Thursday, March 28, 2013

The state of disunion! Or where are we going?

The last election was a sound indicator of which direction the people wanted to go. But our system is dysfunctional and we're not going that way.  A few years back there was a popular bumper sticker that read,  Think Global act Locally. It was a phrase invented by environmentalists and progressives. Actually, it is more appropriately applied to the Teaparty movement. With the financing of the Koch Brothers and Freedomworks, the Teaparty, with a melange of complaints and motives has gelled on hatred for a black man in the Whitehouse and government spending.  Totally impervious  of the damage they have done to the Republican Party and their country they have managed to bring the democratic process to a near standstill.  Of course this didn't happen in the last five years. Republicans have been active for some time using wedge issues like gun control, abortion and gay rights to put state legislatures in republican hands. Republicans control state legislatures and governors in 30 of the states and have been effective in redistricting or gerrymandering to assure control of the House of Representatives.  The same is true of democrats but most are republican.

Total intransigence on the part of the Teaparty domineered GOP has led to draconian cuts in the federal budget called sequester. It was forced on Obama by GOP blackmail.  They threatened to refuse to raise the ceiling on the debt limit which would mean the government could not pay it's bills. Refusing to pay the bills has nothing to do with future budgets. The debts, most of which have resulted from the Bush tax cuts and the invasion of Iraq, have already been incurred.  ALL of the GOP members who were in office at the time voted for the tax cuts and the war so they are refusing to pay for the things they bought with borrowed money; borrowed to a large extent from a Communist regime after having used the fear of Communism as their principal mantra for 50 years.

Despite the resistance from the GOP, before the 2010 elections, Obama passed health care reform and a stimulus package which has stopped the bleeding of job loss and led to economic recover, anemic but recovery. But the recovery is about to end with the budget cuts forced by sequestration.  Look for one more positive jobs report and then the recovery will be over. With the takeover of the House by the Teaparty, progress has stopped and will remain so.  These people answer only to their wealthy contributors and their carefully arranged right wing constituencies.  Their mantra is that government doesn't work and their goal is to make sure it doesn't and Obama has been weak in overcoming the obstacles. To the chagrin of his liberal base he has offered to make cuts in Medicare and Social Security, along with closing loopholes in corporate tax laws in order to reduce the deficit; but the Teaparty refuses to accept closing the loopholes. The bottom line is:
1.  The deficit is not the problem we are facing, it is lack of quality jobs, a decaying infrastructure and a vital need for alternative sources of energy.  Austerity has failed in Europe and will fail here too.

2. The Teaparty, along with many conservative Republicans want to balance the budget on the backs of those who can least afford it.  Even with cuts in entitlements the deficit will continue to expand without additional revenues from the upper income groups. They will not accept them.

3. The increased concentration of wealth, or purchasing power, in the upper income groups will prevent a recovery of our economy. Corporations, along with their wealthy shareholders, will thrive in the short run as they move their operations to where they can get cheap labor; and find global markets for their products.  In the long run, they too will fail and the next crash will make the 1930s look like the good old days.

It appears that Obama has given up on his fight.  In the aftermath of the New Town shooting, he is seeking refuge in what he thinks will be a victory in gun control but even this is slipping away from him. The emotion of the massacre of the children will not overcome the irrational, even grotesque, worship of guns by too many  Americans;  gun nuts who use the Declaration of Independence to justify their fear of a tyrannical and despotic government which necessitates their squirreling away all these lethal weapons in their attics, basements, storage units and trunks of their cars so they can run through the woods in camouflage pants, jump boots, blackened faces, waving their weapons and shouting hooyah.  James Yeager, who has threatened to start murdering people if Obama takes one more dictatorial step toward gun control, is typical of the emotion of people in love with guns and why meaningful gun legislation will never pass. All it has done is use up too much time and energy and direct attention away from the real danger we face.

Another distraction is the attention given by the president, the press and liberals to same sex marriage. The remarkable shift in public opinion regarding what they call equality of marriage, from rejection in the 90s to overwhelming support of it today has given Obama something to hang his popularity on.  Again, our problem is the threat of economic collapse looming ahead.  This is where the president, the press and liberals should be focused. As distasteful as same sex unions raising children is, at least to me, it's importance is minuscule  If our economy collapses, gay and lesbian couples will stop wanting to adopt children.

Abortion is another distraction, once again, or I should still, grabbing the attention of the press and the president. This one is more important because it involves many people now and in the future. The irony here is that the same people who are totally preoccupied with what they call a human life's right to survive a pregnancy turn their back on the child after it is born.  They would withhold medical care and even food from those who are unable to provide it without help. It is ironic that the party of small non-intrusive government, government that permits banks to rob their clients, would advocate government dictating what a woman can do with her own body. I am personally against abortion except for some situations, but it is a sin not a crime and should be between only those involved and certainly not the government.

The problem for Obama, and we liberals and progressives,  is that press coverage will make Obama as responsible for the upcoming economic failure as the GOP and with the local control by republicans of state elections, we are likely to see a landslide victory of the Democrats for the presidency and control of the legislature by the GOP in the 2016 elections. Thanks to the Citizens United decision with the ensuing flow of money into elections our nation and democracy is in serious trouble. We literally, now  have a government at the federal level that is de facto owned by international corporations. With the weakening of our government as a protective entity, we are in real danger of corporate feudalism with government of, by, and for international corporations. It’s a cold hard fact that there is no such thing as laissez faire. It can’t exist for long. Either you have a government that controls business or business that controls government. A healthy stable economy requires a balance – as we had from the end of WWII until the slow dismantling of New Deal legislation and the rebirth of supply side economics. Capitalism is a harsh appeal to selfishness and unchristian Darwinist survival of the fittest. Its sole redeeming quality is that it has been very effective at producing goods and it will only continue to do this as long as good government prevents it from emasculating itself; and government very likely will stop doing so. 

Democracy can only exist with an informed constituency and with the right to vote assured to all voters.  The locally controlled legislatures are working hard on limiting the opportunity to vote and the corporate controlled media has done an excellent job on feeding the public misinformation, hiding the real news and protecting their corporate interests in what they show and tell on the TV and radio media.

Recently MSNBC did a special on the events leading up to the Iraq invasion.  As an aside, MSNBC is ostensibly a liberal political discussion show but the managers are careful to ensure that Fox News, Rush Limbaugh, and all the right wingers get their time. It is also obvious that you can't be too critical as we learned from the owners (GE) removing Phil Donohue, Keith Olbermann, Dylan Ratigan and moving Ed Shultz out of the weekday shows.  Can Rachel Maddow last much longer after her Bush expose?  Maddow's show was interesting but nothing new.  Everyone now knows that Bush and his staff, including Powell lied.  Her show was an interesting "mea culpa" for the "other guys," but the fact is that everyone in congress knew the truth, or should have.  I knew the truth but I had to find out by reading  the deep caves of the daily papers and listening to a few isolated talk shows.  The public can be excused because most don't read past the main section of the paper and get their news from the networks, CNN and Fox News.  The congressmen, however, have staffs and they certainly knew.  They were bullied by public opinion. They, with a few exceptions, simply had no courage. 

It's not a question of failure of the press.  It's a question of the objectives of the press.  Since the end of WW II, with a few exceptions, where there was competition to  provide information that could not be suppressed, as in the Watergate investigation, the press has presented or withheld information to further their owner's corporate interests.  During the Cold War we were told what to believe.  We were led to believe that Chiang Kai-Shek was a good guy and the established Chinese government was bad...because they were communists.  We were told that the Chinese and Soviet Union were part of a unified movement that had the power and motivation to take over the world. Subsequent events have proven that this was never the case but it is still part of our conventional wisdom because of the press. We could have whipped the Russians at any time militarily.  The real fear was that socialism would overcome capitalism.  Any economist who has taken basic economics knew from the beginning that a centrally controlled economy could not survive. The Chinese, now our friends, primary source of war funds, and trading partners, are still communists but they have learned that allocation of resources has to be made by the market.  And we have learned, though it is denied by the media, that the real threat to a free market is not socialism but unrestrained corporate capitalism - just as Adam Smith told us. 

Another distraction from the real problem of the economy, is immigration reform.  Again, don't look for anything significant to happen.  The corporations like it as it is.  Plenty of cheap local workers who can't vote and who aren't likely to form unions.  It isn't an accident they're here.  They were brought here.  Just as the migrant farm workers were lured to the west during the Dust Bowl with promise of work, the Mexicans, mostly Mexicans, were brought here with the same promise.  But this was even better. They were told not to bring their families and not to stay too long. They found out in 1935 that the "Okies" could think, vote and form unions.  They weren't going to make that mistake this time. There is a problem here, however.  Typical of corporate fixation on the short run and the next years bottom line,  they didn't look at the future. The new workers didn't necessarily bring their families, they stayed too long and made families.  Now we have children who are legal with parents who are not and the children who are legal can vote...and think, and the average Gringo got hooked on the cheap labor; folks cutting their grass, cleaning their houses, waiting tables and working in doctor's offices.  

As we found out in the last election, they tend to vote democratic.  They are not to happy about the threat of busting up families - sending part of the family out of the country.  The corporations have created a monster.  Now they are scurrying about looking for a way to make these people vote for them without helping them.  Guns, Gold and God worked on the low information Gringo voters but it hasn't as yet worked on the new voters as more and more politicians have learned that they can make the case that God likes poor people and too many professed Christians don't. But don't expect any significant improvement.  

The GOteaParty is contented now in just shutting down government. Of course this will hurt them eventually but not on next year's bottom line.  Globalization will delay the day of reckoning for the corporations and the one percent but it will come.  In the meantime, Obama will claim victory with some trivial change in the gun laws, he will get more Latino voters when the GOteaParty blocks immigration reform, more black voters as it becomes more and more apparent that their best hope is with the Democrats,  gay and lesbian voters will continue to vote democratic and the country will become even more divided.  Gerrymandering will keep the House Republican, the Republican Party as we have known it in the past will die and corporate feudalism will become more and more entrenched. 

So what happens next if intervening legislation is not passed? The cuts will take place over the next years but the effects will start showing up in April. The one good thing that will result from sequestration is that we will learn that the Pentagon budget has been bloated as our national security isn't effected by the cuts to their budget. The bad thing is that unemployment will rise, wages will go down and the middle class will disappear.  We will come to accept 15% unemployment as normal. The corporate press will blame the depression on Obama because he was in office; just as the crash of 1929 was blamed on Hoover. The fact is that neither were able or willing to control the forces that brought the economy down. The difference is, Obama says all the right things.  

Good Reading

Wednesday, March 13, 2013

Kickstart the economy with housing - just like the good old days.

In 1945, at the end of the big war, the national debt was $260 Billion.  It was a whopping 116% of Gross Domestic Produce (GDP) the total value of what we produce. At the same time, we had over 8 million people coming home looking for jobs. Both parties thanked them for their service and everyone meant it. Truman and the Democrats felt a government obligation to help them. Republicans were more concerned with the deficit. The bill was for the most part bi-partisan but most of the opposition came from the Republicans who nearly stalled the bill.  There was a lot of resistance from the right who were concerned with the deficit. Keynesians argued that the increase in the tax base with people becoming employed would soon offset the deficit spending. This is the same argument of 1935 and the same argument of 2013.

One of the major factors in the recovery was the housing market.  An essential element of the GI Bill was low interest, no down payment loans to buy homes.  The result was an unprecedented acceleration in home construction.  I personally entered the construction trade out of high school in 1948. Hillsides were turned into neighborhoods overnight. I worked in a tract in 1948 that was putting up 50 homes a day.  When I finished my work (lathing) on one job, I had to drive to the next one because it was too far away to carry my tools. The result was well paying union jobs, affordable homes  not just for veterans but for young people reaching the age to start families. Along with education benefits the boom helped build the largest middle class in history - the USA or elsewhere!

As a result, the annual deficit, initially intensified by the government outlay, went from $47.6 Billion in 1945 to a surplus of $6.1 Billion in 1951. As a percent of GDP, our debt went from 116% in 1945 to a low of 24% in the 70s. Typical houses were small, by today's standards. A typical home had around 1200 square feet and a bath and a half. Most had back yard large enough for the favorite past time of the 50s, the backyard BBQ. The period from 1945 to 1975 give or take a few years was the greatest time for middle America.  We know what happened after that.

Today we are faced with another economic milestone - this time a crisis.  We have an anemic recovery from a recession caused by wild speculation,  that would have been illegal under the Glass Steagall Act, and a bootstrap housing market that collapsed from it's own weight. Again, conservatives are in a panic, of claim to be so, over the debt which is not even close to being the highest as compared to the GDP.  To put it in the family budget terms, which is what the deficit hawks like to do,  if the family income is high enough to pay the monthly bills, there is no problem.  Very few families have an annual balanced budget.  Who isn't making house and car payments?  Obama has been forced into focus on the deficit rather than on job creation but the answer is not austerity. He talks about investment on infrastructure and energy innovation, and that is good, but there is another area where there is a fountain of new jobs and better lives for Americans.  Like 1945 there is a dearth of affordable homes.

One of the signs of the economic recovery are home sales and new home starts.  The problem is the new starts are in the same neighborhoods and price range as they were before they were suspended because of the crisis their market created.  Hopefully, the financing will be better controlled and people will buy what they can afford - but don't count on it. The banks are still in control and do pretty much as they please.  Instead of the homes people were buying in 1950, homes that were modest and affordable, this is the typical home you see going up today.

How many people working on this house can afford to buy it. Where are the people who work on it going to live.  Without thinking of the morality of building homes that the average, or low income, family can afford, it would be good for the economy and for the people of this country for the government to encourage a mass program of building affordable housing as they did in 1945.

The people who bought those homes and lived in them are the backbone of this country.  That is what government is for, helping people.  Corporations are not people.

Good reading

Tuesday, March 12, 2013

The twilight of the American Empire

I’m glad I won’t be around to see the end. This isn’t the America I grew up in! America doesn’t make things anymore. We just finance those foreigners who do and swap money around. We have become a country of money changers. As a percentage of Gross Domestic Product, manufacturing has fallen from a 28% in 1945 to 12% in 2010.  For someone my age, you don’t need statistics to know this. In the 50 years since our middle class reached a peak in the 60s, our work force has changed from blue collar to white collar. Not that there is anything intrinsically wrong with this; it’s a symptom not a cause of our employment problems which began in  2008.

Looking back at the days when I was a young married man, most everyone I knew either worked in the building trades or in factories; mostly small family owned factories but some worked in large corporate factories. There were a few bookkeepers and accountants and sales people. I had some friends who taught school and some who ran their own small businesses. We were the new middle class produced by the social legislation of the New Deal and educational opportunities provided by the GI bill.

Low cost real estate loans not only provided affordable housing for millions of Americans, it provided well-paying jobs for construction workers.  Housing developments sprang up all over the country. What was nice about our country then was that most of us knew our boss. The furniture, clothing, cars, and most everything we spent our money on was made in America.

But something happened on the way to Utopia: Ronald Reagan and his supply side economists were not satisfied with enough and had no stomach for sharing. They resented the limitations that the New Deal had placed on them. They wanted to return to the unfettered financial manipulation of the 1920’s, the kind of wheeling and dealing that caused the Great Depression. Thanks to Reagan, the Bush’s and Clinton, they got their way.

One of the barriers to getting more of the pie was organized labor. Reagan’s amnesty brought in hundreds of thousands of union busting laborers. That took care of the jobs that couldn’t be exported and the free trade agreements enabled the burgeoning world of multi-national firms to export the jobs to countries where virtual slave labor was abundant.  Wal-Mart whose sales exceed the GDP of many nations, including Sweden, Austria, Norway, Denmark and Saudi Arabia, is the epitome of the misery free trade has wrought and is invisible when you buy a shirt from them; a shirt we could still afford if it were made in the USA by workers earning enough money to buy a shirt themselves.

What we are seeing today, with this economic crisis is the fruit of the 30 years of Reagan’s supply side or trickle-down economics. Until, and unless, we reverse it and return the jobs back home through the Alexander Hamilton-like protectionist trade policies, most of us will be standing at the door of the elevator waiting for the driver to return and take us back up to an upper floor with 10% unemployment being the norm.

“President Grover Cleveland in the 1888 State of the Union address had this to say:
“The gulf between employers and the employed is constantly widening, and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor.

As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.”

This unsustainable condition continued to retrogress until it reached a point in 1929 where the system collapsed from lack of consumers who could afford to buy the products they were making. In 1928, one year before the global economic collapse, the wealthiest .001% of the U.S. population owned 892 times more than 90% of the nation’s citizens. There are many micro theories for the collapse of the economy then but the lack of consumers permeates all of them. As bad as it was then, it’s worse now! Today, the top .001% of the U.S. population owns 976 times more than the entire bottom 90%. This again is not sustainable, and makes for a very volatile economy.

The recent financial crash was a result of too much money in the hands of too few people who had nothing to spend it on. Their larder was full! Had it not been for help from the government, we well may have had a collapse worse than in 1929. Bailing the banks out, however, did nothing for the average American who was thrown out of work by the collapse of the building industry and the collateral reduction in business activity. The obvious reaction would be a healthy application of Keynesian Economics. Ironically it was resisted by the very ones who survived only because of it; financial aid from government. The decision by the Supreme Court giving corporations all the privileges of being deemed a “person” without any of the responsibilities enabled them to funnel money into the electoral process and determine the outcome of elections.

We literally, now  have a government at the federal level that is de facto owned by international corporations. With the weakening of our government as a protective entity, we are in real danger of becoming what Marc Bloch describes as a “feudal society” in his book by that name, with government by, for and of the rich. It’s a cold hard fact that there is no such thing as laissez faire. It can’t exist for long. Either you have a government that controls business or business that controls government. A healthy stable economy requires a balance – as we had from the end of WWII until the slow dismantling of New Deal legislation and the rebirth of supply side economics. Capitalism is a harsh appeal to selfishness and unchristian darwinistic survival of the fittest. Its sole redeeming quality is that it has been very effective at producing goods and it will only continue to do this as long as good government prevents it from emasculating itself.

I won’t be here but our progeny will. We have four children, all adults now, of course, 14 grandchildren and 5 great grandchildren. In addition, our brothers and sisters all have children and grandchildren.  I can’t count the cousins. I am not able to wash my hands of the whole mess that greed and selfishness has made of my country because my genes will still be around…until the end. Every living organism has a life cycle; birth, growth, maturity, degeneration, atrophy and death. The same is true of states/empires. All have fallen and all will. I believe the end of the United States as a great dominating empire is about here. I think my generation’s life cycle runs parallel to the blossoming and impending fall of our nation as an exceptional society.

There are multiple reasons given by historians for the fall of the Roman Empire: Here are a few that are most applicable to the USA, the most dominant empire since Rome:
  1. Antagonism between the Senate and the Emperor (Legislative, Executive and Judicial)
  2. Decline in Morals
  3. Political Corruption
  4. Fast expansion of the Empire
  5. Constant Wars and Heavy Military Spending
  6. Failing Economy
  7. Unemployment of the Working Classes
  8. Decline in Ethics and Values

While all of these problems exist in the United States,  the most dangerous ones are the wars and the economy. The other six exacerbate the two primary problems.

"The American people, it seems, are bored with war. Like a reality show that's gone on too long, it ceases to shock, shame or even interest. Recently, when pollsters asked what the most important problems facing the country are, just 3 percent mentioned Afghanistan, the war of choice at that time. Even when combined with Iraq it had not reached double digits for several months. In a CBS poll it did not register at all. A Pew poll the same month found that just 23 percent said they were following the situation closely. And they do not like what they see. Polls show that 60 percent of Americans believed Afghanistan is a lost cause, and roughly half compared it to Vietnam and favored a timetable for withdrawal."

The war profiteers have done it. With the help of two administrations, including Obama’s, they have converted an act of mass murder into an endless war attracting very little public concern.  The rich folks' kids are not involved, there is no draft, the voters were distracted with an extension of a deficit bulging tax cuts and we are borrowing from a communist nation to pay for it. What's not to like, at least until some future group of voters are forced to pay for it....somehow. And the profits just keep rolling in.

As Milo Minderbinder, the war profiteer extraordinaire of Heller's Catch 22, said,
"In a democracy, the government is the people, Milo explained. "We're the people, aren't we? So we might as well keep the money and eliminate the middleman. Frankly, I'd like to see the government get out of war altogether and leave the whole field to private industry."

Halliburton Chevron, ExxonMobil, Blackwater and many others, with the swinging door between the Bush White House and the corporate world, has made this a fait accompli! America has become, or maybe I should say has been for some time, the most war-like country in history, only now the corporations are in charge. How has this happened?

Personally, after serving reluctantly during the Korean War, I was through with war, or hoped and thought I was. I believe most Americans felt the same way. Then along came Viet Nam, a totally political and needless war. I think that, for the most part, our government was honorable in its first. It became more and more political, more and more deadly and more and more needless. It ended tragically and we lost. We were no longer undefeated.

Again, many of us were through with war and hoped that the USA was too. Wrong again. There are just too many people of power who benefit or think they would benefit by war. I won't go into those people and their reason now but they learned a lot from Viet Nam; to the extent possible, isolate the public from the war. The Neocons made sure the military was all volunteer...avoid the war awareness that democratic participation produces! Avoid public awareness of the true cost in human life and fiscal cost by privatization. Who cares that a private contractor, a mercenary, is killed? Avoid contemporary awareness of the fiscal cost by borrowing. Who cares about the war if we are not taxed and are not required to make ANY sacrifice?

9/11 provided a fortuitous opportunity for making war. Of course, we made war with the wrong country and with tragic consequences but a profitable war all the same; and that's the important thing to Milo Minderbinder and the Dick Cheneys of the world.

Now, in addition to fighting in Afghanistan and Pakistan, we've become embroiled in still another never ending war; this, while we are occupying South Korea, Iraq, and in a sense, Germany and Japan. We will stay in these countries indefinitely relieving their governments of the expense of a military, and who knows how long we will stay in a shooting war in Afghanistan or how involved we will subsequently be in Libya, particularly now that nobody really cares and of which fewer and fewer will be aware. Make no mistake about it, pulling our troops out of these countries doesn't end our involvement or expense.  They are replaced by private contractors or American trained and financed locals - whose loyalty is questionable.

The attack on the middle class is more insidious than the attack on the Twin Towers. The plight of the Libyans is truly sad. The plight of 15 million out-of-work Americans and their families is sadder and it is at home, where our military should be.

What does this portend for our national well-being? Wealth is usually needed to underpin military power, and military power is usually needed to acquire and protect wealth. While worrying about their foes, states playing in the world arena must constantly maintain a delicate internal equilibrium. Armies are required for security, but they cost money. Military superiority by itself is often deceiving, since it may be weakening a state's ability to compete economically and fund future conflicts.

The combination of the U.S.'s declining rate of industrial growth and its extensive military commitments spells trouble: "Decision-makers in Washington must face the awkward and enduring fact that the sum total of the United States' global interests and obligations is nowadays far larger than the country's power to defend them all simultaneously." Even aside from this dilemma, American dominance is on the wane, not because the nation is growing poorer or weaker but because others are becoming richer and stronger. We can expect both China and Japan to improve their shares of world power; if the European Community can submerge national disputes and agree on common goals, then it too will find its wealth and influence increasing. The Soviet Union possesses a vast military machine and a stagnant economy; uh-oh for the U.S.S.R. India could be an awakening giant.

It simply has not been given to any one society to remain permanently ahead of all the others.  The threat to the interests of the United States can come from a failure to adjust sensibly to the newer world order.  I see no American  leaders or movements on the horizon that will recognize the fact that a healthy survival depends on our accepting a diminishing status gracefully. But until it is convincingly refuted by other theorists or the years ahead, The rise and fall of the great powers stands as a fascinating response to ancient questions about the life-span of nations.

So who will survive longest, me or the USA?   The International Monetary Fund has just announced that in 2016, China’s economy, the sum total of what she produces, will exceed ours so I’m betting on myself. How ironic that our Nation, our independence from England, resulted from a reaction or aversion to a giant corporation, The East Indian Tea Company, receiving tax breaks from the government – which in reality, it owned; and the end of our nation, as we have known it, may well result from our desire to give tax breaks to corporations - which, in reality, own the government.  I see no Eisenhowers, Trumans or Roosevelts on the horizon and my doctors tell me I’m in for 100!

Recommended reading.

Saturday, March 9, 2013

Enjoy the good employment reports while they last

Enjoy this jobs report because, along with the March report, which comes out in April, will end the positive reports.  These positive reports prove several things. Obama’s economic program has been working.  Despite the bleating of Boehner, McConnell and the Teaparty 51, we know that raising taxes on upper incomes does not negatively affect job creation.  Its only effect is on the size of the deficit.  We also know that the government jobs lost have prevented the unemployment rate from being even lower. Thanks to deficit panic by members of both parties, slashing government spending and jobs, has led to a weak recovery. If government employment had just held steady since the end of 2008, instead of cutting more than 700,000 jobs, the unemployment rate would be 7.2 percent today, noted the Wall Street Journal's Justin Lahart.

The government job losses can be attributed largely to cuts to the stimulus package forced by republicans. Paul Krugman predicted early that the package was just too small for anything but an anemic recovery.  He also found fault with the elimination of aid to local government.  He and many other economists called for a second stimulus.  Never-the-less, job creation is better than job loss and the free fall was prevented by Obama medicine.  The problem is the damage has been done.  It started before Obama dreamed of being president.  The unions are toothless except for a few industries.  Exporting jobs and importing cheap labor has assured a glut of cheap labor for our lifetime without drastic government intervention.  Unfortunately, the creation of the Teaparty out of an olio of people so divided in their unhappiness that the only thing they could agree on was blind, irrational, racially motivated hatred for Obama.

Many are giddy over the success of the Dow recently.  Now more than ever before, success for this group of businesses is important only to a small group of people.  For one thing, it consists of only 30 corporations.  Ten of them do not hire people or make things and none of them have created a job since before the crash of 2008. For those who think that it means the economy is not headed for trouble need to remember that in early September, 1929, it had reached record highs as people went crazy buying with borrowed money even as firms had started laying off workers.

When President Calvin Coolidge delivered his 1928 State Of The Union address, he noted that America had never "met with a more pleasing prospect than that which appears at the present time." Americans had a lot to be proud of back then: World War I was thoroughly behind them, radio had been invented, and automobiles were growing cheaper and more popular. Sure, the disparity between the rich and the poor had widened within the past decade, but Americans could now buy goods on installment plans — a relatively new concept — and families could afford more than ever before. Stocks were on a tear: between 1924 and 1929, the Dow Jones Industrial Average quadrupled. At that time, it was the longest bull market ever recorded; some thought it would last forever. In the fall of 1929, economist Irving Fisher announced that "stock prices have reached what looks like a permanent plateau."

Make no mistake about it, the Wall Street experience will not be reflected in the Main
Street experience.  There were a lot of things different then but there were more things that weren’t.  The disparity in income was at an all-time high then and it is again.  The average worker then was growing more and more unable to purchase the product he made then and it is the same today.  What is different today is globalization.  It’s hard to predict just how the upcoming fall, assuming that there isn’t a correction made in sequestration,  will develop; how long will it take to play out and how hard will it hit.  The major corporations today are global and have no loyalty to the United States – its government or its people.  Today, thanks to so-called free trade, it not only has a global field for cheap unprotected labor, it has a global field for a search for middle class consumers.  But this is limited too.  As the downturn spreads, fueled by the conventional wisdom of austerity, they will run out of a market anywhere.  It’s unlikely that they will find one here unless our middle class can somehow be restored and rejuvenated.  Once again, capitalism, blinded by short term bottom line, will self-emasculate through greed.  

What is stopping agreement other than the greed and fear of Obama success?  The Teaparty wants to reduce the deficit by cutting Medicare instead of making Bank of America pay taxes and cutting the oil subsidies.

Recommended reading.

Friday, March 1, 2013

Time for a commercial - My new book is out...

Title is Bartlett Ferguson: 4 generation family predator.  A novel based on cases I've seen as a police officer

Bart Ferguson was born in Stillwater Oklahoma to a dysfunctional family. His father was a drunk and molested his daughter who fled to California.  He abandoned the family when Bart was young.  Bart was bright but had to leave school early to help his mother.  His proclivity for sex with young females emerged when he was a teenager and he was caught molesting two of his young cousins.

He was forced to leave home and matured while “riding the rails” as it was called in the days of the depression.  He was industrious and bright but remained uneducated.  He was a gifted mechanic and had a good head for business but he was ignorant and professed knowledge he didn’t have.  He was crude and short on personal hygiene.  He arrived in Long Beach, California and found work as a mechanic.  He located his older sister, Olivia, a divorcee with two children and they became a family.  Once again, his compulsive sex perversion got him in trouble.  Livie discovered he had molested her daughter by manipulating her vagina with his finger.  She moved out of Bart’s home and remarried.  Her new husband learned of Bart’s molesting his new step daughter, Bart’s  own niece, and forced him to leave the area.

Bart ended up in the army and was very successful.  His skills as a mechanic gave him a part time business while at Fort Hood and made him popular with the officers who exploited his skill.  He married  Mattie Harper, a young divorced mother from California.  Mattie caught Bart manipulating her sexually while bathing her and beat him unconscious with a hand mirror.  He was cashiered from the army without prosecution.  He returned to California and set up a successful auto repair shop in Gardena.  While there he met Connie Cross, a young woman with two pre-teen daughters, Nancy and Mary.  Their father had been killed in the war. It was a situation made to order for Bart; a beautiful wife and two new victims. 

Bart and Connie were married and Connie’s family, the Rileys, adopted Bart as one of their own and accepted him, more or less, as their intellectual leader. He wasted no time on attacking his two new step daughters.  Mary, the younger of the two, resisted verbally while Nancy was totally intimidated and was abused for years until she left home and married.  Mary married a young man, Bruce McDougal who had been in the army; he immediately clashed with Bart. Bruce worked in construction and then became a police officer.  Ironically, Bruce knew the family of Bart’s first wife, Mattie. She had returned to Riverside and was in the real estate business with her father. When Bruce retired from law enforcement, he built house for Mattie and her father in the Riverside area.  Bruce was married to one of Bart’s victims and was in business with another; and unknown to him, he was the father of two more.  Bart continued his criminal rampage on his family for years, victimizing Nancy’s daughter, two of Mary and Bruce’s daughters, and his own blood granddaughter.

He was exposed when his wife Connie died and Bruce and Mary’s daughters saw evidence after Connie’s funeral that he was molesting his great granddaughter.  His exposure led to a complete and irreparable schism in Mary and Nancy’s families.  Nancy’s family chose to marginalize and even forgive Bart’s crimes in hopes of inheriting his money. Bruce, who had found out that his own daughters had been victims, became focused on making Bart pay for his crimes. Bart was tricked into a taped confession by a family member of his first victims back in Oklahoma.  Even with the incriminating results of a lie detector test that Bruce had forced him to take and the taped confession,  Nancy’s family never acknowledged his guilt.  Nancy was prosecuted for forging Bart’s signature on a check.  She pled guilty and received probation.  Bart died in disgrace and virtually friendless but still defended by part of the family.