Friday, October 14, 2011

Welcome to America

The American Jobs Act contained a provision that would have been extremely stimulative in terms of GDP expansion and jobs growth while also providing direct relief to the workers who have been hardest hit by the recession. That provision was an extension of federal unemployment insurance.

The extension is not likely to be included in a smaller, "bipartisan" bill. While this may gain Democrats talking points for the 2012 elections, millions of unemployed Americans are going to be hurt. And letting extended unemployment benefits expire is just bad policy in an anemic economy. But this is symptomatic of the new America.

In the wake of the weakening and final repeal of the depression-era Glass-Steagall Act, banks merged with investment and insurance firms, creating and selling instruments such as mortgage-backed securities, and creating structured investment vehicles which bought those securities. Supposedly, "a very effective" SEC, knowledgeable investors, and "very sophisticated" rating agencies would protect us from corporate misbehavior. But the SEC had deregulation fever, the rating agencies were selling AAA ratings on financial instruments without knowing or caring what those instruments contained, and investors were buying those instruments without the necessary transparency. The subsequent 2007 sub-prime mortgage financial crisis and the ensuing economic meltdown was reminiscent of the start of the Great Depression.

Now the banks have been bailed out, large corporations are sitting on trillions of dollars, and Wall Street is doing just fine. But Main Street has been trashed, and the blame for our economic ills has been laid instead on out-of-control spending on social programs which supposedly drove the national debt up to unsustainable levels.

Forget all of the cuts in taxes on incomes, capital gains, dividend incomes, and estates, along with subsidies and tax give-aways for large corporations. Never mind the stagnant wages of the middle class, and the flow of generated wealth primarily only to the top 1%, with effective tax rates on that 1% the lowest in decades. Don't think about the estimated $8 trillion in military and homeland security spending since 9/11. Ignore the millions of jobs lost along with the loss of consumer spending those jobs represented. Ignore also skyrocketing health care costs and the waves of medical bankruptcies. Don't look at all of the housing foreclosures and evictions of families.

Look only to the people who need assistance for someone to blame. Look only to gays and socialists and the unemployed and the disabled and immigrants and the poor for the cause of our economic woes. Label "Occupy Wall Street" protesters anti-American, and dismiss their grievances as baseless or incoherent.

Don't look for blame among our Senators, Representatives and Presidents who set the rules under which Wall Street and the wealthy played their games. Don't look at the lobbyists and the flood of corporate campaign contributions to our elected representatives for an answer as to why our unemployment is so high. Instead, blame the economy on immoral poor people, and blame the unemployed for being lazy. Blame seniors for getting welfare, and ignore the fact that Social Security is not paid out of general revenues.

So let's watch our elected representatives as they kick millions of unemployed people off of their gravy train, slashing those incomes to zero.

Let us applaud financial austerity. And let us also not forget to celebrate the passage of new Free Trade Agreements. Wave to the jobs going overseas to North Korean factories owned by South Korean companies who now can sell freely in the U.S. Marvel at the increase in U.S. assets hidden in Panamanian banks and the new regulations designed to prevent investigations of tax fraud in Panama. Smile at the Colombians and ignore the violence towards thousands of pro-union workers in their country.

Candidates for next year's elections are vying with each other over how generous they can be to the supposed "job creators", and they are arguing which of their plans will best dismantle Social Security, Medicare and Medicaid, and the Affordable Care Act. Politicians are more concerned with preventing gay marriages than with job creation. Assistance for home-heating, higher education and county and city governments is disappearing. Austerity is ushering in a global recession.

But don't worry. A new vision of America is on the horizon. Welcome to 1896.

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