What is the real problem for most of us?
Robert Borosage writes a warning about when bipartisan elites come to a consensus on solving the “problem”.
Today’s elite consensus — that deficits are at crisis levels, that budgets must be brought into balance immediately — is equally wrong-headed. It slights the real crisis we face, and is foreign to the spirit that made America great.
What is the crisis we face today? We have an economy scarred by mass unemployment, falling wages, and growing insecurity. In the downturn, a staggering 40 percent of American households have been afflicted by unemployment, negative home equity (“under water homes” worth less than their mortgages), mortgage payment arrears, or foreclosure. In November 2008, one quarter of Americans aged 50-59 reported that they’d lost more than 35 percent of their retirement savings.
But this devastation caused by the collapse of the financial bubble and resulting recession is but the foul expression of an economy that has suffered long-term decline. We were hemorrhaging manufacturing jobs when the economy was growing before the bubble burst. Wages fell for most Americans over the course of the last decade, which suffered the worst job creation of any period since the end of World War II. The imbalances were obscene before the recession, with finance capturing 40 percent of corporate profits, the wealthiest 1 percent capturing half of the benefits of economic growth, the US running soaring trade deficits, even in high technology products, with China and the world. Our decaying infrastructure, broken health care system, declining educational performance in relation to the industrial world all preceded the fall.
So if we now turn to balancing our budget and succeed, what then? We will have had a brutal fight that will turn us one against another without addressing the fundamental challenges facing the country.
The right question we need to ask, I would argue, is what is the new strategy, the new foundation for an economy that offers hope for rebuilding America’s economic vitality in the competitive global market place? This requires a clear and bold strategy for revitalizing American manufacturing. It requires investments in areas vital to our future — in modern infrastructure, in education and training, in research and innovation. We need to capture a lead in the green industrial revolution that is sweeping the world. It requires new trade strategy, shackles on financial speculation, empowering workers to capture a fair share of the productivity and profits they help generate to help rebuild America’s middle class. We have to figure out how to afford this, financing what we can, changing priorities and raising revenues where needed. But this is a far different question than just how we get our books in order.
Set the speed limit at 140 MPH for robotic vehicles on traffic controlled asphault lanes. Do that and the economy will see 4-5% growth for ten years and create a hundred million jobs.
Consider LA basin. If I can move one cardboard box of goods across the LA basin in 20 miniutes for $5, then that economy will boom. If I can move one box one mile for one dollar then I can make a living cooking breakfast for my neighbors.
“create a hundred million jobs”
wat.
Tale of the tape wrt mfg:
http://research.stlouisfed.org/fred2/series/DMANEMP
this is literally Depression level of jobs in manufacturing.
The poison of any economy, private or command, is rent-seeking.
And we’ve got a ton of it here.
We should tax the s–t out of commercial land (including non-owner occupied housing) values for one.
Capture more of the resource rents that are bleeding us dry.
Put part of the new revenue into cutting taxes on actual productive, wealth-creating activities.
Figure out how to lower health costs to match what the rest of the world is getting for their money.
Cut the military 70%. $200 billion would still be two million jobs. $50B each for the Army, Air Force, Navy and Marines (who would be the designated expeditionary corps).
Roll the R&D dice trying to find the next internet and www thing that increases productivity.
Figure out how we’re going to adjust to the $20/day wage level. China’s cheap labor coming online can in fact be a great boon still, but we’ve got to figure out how to better integrate our economies and “spread the wealth” around better.
Greatest threat is US is trending to the same social contract as Honduras.
Cutting the war machine is a small solution to the problem of 4% of GDP going into counter productive holes in the ground, ocean and air. Took resources away from better uses.
In Europe taxes pay for a fraction of the things the US gives it owners free, like the war machine for their commercial interests and empire, and subsdies and federal corporations.
Another solution: since Laffer was wrong, all interest paid by treasury should be taxed at 90%. Starting in Jan 11.
A few tariffs, and users’ fees for all that stuff which is called (by the anti social destroyers of SS) discretionary spending.
Shut down banks that connect to the federal reserve and lend direct to citizens when the FR thinks it is time to print away the value of the US D.
The main issue is the republic has been bought and the owners are very few and they do not care about the rest of the country, other than the few ambitious serfs who think they have careers for the owners.
US had suffered from what Jefferson warned against: Standing Armies and Banks.
Shutter both.
Robert Borosage – “The right question we need to ask, I would argue, is what is the new strategy, the new foundation for an economy that offers hope for rebuilding America’s economic vitality in the competitive global market place?”
This is a good starting point.
One would have thought that the Congresses would have undertaken serious efforts to pull together a new economic strategy in the absence of a thorough proposal from the Office of the Presidency, whether in the last two years or ten years.
There is no excuse for the lack of effort and action that we are observing year after year. There is always some talk on the Hill but it normally ends there. And then they go have drinks.
“The right question we need to ask, I would argue, is what is the new strategy, the new foundation for an economy that offers hope for rebuilding America’s economic vitality in the competitive global market place?” How about this for a starting point:
. . . invest in the three areas that are absolutely critical to our economic future: energy, healthcare, and education. . . . the country that harnesses the power of clean, renewable energy will lead the 21st century. . . . we must also address the crushing cost of healthcare. . . . The third challenge we must address is . . . education in America. In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity –- it is a prerequisite.
— Obama’s address to a joint session of Congress, February 2009
“We have to figure out how to afford this, financing what we can, changing priorities and raising revenues where needed. ”
With all due respect. reading the sentence up to the first comma I thought to myself ‘oh, he means politically speaking..’ then the word ‘financing’ ‘changing priorities’ ‘raising revenues’ .
This is my first visit to this blog but I always assumed Angry Bear was in paradigm. How do you think we afford to do anything?
“all interest paid by treasury should be taxed at 90%. Starting in Jan 11.”
Why? How would we benefit from this?
Heaven
actually, we just do it. the money will take care of itself.
some ideas above i agree with. some sound like the usual air,and some are frankly self serving.
which is the real problem. we live in a self serving society. whatever kept our ancestors honest is no longer working to keep us honest. we elect lying politicians and we hire economists to tell us how to make money by magic tricks. no one seems to want to do an honest job any more. or pay the taxes needed to run a civilized country.
I liked that solution.
Basically it underlines the fact that every dollar of US Treasury debt sold should have been taxed instead.
It doesn’t repudiate the debt but does “alter the deal”, in the words of Darth Vader.
Unfortunately we need to roll over so much debt each quarter that I don’t think is actually workable . . .
nothing on capital appreciation???
You say this like it’s a bad thing:
“””So if we now turn to balancing our budget and succeed, what then? We will have had a brutal fight that will turn us one against another without addressing the fundamental challenges facing the country.”””
What you mean, “we”? This is a classic elite tactic; get the peasants to fight.
You say this like it’s a bad thing:
“””So if we now turn to balancing our budget and succeed, what then? We will have had a brutal fight that will turn us one against another without addressing the fundamental challenges facing the country.”””
What you mean, “we”? This is a classic elite tactic; get the peasants to fight.
You say this like it’s a bad thing:
“””So if we now turn to balancing our budget and succeed, what then? We will have had a brutal fight that will turn us one against another without addressing the fundamental challenges facing the country.”””
What you mean, “we”? This is a classic elite tactic; get the peasants to fight.
if reform it must be
forget deficit fightin
and 1930s ccc it
http://www.infrastructurereportcard.org/
30 yrs of neoliberalism
govs too fearful of/or simply unable
to enter into direct competition
w private cap
I believe the last paragraph tells the tale. What indeed, is the solution? I think it’s right out in front of everyones nose, and the vast majority sees it too. How to implament it, shouldn’t be that difficult, not if there is unity of thought. Rebuilding, regardless of what it is, requires removal of that which stands in the way of the rebuilding. Sometimes, the total demolition, like when they topple one of those obsolete buildings. But the longer you wait, then, like Detroit, the whole just rots. It seems that the ideas are all here, but there’s a lack of putting them out in the open, for all to see. What good is accomplished by tossing out the ideas here among the readers of AB, when it needs to be read by the vast population, especially those that are unemployed, that do have the ability to put the energy needed to rebuild this country? Granted, there isn’t any going back to where we were 1 or 2 decades ago, but given the option, then I’m of the mindset that the country will do the right thing. As I’ve said a few times in the past, until the idea that this country needs rebuilding gets spread far & wide, we will continue down the road to the dumps.
I have a four economic plan for sale, cheap.
http://wallstreetchange.blogspot.com/2010/11/2010-after-election-4-point-economic.html
juan
not looking forward to the revolution. but here is a revolutionary idea:
if there are not enough jobs, let’s find a way to share the jobs we have, spend less money and more time at the beach. we don’t even need government to do this. the people could make agreements among themselves and the government and the capitalists would just have to get used to it.
oh… the people would have to agree among themselves… yes, that is the problem.
There are damn few honest jobs left to do. And the owners don’t want to pay a living wage to anyone to do them.
coberly
‘revolution’ need not be the struggle to arrive at some strict, predetermined end
but may also be ambiguous individual/community dynamic creating
social organizations alongside but not connected with
officialdome — a dual power.
“It’s not just about moving from a position of powerlessness to one of power – at least in the sense that someone can start producing subjectively. The movement…or the spaces that the movement creates, are in some ways the spaces where you can transform your own existence and have another way of interacting with people” (Auyero, 2001).
drb
i agree. but look at the people who have jobs, and the businesses that haven’t closed, and i think you will detect a lack of commitment to full integrity.
juan
yes. been working on that. see some evidence others are too. but it’s hard.
Our nations economic problems are not new, however I feel the American public is as much to blame as any, and I mean any politician. As long as people are more concerned about their day to day activities, obligations (mortgage, car payment, bills, ect..), favorite reality tv show, than what the effects of passing the burden of the tax bill to the middle class does, fighting a two pronged war with no end in sight (one of which is completely illegal), fostering a very old system of corporate welfare that requires as much accountability as FEMA under the previous administration, we are all in serious trouble. It’s been a little over two years now since the “crisis” has been covered by all major media outlets, what has changed? Very little, the figurehead does, but then they bring in the same faces. Regardles of party, these individuals know the rules, and know how to manipulate an ill informed public, it is that public, who enjoy catchphrases, slogans, ascribe unrealistic expectations that politicians are more than willing to take on during election season, and empty statement such as “what made America great” that will doom us to repeat the same mistakes again in maybe 10-20 years. Wake up people.
The reason we have falling employment, low wages and houses under water IS debt implosion. We built an economy based on fantasy and credit and the mal-investment it spawned has resulted in businesses that have fewer customers (because they are up their ying-yangs in debt) and banks that are scared to lend to anyone without letters of introduction from the Pope.
The ANSWER certainly doesn’t lie in pulling out the “elite” card..it’s everyones problem..and to show just how frivolous the American people have become look at the results of Black Friday..and the new Internet frenzied Monday! Politicians and their pandering to every special interest group with a live breath got us into this problem…what makes anyone think they can get us out.
The SOLUTION is a rather lengthy period of paying down..or outright defaulting..on a decade of garbage debt…There’s hardly a Congressperson who can find their way to work without help..how could they possibly know what great technologies or programs will pull us miraculously out of the debt rat hole?
There is NO easy, clever solution…..