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