaming the government, deregulation, and “free” trade has brought us to the brink. We’re now a consumption based economy with no consumers. The “bottom” 99% have fallen behind for 30 years. Reagan effectively launched the right wing counter-revolution against 20th century progressive reforms. The reactionaries now own the media; ergo, they own the message. Their paid stooges spew propaganda 24×7 to a credulous public, 40% of whom are so ignorant that they want to keep the government out of Medicare.
These facile theories cannot be rebutted without skills at critical thinking and a menu of facts currently lacking in the “marketplace of ideas.” Instead we have the right wing Wall of Sound” braying, scapegoating and inciting the public. Lies and hysteria are considered entertainment. In the amoral world of entertainment making money transcends the search for the truth. How else explain Beck and Limbaugh’s hold on the airwaves?
The left has been pushed into a corner, lacking a cohesive ideology to combat the reactionaries and too dependent on leaders who themselves are captives of media culture and members of the ruling class. Short of the complete collapse of our economy there is little that can reverse right wing momentum. Even then the Republicans’ paymasters relish the thought of another Great Depression. Their money is protected. They will destroy the unions and buy up America at a 90% discount. Corporate oligarchy here we come. Sic transit gloria Americana