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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

America today « Previous | |Next »
July 28, 2011

Columbia University's Jeffrey Sachs has an excellent assessment of the role both political parties are playing in America's decline, along with their competition as to who can be more subservient to Wall Street.

RowsonRdebt.jpg Martin Rowson

It is the background to the current political theatre in Washington over the politics of raising the debt ceiling; a background of economic decline that is not being addressed by the conflicts within the Republican Party and between the House Republicans and the Senate Democrats

Sachs says:

The truth is that we need more federal spending to create good jobs and remain globally competitive, not as some kind of short-term "stimulus" but as a long-term investment in education, job skills, science, technology, energy security, and modern infrastructure. I travel around the world as part of my job, and I can say without doubt that America has failed to modernize the economy and is steadily losing its international competitiveness. No wonder the good jobs are disappearing and the pay is stagnant.

In No end in sight for America's debt heatwave Michael Brissenden, travelling on a train, decribes the appearances of an economy with unemployment still hovering above 9 per cent, house prices in a never-ending slump and foreclosures still rolling up many streets at record speed.
The urban wasteland of the depressed neighbourhoods of Baltimore scroll by. Block after block of crumbling neglect. This is the real Wire. Black neighbourhoods hollowed out by drugs and crime where the unemployment rate is above 50 per cent.... Beyond Baltimore we flash through pretty clapboard towns with their houses all standing in neat manicured rows - American flags flying from the stoops..There are trailer parks and rusting car wreckers yards interspersed between pockets of lush green farmland; gas stations with petrol advertised for $US3.63 a gallon; a second-hand car yard that calls itself Mirage Auto Sales flashes by. The auto repair shops and tire yards are often the only signs of life in the old industrial suburbs of the bigger towns that like to remind us they were once important industrial centres in their own right. A sign on the bridge as we enter Trenton says 'Trenton makes - the world takes'. The old warehouses and factories are smashed up and empty.

This is a picture of a country in economic decline. A country with 9% unemployment, essentially no job growth, widening inequality, falling real wages, and an economy that’s almost dead in the water that is locked in a political battle over how to cut the budget deficit.

Sachs says that Obama's campaign promise to "change Washington" looks like pure bait and switch. There has been no change, but rather more of the same: the Wall-Street-owned Democratic Party as we have come to know it. The idea that the Republicans are for the billionaires and the Democrats are for the common man is quaint but outdated. It's more accurate to say that the Republicans are for Big Oil while the Democrats are for Big Banks.

He adds that:

at every crucial opportunity, Obama has failed to stand up for the poor and middle class. He refused to tax the banks and hedge funds properly on their outlandish profits; he refused to limit in a serious way the bankers' mega-bonuses even when the bonuses were financed by taxpayer bailouts; and he even refused to stand up against extending the Bush tax cuts for the rich last December, though 60 percent of the electorate repeatedly and consistently demanded that the Bush tax cuts at the top should be ended. It's not hard to understand why. Obama and Democratic Party politicians rely on Wall Street and the super-rich for campaign contributions the same way that the Republicans rely on oil and coal. In America today, only the rich have political power.

Obama is on the verge of abandoning the poor and middle class, by agreeing with the plutocrats in Congress to cut spending on Medicaid, Medicare, Social Security, and discretionary civilian spending, while protecting the military and the low tax rates on the rich.

It was only yesterday that one of the pillars of the global economy was that Americans were the consumers of the last resort and the dollar was the safe haven for the planet’s hoarded surplus value. Now the US is facing a future of a bloodbath in the public sector; an abrupt shutoff of unemployment benefits which will negatively multiply through the demand side of the economy; and joblessness reaching double digit figures. It is a future of a great increase in poverty and hardship for the American people.

The politics and theatre is all about re-election for Obama and a Republican takeover of the Senate.They both emphasize budget cuts over growth and investment. As things stand now the US administration

| Posted by Gary Sauer-Thompson at 10:26 AM | | Comments (10)
Comments

Comments

Jeffrey Sachs says that:

Obama could have cut hundreds of billions of dollars in spending that has been wasted on America's disastrous wars in Afghanistan, Iraq, Libya, and Yemen, but here too it's been all bait and switch. Obama is either afraid to stand up to the Pentagon or is part of the same neoconservative outlook as his predecessor.

The real cause hardly matters since the outcome is the same: America is more militarily engaged under Obama than even under Bush

The position of the freshman Tea Party Republicans is that the debt ceiling cannot be raised until a Balanced Budget Amendment to the Constitution is approved by the House and Senate.

The Democrats in the Senate are never going to agree to pass a balanced budget amendment to the Constitution. The Tea Party crowd think that those who point out the the negative consequences of not raising the debt ceiling are lying. They are merely crying wolf about impending disaster.

The calls for sacrifice" and tough love from the political class means other people having to give up their homes, their futures and their jobs in order to satisfy the deity we call "the market."

Gary, and cohort,
Presuming [tut,tut, I know I shouldn't presume] that you are unaware of the thoughts of Bill Mitchell, Prof of Labour Economics at Newcastle, as expressed at his blog I thought I'd give a link to his blog:

http://bilbo.economicoutlook.net/blog/

May I recommend a perma link?

Here is how he opens a recent post on the US debt etc

"I watched the US President speaking live today from the White House. I wish I hadn’t. The local media (here) characterised him as talking tough. What I heard was a leader who doesn’t know what he is talking about. But he isn’t alone out there in the “debt ceiling” debate land. I have noted before that when the crisis really hit I thought it would spell the end of the stranglehold that mainstream macroeconomics had on public policy. That body of theory had led the world into the crisis by endorsing policies that set the financial system up to collapse ......"

Thanks Fred. I was completely unaware of Bill Mitchell's online existence. --I'm just a photographer.

Bill Mitchell's blog has been added under economic blogs

Naturally, the tragic reality of the situation is NOT being properly addressed by the US media.

Instead, the clueless (CNN) and the wicked (News Corporation) keep on feeding the American voters their daily dose of mindless pablum.

As is the case in Australia and all democKracies, we get the governments we deserve.

Perhaps America's solution is another civil war.

The House finally voted on Friday night for a Republican bill to raise the debt ceiling in return for billions of dollars in spending cuts. But the bill is not the needed compromise as the Democratic senators have said they will kill it when it comes to their chamber.

Where to now? The ball is in Senate Majority Leader Harry Reid's court. His first step will probably be to "table" Boehner's bill, thus swiftly consigning it into never-never limbo land. He will then begin the convoluted process of proceeding towards a vote on his own debt ceiling bill.

Whatever emerges from the Senate over the weekend will then go back to the House. It will then be rejected by the Republicans?

As things stand now the US administration is borrowing in order to give tax cuts to the wealthy and pay for at least two wars.

Crazy.

"As things stand now the US administration is borrowing in order to give tax cuts to the wealthy and pay for at least two wars."

Crazy, no doubt. But also entirely predictable.

Bin Laden described one facet of his his strategy: “All that we have to do is to send two mujahideen to the furthest point east to raise a piece of cloth on which is written ‘al Qaeda,’ in order to make generals race there to cause America to suffer human, economic, and political losses.”

The sad thing is that the yanks didn't just stumble into this debacle while trying to counter a REAL danger. No, they went out of their way to exaggerate the threat. The neocon pollie and the MSM hyped into an existential threat, just to get the wars of aggression they really, really wanted.

Not to mention the political clout Bush gained from being a "war" president. Would his inane dribble about "patriotic" tax cuts have been tolerated in a time of peace? Would an electorate not frightened out of their wits by Republican doomsayers and their meeja shock-troops, have paid more attention to the excesses of Wall Street?

America's current political, social and economic mire is the culmination a bunch of (clearly) wrong choices... going back more than three decades.