by Milt Shook
I’m talking to you!
you think the economy’s doing? If you think it’s going great, raise your hands!
that’s a lot of hands… guess it’s going really well, then, huh? I guess, because
the government tell you how great it is every chance it gets, well, it must be
just great. I mean the numbers they put out every month indicate that the
economy’s moving right along. I mean, all of that growth! And unemployment’s
still kind of low, right? And hey — according to the Consumer Price Index,
inflation’s really not so bad, is it?
wait — isn’t this the same government continues to tell you that Iraq and al
Qaeda were in cahoots on 9/11? Aren’t these the same people who told us that the
war in Iraq would only cost a few billion dollars, take a month or two, and be
entirely paid for with Iraqi oil money? Don’t they tell us they don’t torture
anyone, while they’re torturing people? Didn’t they assure us that they would
never spy on us without a warrant, while they were in the midst of a plan to spy
on us without a warrant?
but they’re a bunch of greedheads, right? They love money! No way they would lie
to us about how well the economy’s doing, right?
yes they would.
Remember the economic doldrums we found ourselves in from about 1973 until about
the mid-1990s? It’s back with a vengeance. Forget the statistics, folks; use
your instincts for once. How do you actually
feel about the economy? Well, if you’re feeling good about it, then
you’re buying into the bullshit. Stop it!
your head out of the statistics and ask yourself, what’s so great about it,
anyway? They keep telling you everything’s wonderful, but name one thing that’s
gotten better in the last six years, besides the size of the limits on your
credit cards. Okay, maybe the security guard industry’s doing well lately, but
that’s about it.
let me start off by saying that, in pure dollar terms, we are still the 900-lb
economic gorilla when it comes to Gross Domestic Product (GDP) But there is more
smoke and mirrors there than you think. As taxpayers, we’ve saddled our children
with more than $9 trillion in debt, and a trade deficit that won’t be eliminated
in their lifetimes, either. Not only that, but we’re adding to the debt to the
tune of almost a half trillion per year, when you include the hundreds of
billions they’re skimming off the Social Security surplus. Our annual
expenditure for debt service is almost as high as our defense budget, which is
ridiculous. It’s not only the largest in the world; it exceeds the amount every
other nation in the world spends, combined. And to buy what? It sure doesn’t go
to pay soldiers’ salaries and benefits. It doesn’t go to body armor, or to take
care of soldiers when they come home. No, most of it goes to lining the pockets
of defense contractors. Think I’m kidding? Think of all of the high tech gadgets
the Pentagon brags about having, then ask yourself when any of it has been put
to use in any useful defense capacity. How many stealth bombers are we using in
Iraq? We apparently have the technology to be able to see a flea on a rock from
outer space and pick him off with a laser, yet, we’ve been looking for a
six-and-a-half-foot tall Arab carrying a dialysis machine through the Pakistani
desert for six years now, and can’t find him or his video studio.
I’m not saying we should stop making stuff for the Pentagon. God forbid; that’s
about all we manufacture anymore. Our entire manufacturing base seems to be
overpriced weapons systems, Japanese branded cars and a some computer
components. Aircraft industry giant Boeing’s highly anticipated 787 wasn’t even
built here; parts of it were built all over the world, and they assembled them
here. There is very little in our stores that is made here these days. I live in
Maryland, and even a lot of the crab meat you buy here comes from overseas.
economy started to tank in the 1970s, when the first of the Republican breed was
in charge, Richard Nixon. Nixon came from the Herbert Hoover school of
economics, that says, if you leave it alone, the scab will heal itself. When
inflation started in earnest, in 1973, his approach was to freeze wages and
prices for 90 days. I’d be willing to bet that any middle school kid can tell
you why that’s a stupid idea; when the freeze is lifted, the result is just a
steeper price increase. Nixon’s problem was that he didn’t believe in
regulation, if he thought it could be avoided, so instead, he chose
manipulation. His "banking" program for gasoline prices kept prices artificially
low, by giving oil companies subsidies for keeping the price under a dollar. Not
only was it a stupid idea, but it only kept gasoline prices low. Oil prices went
through the roof, and we the engine that drove that incredible inflationary
Nixon, we started closing plants here, and opening them up overseas, with the
government’s blessing. Whole sections of the country that had once been flush
with well-paid factory jobs, became the "Rust Belt." Companies which had used
American labor for incredible profits for many years after World War II,
suddenly complained about having to pay them at all, and decided that their
bottom line was more important than the country, and abandoned us for cheap
labor elsewhere. That trend eased in the mid-1990s, when Bill Clinton actually
made deals with trading partners, and factories began opening up a bit.
except for that brief period, which coincided with the government’s rare
exercise of fiscal responsibility, the Wingnut era of economic stupidity has
practically destroyed everything the GI Bill and the Marshall Plan built up in
the 25 year period after World War II. We have been lulled into a false sense of
economic security by a government that prints money as if it’s just, well,
paper, and which has supported an economic regimen that essentially consists of
moving large amounts of money from one pocket to another. It’s gone on for more
than 30 years now, although the real stupidity didn’t start until the 1980s,
under that economic genius, Ronald Reagan.
start out with one truism. Reagan did not win election in 1980 because of his
boffo economic plan. Jimmy Carter lost because he had the courage of his
convictions and really did try to stop inflation, by tightening the money supply
for a time. If that had continued, interest rates would have gone down, and
inflation would have gone back to normal levels. Did you know that a bottle of
Coke was a nickel in the 1930’s and a dime in the early 1970’s? A loaf of bread
was a quarter during World War II and about 35 cents in 1969. In other words,
for some reason, this country managed to function for many years without huge
price increases. Now, they happen every year, regardless of whether they’re
Reagan started the downturn when he came into office with the intent of
deregulating everything, and by regaling us with tales of "trickle-down," that
wonderful, magical "theory" (read "bullshit story") that, when the rich had more
money, they would invest more in those things that helped the poor. I challenge
anyone to find me any time in human history when a majority of the rich
voluntarily helped a majority of the poor. Sure, they’ll buy more stock, and
make investment that way, but as I pointed out; most of that money goes to
building plants overseas. In the past, the rich were faced with a high starting
tax rate, but could lower it by investing in infrastructure. Beginning with
Reagan, they got that lower rate without doing a thing. Meanwhile, we keep
saddling our children and grandchildren with more and more debt, pretty much
guaranteeing high taxes during their adult lives.
around you; where have lower taxes, deregulation and a near-unanimous refusal
on the part of Congress to enforce the Sherman Act gotten us? Well, those
policies have largely rendered entrepreneurship dead, unless you call placing
tiny little classified ads in newspapers and getting people to buy copies of
books on how to get rich entrepreneurship. Think about it; what type of business
can you start these days that isn’t dominated by some huge multinational
conglomerate? Forget just about any retail, except for high-end shops for rich
people. In the last 40 years, we have gone from a nation of really nice shops
that took on the identity of their neighborhood and their region, to a nation of
strip malls and factory outlets, full of the same businesses over and over.
you been to Times Square recently? I was there a few months ago, and some idiot
behind me was marveling about what a wonderful job former Mayor Rudy Giuliani
did in "rehabilitating" the area. I was thinking, he had to be kidding, except
that, when you think about it, Times Square has become what Americans are
accustomed to. I will admit that it’s probably better for tourists that the porn
shops and nudie bars are gone. But there is almost nothing in the area that
screams "New York," except the theaters. Who in their right mind goes to
fricking New York City and then hankers for some Applebee’s? (Yes, folks, there
is an Applebee’s, and a Bubba Gump Shrimp Company.) And the shopping is a joke!
Most of the stores are simply bigger, gaudier versions of the same shops you can
find in any suburban shopping mall in the country. That’s right, the famous
Times Square has been turned into a suburban shopping mall, and it’s no longer
possible for anyone to simply rent a little space and sell their wares, because
the greedheads have driven the prices way out of anyone’s range. You see, those
big chains are American business in the
21st century; a bunch of look-alike stores selling the same Chinese-made
garbage, which is cheap, but pretty much guaranteed to break if you actually use
Seriously, folks; we’re in deep trouble, economically speaking, and it’s only
our incredible mountain of debt that has been hiding the truth. Like I said;
most of our supposed "wealth creation" consists of moving money from one pocket
to another. Enormous debt has been built into our culture; we actually think
it’s "normal." It’s difficult to get a good job without a college degree, but
the only way to pay for college degrees nowadays is through student loans, and
lots of them. And not only does the average college student leave college with
mounds of student loan debt, but the same banks that make tons of money from
those guaranteed no-risk loans, also allow students to run up a huge amount of
credit card debt before they’ve even received a pay check from the career
they’ve trained for.
debt has given us the illusion that we are a thriving economy since the early
1980s. And why not? If I gave you an unlimited line of credit and said, "Buy
anything you want, and as long as you just pay me the interest, you can carry
the debt until I decide I need the money back," you could have a great time. You
could borrow money to make more money, and buy yourself a whole lot of bling, a
house, a few Ferraris — no one would ever know that you’re unemployed. But you
wouldn’t really be rich, and when I asked for all of that money back, you’d have
a hell of a time paying it, wouldn’t you?
debt has been sinking this economy for more than 30 years. Because of Republican
right wing economic policy, which takes a "social Darwinist" approach to
economic policy, we are now looking, for the first time, at a generation that
will do less well than their parents, in part because they will have to pay much
higher taxes in order to retire the debt we are leaving for them. Because of
their obsession with tax cuts as a panacea, their complete deregulation of
everything, a completely unrealistic approach to "free market" economics that
completely ignores the fact that there is no such thing, and their patronage of their rich friends, to
the detriment of the grass roots, they have sold us down the river, and it’s
going to take us a while to get back upstream.
do have an effect on the economy, but not the effect the right would like you to
believe. The tax code used to create incentives for investment. When the top tax
rate was 70%, for example, no one actually paid
70%. If a person or a company helped build economic infrastructure, they got tax
credits or tax deductions. In other words, if a company wanted to save money on
taxes, it had to invest in the country. Now, they don’t pay very much tax, so
there is no incentive to invest. And the result is what you see today; our
infrastructure is falling apart; 80 year old steam pipes are bursting in
Manhattan, factories are sitting idle, while its former workers are flipping
burgers or encouraging people to "have a nice day" for $7 an hour. Taxes are no
longer seen as an investment in the country; they’re seen as punitive, they’re
avoided, and we’re forced to borrow money just to keep things running.
there’s the whole "deregulation" debacle which, combined with this whole
half-assed "free market" concept, demonstrates just how stupid the right is, but
how great they are at selling this snake oil. Folks, people who believe that a
lack of regulation and a completely "free" market leads to economic prosperity
must also believe that the Easter Bunny flies around collecting teeth and
handing kids toys on Yom Kippur; it’s absurd. There is a reason the Founding
Fathers put commerce regulation right there in the Constitution. They put it
there because they knew that capitalism is a brutal business; without
regulation, opportunities dry up. And boy, were they ever on the money! What’s
happened since the government started giving up its regulatory duties is exactly
as the founders predicted. Since the idiots on the right started handing
everything over to the mystical, magical "market forces," you’re seeing
companies gobbling each other up, getting bigger and bigger, and elbowing every
competitor out of the market. Every single "market" is on the verge being
dominated by one company, and individual opportunity has been squelched. Sure,
we get cheap prices on lower quality junk, but we also see a complete lack of
customer service, and absolutely no sense of public interest or civic
we please get off this whole "free market" nonsense? First of all, there is
no such thing. Someone
always runs the market. It’s not "free" just because
government doesn’t regulate it
sufficiently. When Wal-Mart puts a store into a small town and run everyone else
out of business, that’s not a "free market," and to think so is delusional.
What’s happened is, the people of the community have ceded the market to
Wal-Mart, and they run it. When Home Depot or Lowe’s moves into an area, and all
of the hardware stores close within months, that’s not a function of a "free
market;" it’s just the opposite. A "free market" is one in which any
entrepreneur can open up and make or sell his wares. The government’s job is to
protect the actual free market with regulations, not allow businesses to kill
opportunity. You can’t open a business selling widgets, if one or more of the
largest corporations in the world has exclusive contracts on widgets, and
controls the US widget market. That’s not a free market.
in deep trouble, and we’re sealing our own fate by falling for this economic
double-speak. I’m not one to long for the olden days; I like my HDTV and my
laptop. But we have to return to the old economic model; you know, the one that
worked; the one in which we invested in the future, and everyone had an
opportunity to live the American dream. Not only are we not making anything, but
now, the corporations who made their riches off of our sweat for so many years
are increasingly moving offshore to avoid even the low taxes they’re still
required to pay. Pretty soon, we won’t have anything left; no manufacturing, no
corporations. At what point do we start investing in us again? Our economic
infrastructure is already suffering; what will it be like in 20 years? How about
are a lot of warning signs, if you would bother to take your eyes off the latest
LindsayBritney nonsense to look around and see them. They’re not only warning
signs, they’re messages of dark foreboding.
completely dependent on oil, precisely because the oil companies want us to be,
and the government to date has been more than willing to help us. Did you know,
for example, that the first hybrid engine technology was patented in 1917? Did
you know that the first electric cars were created at about the same time? In
both cases, large behemoth corporations bought out the companies, and their
technology, and buried it. That’s what happens when you cede control of the
economy to a few greedy bastards who care more for the bottom line than the
future of the country.
largest industries are all about recycling money. The Federal Reserve prints
more money, and companies vie for the right to siphon as much off as they can,
without getting caught. There are only two solid investments in this country;
the stock market and real estate, and if you’ll notice, they both rarely go up
at the same time. The exception was for the last few years of the Clinton
Administration, when there was a flash of that entrepreneurial spirit once
again, due to the creation of enterprise zones, and other creative investment
ideas. But it didn’t last long; as soon as the right took over again, we went
right back into stupid-land. First, the Enron mess shined a light on just how
crooked the pursuit of money is, especially when money is your only actual
product. So when the Enron mess screwed the economy, and the players in the
stock market were forced to play fair and at least try to be truthful, the same
con men then turned to real estate.
they turned to real estate, they did the same thing they did in the pre-Enron
market. They created mortgages which were little more than financial sleight of
hand, and lo and behold! A whole bunch of people who couldn’t afford to buy a
house before, were suddenly able to buy a house! What a great thing, right?
After all, home ownership is a cornerstone of the American Dream™, right?
yes and no.
hard and making it to the point that you can buy a nice home that you can afford
is actually a good thing, and it is something that people strive for. Habitat
for Humanity helps people do just that; predatory lending practices most
certainly do not. For the last 8-10 years or so, we have been subject to
creative financing that should have sent up red flares. I’m no financial whiz,
but you know, when someone advertises a $400,000 mortgage for $900 a month, or
something like that, huge warning bells should go off in someone’s head. It’s
Enron financing writ large on the housing industry.
what a great time it was, too, huh? Real estate prices just shot through the
roof, and a whole bunch of people made a lot of money because of that fact.
Except that it was all fake. Housing prices didn’t go up based on actual supply
and demand; the houses were paid for by essentially moving money from one pocket
to the other. Houses were being sold and mortgages were being written for people
who couldn’t pay for them. And now, we’re at the precipice of a housing crash
unlike anything we have ever seen, as people who have been carrying these fake
mortgages are hit with the real mortgages that were deferred for a few years.
Meanwhile, the people who came up with these fake mortgages made out like
bandits, quite literally, as they bought and sold homes with real mortgages to
people who could afford them, at the prices that they caused to be overinflated.
Yep, that’s right, folks. A whole lot of people either have lost, or are about
to lose everything, and a whole bunch of other people have been making a lot of
money from it. The current housing crisis is Enron II, and it’s in its beginning
stages; it’s about to get worse.
the story of the right wing approach to economy, folks. Since Nixon took over,
the economic fortunes of this country have tumbled, and it’s time we start
taking stock and taking steps to reversing the trend. An economy that runs on
borrowed money is also living on borrowed time. And an economic model that
stifles creativity and innovation is an economic model that can’t recover when
the inevitable bad times hit. What got us out of the Great Depression was World
War II, but what got us into an unprecedented boom after World War II was an
incredible amount of innovation. It used to be possible to open a small business
on a shoestring, and make a good living; now, almost all of us are dependent on
a job with one of the handful of huge corporations that still do business here.
Entrepreneurship is dead, and because of our massive debt, we are largely a
nation of wage slaves.
time we started demanding economic change. The government needs to get off its
ass and do something about this, because we cannot live on borrowed money
forever, and the money we had is drying up quickly. Large corporations are
running this country, not us, and the politicians who are running things are
largely employees of these companies. Everything is becoming homogenized to the
point that every freeway exit on every Interstate in the entire country is the
same, the stores in every shopping mall in the country are the same, and
innovation is being stifled. We have a lot of problems in this country, not the
least of which is global economic competition unlike any we’ve seen before, and
we must prepare for it, but it’s not possible to prepare for it in an economic
climate that no longer feeds innovation. Most problems need creative solutions,
but the only creativity allowed these days seems to involve ways to squeeze more
money into the bottom line of a large company that already has plenty of money.
of debt, limited income opportunities, legalized bribery and extortion, and a
series of Ponzi schemes. That is what marks our economy nowadays, thanks to
Reagan-Bush-Bush, and the right wing’s obsession with "market forces."
it time the government did its goddamn job?
Copyright 2007 The PCTC Blog