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

The US: the undeserving poor « Previous | |Next »
October 18, 2011

Over the last decade, the richest 1 percent of Americans reaped vast economic benefits while the remaining 99 percent made do with stagnant incomes, rising costs, and an otherwise sluggish economy. The Great Recession -- which was caused, in part, by the reckless malfeasance of the wealthy -- accelerated and exacerbated these trends, but they were long in the making.

In his New York Times column Paul Krugman says that:

Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens. Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.

America's economy has 14 million unemployed people--its unemployment is at 9 percent. Unemployment is concentrated among the young, the relatively uneducated working class and racial minorities whilst long-term unemployment remains near record highs. The US warehouses a large chunk of what is clearly seen as a surplus population in its prison archipelago.

The finance and allied wealth-holders who see the world through their portfolios have too much power, and despite stagnant growth and high unemployment, they say the really important thing is to reduce fiscal deficits. Once this results in more economic downturn the guardians of fiscal responsibility will throw fiscal rectitude out the window, demand that the governments must borrow to the hilt in order to bail out investors, and once private portfolios are again rebalanced, they will put austerity once more be on the table.

If you are wealthy, a government handout that preserves your wealth is necessary, but to expect the government to treat ordinary people similarly -- to bail them out during tough times and to provide jobs--- is just plain anti-capitalist and a threat to the American way of life. So is spreading the wealth.

The goal of Wall Street's political allies, the Republicans, is to enrich the wealthy at the expense of everyone else. They want tax cuts for the wealthy, and to dismantle the social safety net with draconian cuts to entitlements and other services. Congress has all but turned its back on the unemployed---deficit reduction taken precedence over job creation. Obama's job legislation is timed for maximizing his reelection chances and so the Republicans decide to filibuster and thus kill Obama’s jobs bill.

A weak economy favors Republicans, who can run on the "are you better off than four years ago?" platform. If they win through using fiscal austerity, as a weapon, then they can embrace the mantra that "Reagan proved deficits don't matter" ad cut taxes for the wealthy. It's bad news for the unemployed.

| Posted by Gary Sauer-Thompson at 2:28 PM | | Comments (4)
Comments

Comments

It is not just The Republicans defending Wall Street. Janet Albrechtsen in The Australian attacks the Occupy Wall Street movement as the mosh pit of left-wing incoherence for those wishing to vent and rant about anything that bothers them. When they repeat, in robotic tones, the words of speakers such as Julian Assange and Naomi Klein, they sound like a weird leftist catechism class.

She adds:

the Occupiers have been dubbed "Krugman's Army" in honour of the NYT's resident lefty economist and their biggest cheerleader, Paul Krugman. Krugman offers the occupiers a handy narrative of all that has gone wrong, a play in which bankers feature as the bad, greedy guys in all three acts. There is no mention of customer greed, where just about every American seemed to be borrowing money to buy one, two or more houses well beyond their means.

The danger, says Albrechtsen, is that the Occupiers's grapeshot grievances will be pocketed for political purposes by those wielding power. If that happens, the present global economic pain will only grow worse and last longer.

Albrechtsen doesn't mention the 10% unemployed plus many underemployed, or the highest child mortality in the western world, or a a minimum wage of just $US7.25; huge government subsidies to the banking system (in the form of bailouts) while providing the general populace little benefit; etc

House prices are lower in the US in areas where people below the middle of society live. I would say that if you took a young family starting out in both here and there the US family would pay their first home off sooner.

" Janet Albrechtsen in The Australian attacks the Occupy Wall Street movement as the mosh pit of left-wing incoherence for those wishing to vent and rant about anything that bothers them."

"mosh pit of left-wing incoherence"?

The whole point of the Occupy Wall Street is that the US should increases taxes on the wealthy to pay for programmes that would benefit the other 99% of its citizens, including the half who aren't rich but do pay federal income taxes.

Albrechtsen says that the Tea Party, had a distinct and very clear message, and if you didn't agree with smaller government, lower taxes and fidelity to the US Constitution, then the Tea Party really wasn't for you

What happened to the social conservatism of the Tea Party?