It Really Is the Economy, Stupid — This Time, Let’s REALLY Change It!

You know, one of the greatest frustrations in being somewhat liberal is the tendency for others of my ideological ilk to demonize individuals, and to focus on specific people as "the problem."

Our economy is damn close to a total meltdown, and we’re closer to being a Third World country than at any time in our history. In a system that purports to be capitalist, we the taxpayer are now expected to bail out these "Captains of Industry" to the tune of $1 TRILLION, just to prevent the collapse of the economy.

Let me make something clear here, folks. This is not the fault of a few select individuals; it’s about ideology. This election represents a turning point for this country. It’s not about Republican vs. Democrat, it’s not about Obama, or McCain, or Bush and Cheney, or Palin. This election is about repudiating an IDEOLOGY; an ideology that has kept us stagnate since the far right took over the government in 1981, that has managed to make the economy look better than it was with a series of bubbles and an unprecedented amount of debt, and which has pushed us to the brink of economic annihilation.

A good economy makes things and sells them for a profit. A good economy provides good jobs for as many people as possible, and pays them enough to create a good life. A good economy encourages entrepreneurship.

We do not have a good economy, and we haven’t for at least 35 years. We started to recover in the right way under Bill Clinton, because he guided programs that propped up the bottom rungs of the economy, and he encouraged manufacturing and increased trade. But overall, our economy has been shipping most good jobs overseas, pay has been largely stagnant since the mid-1970s, and the level of actual entrepreneurship is so low as to be frightening. And has anyone even begun to comprehend the amount of debt we hold as taxpayers? We’d better start thinking about it, because that debt has to be paid back at some point. And the higher that debt goes, the harder and more expensive it will be to borrow money later. And since we’re currently counting on borrowed money just to make ends meet in the current right wing economic environment, that will eventually cause us serious problems in the near future. 

And no matter what the people on the right tell you, make no mistake; it’s not liberal policies, or free-spending liberalism, that is causing our economic problems.

The culprit is a right wing Republican ideology, which takes money from the poor and hands it to the rich. They still push the completely discredited concept of "trickle down economics," even though it’s been nearly 30 years, and the only thing that’s "trickled down" to the poor and working classes is the urine from the rich fat cats who have made out like bandits on your dime, and who are proceeding to piss all over you.

This election is about returning us to an economic model that worked, and abandoning the failed economic policies of a generation of right wing Republican theory that has proven itself to be both economically and morally bankrupt. Again; this isn’t juast about a difference between Obama and McCain;this is about  complete change in mindset; to making people count again.

Our economy used to work. The post-War period featured the greatest growth of any economy in the history of the world. We made goods, and sold them all over the world. American goods were the greatest in the world. We had a baby boom, largely because the entire economy thrived, from top to bottom. We still had poverty, but it was largely contained. The rich got richer, but so did the middle class and the working class. Inflation was not a problem, and it was possible for a family to be raised with one income.

We had some problems in the 1970s. When the gold standard was eliminated, the Nixon Administration immediately started solving economic problems by printing more money. The Democrats in Congress went along with it, of course, and that’s why we entered the "stagflation" era.

Jimmy Carter tried to solve the problem, by tightening the money supply and raising interest rates. His strategy worked, but not soon enough. Ronald Reagan took credit for stopping inflation and for economic prosperity, but in reality, his administration was the beginning of the right wing era of economic smoke and mirrors; an era which continues to this day. It is a shameful era, in which the rich were allowed to dismantle the economy, to the point that the only thing the United States has to sell is the dollar.

The Republican economic model is an abject failure. It is not only structurally bankrupt, it is morally bankrupt. The Republican model takes money out of your pocket, and hands the money to rich special interests, which goes against the American ideal. In fact, the Republican form of economics is very much like that of the Soviet Union; more like the Soviet Union than should make anyone comfortable.

See, the way the Soviets worked was, they allowed individual cronies to set up and run businesses to provide people’s needs. If someone failed in their business, the government took it over and gave the business to someone else. Sound familiar? 

Think about it. The same people who (rightly) had a conniption fit when Jimmy Carter (succesfully) bailed out Chrysler in the late 1970s, now seem to have no problem bailing out every friend the Republican Party has ever had, at the same time they have deregulated just about everything, thus ensuring that we’ll have to continue bailing these companies out for many years to come.

This is not a new phenomenon, either; it’s as old as the right wing Republican government itself. And all of it — and I mean all of it — is a result of the right wing Republican obsession with government regulation, and their desire to eliminate all of it, as well as their near-religious obsession with the concept of "free market."

There are several catch phrases to watch out for when a Republican talks about economic issues, and we’ll discuss a lot of them, but the biggest Republican joke phrase of all has to be "free market." When Republicans talk about a "free market," they mean "unregulated market," and no capitalist market can ever be unregulated. EVER.

The Founding Fathers placed regulation of commerce in the Constitution for good reason. Pure, unregulated capitalism is extremely dangerous. Without it, we have to trust that everyone who takes money from us is absolutely open and above board, and not at all a crook. We license lawyers to make sure they have expertise in the law. We license doctors to make sure they have a certain level of medical expertise. We license contractors, in order to assure the public who hires them that they have at least a minimal level of expertise. We license drivers for the same reason. And all licensed individuals are subject to a certain level of oversight, and required to follow a certain ethical code, in order to keep practicing their craft.

Republicans have successfully removed such oversight from most markets, especially financial markets, over the last 30 years. The reason we’ve been subject to the series of economic bubbles that have left us on the verge of economic collapse, is because Republicans refuse to regulate financial institutions to any great degree, and they refuse to enforce the regulations still on the books to any great degree. The climate they’ve created has allowed businesses to get bigger and bigger without oversight, and it’s allowed virtual monopolies to develop all over the economy. And then, when the these companies and other financial organizations operate with impunity, and take unnecessary rish with your money, they offer them more of your money in a bail out.

Of course, the current round of bailouts were all necessary to prevent economic collapse. But at what point do we begin to examine the policies that LED to the bailouts being necessary in the first place?

One of the more accurate indicators of economic problems in any country is the size of their national debt, and ours is by far the largest in history. (in fact, if we were to actually audit government spending over the last eight years, the national debt is probably far higher than the $10 trillion they’ll admit to.) We have continually run huge deficits for nearly 30 years, with the only exception being four years in the late 1990s. A large deficit demonstrates a problem for several reasons. One is obvious; the government is spending more money than it has on hand, and is forced to borrow to make ends meet.

But it’s more than that. If an economy is healthy, then there is little or no need to spend as much money, and there should be plenty of money to go around. In other words, if there is a huge deficit, and there is no obvious crisis, such as a World War II or a Great Depression, look at the deficit as a warning sign. If there is full employment, and everyone is making a living wage, there is absolutely no need for a deficit, short of an emergency.

Think about it. I’m not talking about tax rates; I’m talking about tax collections. If everyone was employed and making a decent wage from a solid reputable employer capable of providing that employee with full benefits, at our current tax rates, which are the lowest in 60 years, we should not have to be running such incredibly high deficits. If you look closely at the economic numbers, the problem is that fewer people are paying more of the taxes, and those "more people" are not rich.

The fact that Republicans seem to shrug at the deficit as if it’s no big deal is a much bigger problem than most realize, and indicative of the approach they take to economy. They’ve been shipping our jobs overseas, allowing businesses to relocate offshore to avoid taxes, giving tax breaks to companies that certainly don’t need them, and they’ve all but decimated the Sherman Antitrust Act, which has resulted in the development of virtual monopolies all over the economy. In addition, because of the lack of oversight and accountability, "speculators" have been allowed to hedge our future, and even make money from economic loss. Yeah, that’s right; the system is so screwed up, there is a significant sector of the financial community that makes money when you lose money.

Look around you, folks.The signs of economic incompetence on the part of Right Wing Republicans are all around you. And at the heart of it all is something that call a "free market," but which is anything but.

A new shopping center opens in your neighborhood. There may be 20 stores, but all but perhaps one will be a chain store of some sort. That sounds like a good thing, right? The newest restaurants are chains; either assembly-line style sit-downs
or fast food. Pretty much all hotels and motels are parts of chains.
Big box "home improvement stores" have replaced the local hardware
store, and discount chains have replaced pretty much every other local
store. Independent book and music stores have gone by the wayside as
chains have swallowed up everything around them. But because a lot of chains have "low prices," because they’re able to streamline things. So, what’s the problem?

The problem is the "low prices" are a direct result of the displacement of jobs from the United States to other countries, who are able to offer lower wages, and conditions we would never tolerate for workers here. In addition to bidding so low, US manufacturers can’t compete, they also offer low wages and few, if any, benefits.

Now, you may think this is a good thing. After all, you like low prices, right?

Well, let’s start with the fact that the prices aren’t really all that low. But these companies sign huge exclusivity agreements with foreign manufacturers, and lock other entrepreneurs out of the system. And while the chains may be making a boatload of money from their cheaply made Chinese junk, they make is almost impossible for a small entrepreneur to enter a market with American-made goods. American-made goods would be of higher quality, and could be sold for little more than the Chinese junk sells for. The problem is, because there is such a huge margin on most of the Chinese crap, it’s possible for the chains to reduce their margins in some stores to knock back the "threat" to their sales of foreign goods by sales of American goods.

Yes, folks; that is the Republican idea of "free market," and that is at the heart of our economic problems. We actually have a right wing regime that is protectionist in favor of foreign goods. It’s why we have the largest trade deficit in history, and why our national debt is as high as it is. The right wing Republican ideology considers it a "free market" when a poor country competes with our country in manufacturing, despite the fact that there is no even playing field.

The Founding Fathers put the Commerce Clause in the Constitution in order to prevent just the sort of thing that has popped up under right wing Republican rule.

There is no "free market" under the Republican system. A real "free market" is all about equal opportunity for everyone, which has pretty much been stifled. Of course a poor country can produce a shirt for a quarter. But why should the fact that we can’t produce a shirt for under a dollar lock us out of our own market? Chains and huge conglomerates are screwing us royally, and  right wing Republicans think it’s a prime example of how "free markets" work. The purpose of the commerce clause is to equalize everyone in the marketplace, and thus far, after nearly thirty years, there are no signs the Republicans buy that concept whatsoever, and we, the taxpayers, get to pay for it.

Under a truly "free market," competition thrives. There used to be competition for your dollar; now, there is almost none. It’s gotten to the point that increasing numbers of companies are being forced by manufacturers to charge a specific price for a product.  Seriously; look around. Have you priced video games and video game systems? Computer equipment and accessories? Have you seen any sales on MP3 players recently?

Consider the price of gasoline. Have you heard the morons in the Republican Party crow about "drilling" as a panacea for gas prices lately? How many of you were stupid enough to fall for it? Well, don’t fall for it; it’s bullshit. There hasn’t been a "free market" in oil for nearly 40 years; a fact that was made clear back in 1973, when OPEC embargoed us, and made us cry "Uncle!" Have you noticed that, when the price goes up at one station, it goes up at the other stations, as well? Doesn’t that seem strange in a competitive environment? In a truly free market, why wouldn’t one oil company make a deal with an oil producer to lock in the price of a barrel of oil at a low price, so that they could sell gas for a dollar a gallon less than everyone else?

There is little to no competition on anything anymore. When inflation drives up the price of something, it goes up  everywhere, and when the price drops, it drops everywhere. Once in a great while, a chain will do something "bold," like a "dollar menu," but the effect is to essentially kill off any small competition, who will probably not be able to sell a double cheeseburger for $1; certainly not by selling American beef.

This is not a blanket condemnation of chains, by the way. Chains themselves aren’t inherently bad, except when they move into an area, kill all independent commerce  in said area, and then proceed to pay sub-standard wages to their employees. Some chains, notably Starbucks and Costco, actually prop up the tax base in the areas where they locate. You can say the same about companies like Neiman Marcus, JC Penney and Nordstrom. They pay good wages and benefits, and support the community while doing so.

And chain stores would almost never be a bad neighbor if the government did its job, and protected the people who actually hire them to work for them. The government is supposed to work for us, not the other way around, but right wing Republicans seem to prefer the authoritarian model, where they tell us what’s best for us, and we’re supposed to sit back and do what they say.

The heart of the economic problem that now plagues this country is that Republican policies have decimated the workforce in this country, and thereby killed off a significant portion of its tax base. It might make sense to cut taxes for the rich, if the rest of the tax base was healthy, but it’s not. We are increasingly becoming a nation of rich and poor, as the middle class simultaneously shrinks in size and is being forced to pay a larger share of the tax burden.

I know it’s fashionable for the far left to suggest that the solution to our problems is to raise taxes on the rich in order to make things better, but it’s just not that simple. The problem we face is a complex problem, that won’t be so easy to solve.

But here are some suggestions for approaches to solving these problems.

First, we have to change our point of view. Economy is not just about money;; it’s about people, and it’s about creating a foundation for the future. As a society, we have to stop looking at people as an expense to be controlled, and think of them as an investment to be nurtured. It is possible for a company to satisfy its stockholders and its employees simultaneously. In fact, they used to to just that for many years. The best days of General Motors came when the United Auto Workers Union was also at its peak. In fact, when a country’s economic base is healthy, so are all of its corporations.

The fact of the matter is, by enabling manufacturers to open factories here, employ people at a fair wage here, and provide benefits for them here, we will expand the number of taxpayers significantly, and spread the tax burden to a wider number of people, resulting in a lower tax burden for everyone. And to encourage entrepreneurship, we should also lessen the tax burden on small businesses, as well. It’s always a mystery as to why small business owners ever supported the current Republican Party, given that they’ve done everything to screw small businesses for 30 years.

We must remove all incentives for employers to relocate jobs overseas. In fact, we should be penalizing those who do. We have to protect domestic markets. We make better goods than other countries, and the fact that people here must make more money, shouldn’t lock American manufacturers out of the domestic market. In addition, we should eliminate tax incentives for businesses that relocate offshore so as to avoid taxes. One way to do this might be to eliminate corporate taxes altogether, and replace them with a Value-Added Tax on every item sold here, as most other industrialized countries have already done. A small tax on all goods sold in the United States would raise a lot of money, reduce the burden on small businesses, and equalize the market for entrepreneurs.

Income taxes should be paid on all income, regardless of the source. Right now, most high-income individuals pay little or no tax on most of their wealth, because the tax system exempts so many types of income. For example, the factory worker at Car Company pays taxes on virtually all of his income, while the CEO of Car Company can pay himself millions of dollars in "stock options" and avoid paying tax on that income, until he sells the stock. This is patently unfair. If the average taxpayer receives something of value that is not a share of stock, he or she is required to declare it as income and to pay tax on it. If someone wins a car on "The Price is Right," for example, he or she is taxed on the full amount of that car, while the CEO of the company that manufactured that car can take millions of dollars worth of stock and pay nothing. In fact, when an average taxpayer negotiates a deal with a credit card company to pay 50% of his actual credit card bill, the part of the bill that’s forgiven is considered income and is taxed, but the CEO of that credit card company can put millions of dollars into an investment account, and pay nothing.

That is the world the right wing Republicans have made. This is not a "free market" at all. It’s a very controlled market; controlled by a small number of very rich and very powerful individuals and conglomerates, who are operating with impunity, precisely because the right wing Republicans running the show have decided to cede their authority to those individuals and conglomerates.

Look at the health insurance crisis. It is a crisis, folks. It’s the stupidest system of financing in the entire world, but it’s tolerated, because a select few people are making loads of money from it, and happen to be friends of the right wing Republicans. Go to your employer and ask them how much your premiums are each month, and you’ll be in shock. If you are a family, you and your employer are paying, on average, more than $14,000 every year for health insurance. And the right wing Republicans scare the hell out of you, and make you think you have no choice but to carry this insurance. Meanwhile, your employer’s costs are far higher than they should be, meaning there’s little chance you’ll see a raise anytime soon, and the system continues to teeter on the brink of disaster. We spend more per capita on health care than any other country in the world, and 20% of us have no coverage, and no access to doctors, except through the Emergency Room. Not only that, but because right wing Republicans have defined health care as a "market-based" system, an inordinate number of people are pushed into the position of having to lose everything they’ve worked for all their lives, because they became sick at the "wrong time."

Last but not least, let’s look at our system of welfare. All countries have a welfare system in place, because in a capitalist society, there will always be a pool of workers who don’t work at any given time. But we are the only country that I’m aware of that does welfare on the cheap, and ends up costing itself a hell of a lot more money than should be the case. We could reduce the number of welfare recipients significantly, by implementing a few basic measures. For instance, provide free job training for welfare recipients, as well as free and acceptable child care for those who want to work, but can’t make enough to pay for it. We could also provide public works jobs for welfare recipients, including work at these child care facilities. Yes, there are people who cheat the welfare system, but more often, the welfare system itself perpetuates the dependence on welfare payments.

These are but a few measures we could take to alleviate the economic mess the right wing Republicans have caused. But this isn’t about getting rid of Bush, or defeating McCain. It’s all about changing the mindset in Washington, DC back to where we used to be. Instead of continuing to do those things that have resulted in disaster, let’s retry the things that worked before, and make them even better.

But make no mistake; it’s the ideology that has to go, not just the people.

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