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domingo, julio 24, 2011

Buddy Can You Spare A Dime?

I thought I had sworn off writing fulminating about politics and economics, and, in particular, what I see as Republican ploys to transfer even more wealth to America’s richest people from those who can least afford to give it up. Instead, I find myself again pointing out that we’re being fleeced. Yet again. We’re being plundered. We need to be creating jobs. Instead, we’re talking about balancing budgets and redistributing wealth to rich people who are doing very, very well, thank you, from people who can ill afford cuts. This is disgraceful. And maddening.

The Republican insistence that taxes cannot be increased on the richest people and/or on corporations means that only spending will be decreased. Not on wars. Not on corporate welfare. Not on the many other boondoggles Washington so loves (Ethanol anyone? Petroleum subsidies?). That, they say, would be unthinkable. They’re talking instead about cutting the already miserable, frayed, inadequate social net. The one that doesn’t have Universal Health Care. The one that doesn’t have long term unemployment benefits. The one that provides for Social Security, Medicare, Medicaid. The one that provides food support for families. And funds for children. Where does this end up? It ends up eventually in death: if you cannot pay for your own necessities, health care, food, heating, or housing, you die.

The context for this plundering of the poorest people is vital. Income inequality is now where it was in 1910. All of the gains of the past century have been wiped out. America’s income distribution looks like Paraguay’s. And now the Republicans want to distribute the remaining 10% of wealth (held by 90% of the population) to the 10% who already have 90% of the wealth. And the principled, stated reasons for this? All eyewash. The wealthy have the best government their money can buy, and their Astroturf T-party minions in Washington are going to keep their promises.

As if that weren’t enough, the Republicans continue to insist and the media repeat as if it were credible, that tax cuts will lead to a resurgence of employment, and that increases in taxes will lead to more unemployment.

Hah. What a joke. All the Bush tax cuts have brought the US are hoarding by the richest and interminable structural unemployment. AP reports that corporations are hoarding almost two trillion dollars and they have no intention of using those funds to hire:

Strong second-quarter earnings from McDonald's, General Electric and Caterpillar on Friday are just the latest proof that booming profits have allowed Corporate America to leave the Great Recession far behind.

But millions of ordinary Americans are stranded in a labor market that looks like it's still in recession. Unemployment is stuck at 9.2 percent, two years into what economists call a recovery. Job growth has been slow and wages stagnant.

"I've never seen labor markets this weak in 35 years of research," says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University.

Right. Forgive, if you can, that “looks like” about the labor market still being in depression recession. The unemployed know quite well that their misery continues and that their benefits are gone or shortly expiring. They know too well that there has been no jobs recovery. The unemployed are still living the employment recession and suffering.

And why is there a disconnect between the reported, strong corporate profits and employment? It’s eye popping:

U.S. corporations are expanding overseas, not so much at home. … U.S.-based multinational companies have been focused overseas for years: In the 2000s, they added 2.4 million jobs in foreign countries and cut 2.9 million jobs in the United States, according to the Commerce Department.

Back in the U.S., companies are squeezing more productivity out of staffs thinned out by layoffs during Great Recession. They don't need to hire. And they don't need to be generous with pay raises; they know their employees have nowhere else to go.

Companies remain reluctant to spend the $1.9 trillion in cash they've accumulated, especially in the United States….

It’s not a secret. Corporations aren’t hiring. And won’t. And giving them more tax cuts to spur them to hire is actually just giving them more funds to hoard. Or to build plants overseas. Or distribute as profits to their shareholders.

You want jobs? You need a stimulus program. A big one. You need more deficit spending. And you need to build infrastructure. Nothing else is going to work. And none of this has anything to do with balancing the budget. The state governments’ attempts to balance their budgets by cutting has only increased unemployment. And stagnation. Cutting jobs is antithetical to job creation. Tax decreases to people who will not hire are antithetical to job creation. Only Government spending will spur growth and hiring. Are Democrats talking about a new stimulus program and the need for new jobs? Crickets.

What’s the debt ceiling got to do with this? Everything and nothing. It’s just the latest hostage in the Republicans’ relentless redistribution of income (and wealth) from me and you to the richest, who hired elected them to carry out this piracy. And amazingly, yet again, the Republicans’ threat to destroy things, this time the Full Faith and Credit of the United States, seems to be working. There won’t be a default. No. That would hurt the wealthy’s investments. It would mess up the stock markets. Hurting them would be unthinkable. What there will be instead, as usual, is an even further rending of the already threadbare safety net. And it will be yet another Victory for those who least need one. The victory might even be gift wrapped as Bipartisanship.

I am pessimistic. If there is anything good happening in Washington at the moment, I have no idea what it might be. I’m afraid that we’re getting ready to witness yet another Republican rip off. And I’m afraid that there is no proposal that addresses the US’s urgent need for job creation.

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