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Same As It Ever Was
By David Glenn Cox
Be afraid, be very afraid, the angel of economic calamity has visited disaster upon us and hovers over us still. The proposed trillion-dollar bailout is just that, a bail out, it does nothing to fix the hole in the boat. In 2007 when the so-called “credit crisis/ mortgage crisis” began, the Federal Reserve cut interest rates and flooded the decks with cash and the situation was stabilized for six weeks. When it returned the Fed again lowered interest rates and this time the equilibrium remained for only twenty-four hours.
This week as the gorgon once again reared its head, the doddering old man proclaimed to us, “no more bailouts!” a pathetic snake oil salesman bit by his own snake. Confused and anchored to his ideology, he insists that it is not the life guard's job to watch the pool. Now splashed by the waves of economic adversity, he begins blowing his whistle frantically to show us all that he is on the job. Intent on showing us what a good servant he is in time of crisis, he blows at those running on the deck and yet has no answers for those who are drowning.
His is the party of personal responsibility; you shouldn’t depend on the government should you? What did they tell the Katrina victims, that you should have known better, that you should have just gotten out! Thousands sweltering in the heat and waiting for water on rooftops and still today thousands wait for insurance checks because the political party in power tells us we must let the market work. Markets work best when the government doesn’t interfere.
As millions of Americans began to lose their homes, his party insisted that the problem was small and under control and no government program was needed. Let’s let the markets work; besides many of these people were gaming the system. They should have known better! As President Bush ran for reelection he proclaimed this the “Ownership Society” and all credit was due to his economic policies, and then two years later the mortgage crisis was the fault of scammers and miscreants abusing the system as he called them “poor consumers.” Once again, this is your fault.
The party of personal responsibility has but one pat answer to crisis: “This is all your fault.” In kind they always have but one solution, to pour more money in at the top. Suddenly we have a trillion dollars to bail out Wall Street, no problem. How about more money to fix our health care? Sorry, we don’t have enough. How about the money to wean us from foreign oil? Sorry, we don’t have enough. How about more money to fix our crumbling roads and bridges or schools? Sorry, we don’t have enough, and besides, more money is not the answer.
None of the Wall Street executives will stand for hours in the hot sun waiting for two bags of ice. None will fill out reams of paperwork trying to get a FEMA trailer for their family. None will be called bums and low life’s for asking for government assistance. The stock traders and short sellers picking up the bargains from the economic whirlwind will not be called looters, they are bargain hunters. They are, after all, just letting market forces work. Even today the party of personal responsibility blames this crisis on the average American. You should have known when you bought your house that your job could be shipped overseas or that wages might stagnate. They themselves, however, can hardly be held accountable for market forces beyond their control. Damn you, little people! Now look what you’ve done!
This is, however, as predictable as a bus schedule. “I wonder how many times you have to be hit on the head before you find out who’s hitting you? These Republican gluttons of privilege are cold men, they are cunning men… They want the return of the Wall Street economic dictatorship.” (Harry Truman) In the 1920’s a Republican President and Congress encouraged farmers to plant, fence post to fence post, and expand credit. Everyone was going to get rich in the stock market, a car in every garage and a chicken in every pot!
The New Deal restored faith in credit and banking. The Republicans predicted economic collapse after WW2; instead there was a peacetime boom, a housing boom, a consumer boom. Thirty-five percent of the workforce was bringing home union wages and lived on one paycheck. Eisenhower is elected with a Republican Congress and their first order of business is to pass Taft - Hartley legislation making it more difficult for workers to form unions. Unions, you see, were obstructing market forces. John Kennedy is elected and inherits a recession. He raises the minimum wage by 25% in three years; money is invested at universities and in industry for the space program that still pays us economic dividends today.
Without project Mercury there would be no Dell or Microsoft, no E-bay or You Tube; Hewlett Packard would still be making movie projectors. Rather than tax give-away programs, the administration spent that money reaching for a new world. Building the technology of the future. Today we are mired in an energy crisis and Democrats again call for investment into energy research to build new technologies. The Republicans answer that government can’t do such things, that it should be left to the free market, ignoring that the free market sucks at the teat of existing technologies and will not welcome their replacements.
1980, Ronald Wilson Reagan (666) is elected with a Republican Congress with the mandate to get big government off your back. By 1986 the government was on the hook to bail out the banking industry to the tune of 160 billion dollars. The losses were caused primarily by bad real estate loans and speculation. Home construction under George Bush the elder drops to its lowest level since the Great Depression. During the Reagan-Bush years the national debt soared to its highest level ever; apparently it's expensive to get the government off your back.
Bush the younger inherited a surplus but gave it away. This was your money so here’s $600.00 for you and $50,000 for millionaires. Insane budgets, insane wars, fantasy bookkeeping and in the words of John Stewart, “Come on, you had to believe that President Bush had at least one more big screw up left in him.” Indeed. How quickly it is that they can rescue a bank or insurance company. But their motives are never called into question, nor is their answer to always pour more money in at the top ever questioned.
The Wall Street geniuses peer into their crystal balls and prognosticate recovery. The academic intellectuals draw out charts and graphs to explain exactly what went wrong by measuring the weight of fairy wings, but the answers are on Main Street and the signs are plain enough for even the uneducated to see. For Rent, For Sale, Closed, Going Out of Business Sale, Not Hiring. Empty buildings, hollowed-out futures, dim prospects, how can you save a bank when its depositors have no money?
This is a one-trillion-dollar bailout, not a fix. It won’t stop one more home from going into foreclosure. Nor will it stop the slide in home prices. It won’t stop the slide in the savings rate or the default rate on car loans and credit cards. The problems at the top are caused by the problems at the bottom. Exported jobs, falling wages, collapsing industries and crippled unions. Until the problems at the bottom are addressed there is no rescue for the top.
"If a free society cannot help the many who are poor, it cannot save the few who are rich." (John F. Kennedy)
True, they have tried but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-servers. They have no vision, and "when there is no vision, the people perish." (Franklin Delano Roosevelt)
“During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in emergency.” (Herbert Hoover) 1930
Same as it ever was.
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