Old Rich White Men

The Financial Crisis

Dogs

So it’s 3 o’clock in the morning and I and driven to my PC because a dog is barking somewhere in the subdivision. It is 25 degrees outside and some thoughtless neighbor of mine—just as, I am quite sure, some thoughtless neighbor of yours routinely does—has left their dog out in the yard all night look, shivering and woofing his head off. Every night I tell myself I’m going to get in my car and roam the streets until I find this dog and then I’m going to call the Humane Society or the sheriff or both. It is, first and foremost, cruel to abandon your dog. Most cities, whether you realize it or not, prohibit leaving your animal unattended for longer than five hours at a time. Every city had noise ordinances that prohibit this kind of racket all night long. My anger, however, is not directed toward the lousy dog owner but the neighbors. Why do I have to get up and drive around looking for this animal? How can his next-door neighbors not hear that racket? Why won’t they do something about it? Presumably, they have a relationship with the barker—they even have his phone number. But they do nothing, say nothing. Virtually every single night, I am awakened by this dog who is, presumably, blocks away. But the people right next door say nothing, do nothing. How these people can just pull a pillow over their head and do nothing while this animal disturbs the entire subdivision is beyond me. But this is what they do.

Much like war in Afghanistan, which 95% of America can all but ignore while 5% of America does the fighting over there, America’s dire financial situation is the dog barking its head off at two in the morning. I don’t understand why this entire block isn’t out in front of this idiot’s house, in bathrobes and slippers, demanding they shut that dog up. What I’ve discovered, however, is, for the most part, we’re all a bunch of cowards. Most people here will do nothing, say nothing. They’ll wait for me to do or say something. If I am successful, they will not thank me. If I am rebuffed or even threatened, they will side with the bully. This is textbook cowardice: refusing to stand up for what’s right and then taking the side of the offender.

Sixteen trillion dollars is an incomprehensible number. It is a debt so big, none of us will be able to pay it off in our lifetimes or even our children’s lifetimes. In fact, it may never be paid off. Math is a real turn-off, and I’d guess a lot of people just switch over to sitcoms and reality TV rather than to embrace the horror of the national debt in any perceptible way. The childishness of consumer politics tends to polarize our thinking and block our ears when we delve into the numbers because, the moment I say President George Bush, half of you stop listening. But, this is not political, and I am not trying to bash former President Bush. I’m trying to explain, first to myself, what the debt is and why we should care about that dog barking somewhere in the distance.

Under President Bill Clinton, the national debt rose from about three trillion to five and one-half trillion dollars. Under President George W. Bush, the national debt doubled from five and one-half trillion to eleven trillion dollars. Under President Barack Obama, the national debt has risen to an estimated sixteen trillion dollars and is projected to hit twenty trillion by the time he leaves office in 2016.

I believe the only reason numbers like these don’t scare the living daylights out of us is that they surpass our ability to comprehend them and, therefore, venture into the abstract. Without politicizing it, George W. Bush has been noted, by leading political and economic scholars, as the worst president in the history of the United States [LINK]. The catastrophic effects of Bush’s policies, not only on our economy but on our very existence as a republic, are still be tallied. It is not rhetoric to imply our nation may not survive his presidency. Throughout The Bush Years many people, myself included [LINK] railed against his catastrophically wrongheaded choices that cost literally hundreds of thousands of lives and destroyed the global image of the United State of America. This nation, whatever it may be, is no longer the same country it was when Bush was sworn in. Denying that fact, apologizing for Bush, putting political spin on what was a gross national failure of still-unknown consequences is simply evil. Not only the Republicans who gave Bush blank check after blank check.

Lie To The Tower

There's this scary business going on in Flight, the new Denzel movie where Washington is an airline pilot caught in choppy weather who decides to execute some unorthodox maneuvering to dive to clearer skies. The plane is shaking itself apart and the passengers are frightened, and, when asked about what he’s doing, Denzel instructs his co-pilot to lie to the tower, to tell the tower they are climbing when they are in fact descending. This scene rightly sums up The Bush Legacy. The administration’s economic policy was to literally hide the costs of the war in Afghanistan and Bush’s vanity exercise in Iraq by accounting for those wars separately— “off the books”—which kept the fiscal reporting relatively sane, if not great. Bush never included the war costs in the budget reporting, which gave a rosier picture of America’s fiscal health. Then he slashed tax rates for millionaires and corporate interests—which is a lot like cutting the fuel lines on a commercial airline jet. Then he lied to the tower—the American people. We’re climbing, when in actually, we were descending.

People who attack or deny this truth about the Bush economic policy are simply in denial. Proof of this was the U.S. economic collapse of 2008 which led us to the door of a second Great Depression. Statisticians avoid calling this, literally, a “Depression,” because our economic collapse has not met certain statistical standards and because the word “Depression” would cause widespread global panic. You see someone vomit, you tend to vomit. Ixnay on the Epressionday. But the reality on the ground is this is not so much an extreme recession as it is a mild depression. Bush’s successor, President Barack Obama, has exhausted himself rounding the corners and blunting the edges of this thing to avoid panic. The wisdom of this approach is indeed debatable. The average man on the street is terribly uninformed, which falls short of calling him stupid. The average American simply watches too much TV. This makes us easily brainwashed. Math is boring, The Real Housewives is exciting. Obama’s biggest failing has been in his terrible messaging. On some level, I assume he doesn’t want to talk down to us. But Obama lives inside this academic snow globe with his college-educated wife and all of those smart white folks. I don't know that the president even watches much TV beyond sports. He needs to explain things to the American people in precisely the same way he explains them to Sasha, his youngest daughter. I’m quite sure Sasha is a bright child and can likely process things better than I can, having grown up among eggheads. So the president is likely not talking down to her so much as he is simplifying complex ideas and expressions into something she can work with. This is what he’s failed to do for the American people.

The dog is out there barking. We’re doing nothing about it. My question is, are we actually sleeping through the noise or have we just learned, somehow, to tune it out? Individually, there’s not much even the most successful among us can do about the $16 trillion debt. The president needs to keep the wheels of the economy turning. They are turning slower because so many of us are broke. We’re not buying things. Even worse, over the course of this terrible recession, we’ve learned we don’t need so much junk in our lives. Necessity has matured America. We’ve learned we don’t need a new car every two years. We don’t need the latest gadget. We’ve grown more patient, waiting for sales instead of heading out.

Slashing taxes, ending regulation, starting wars: The Bush Legacy.

The New America

George Bush has changed America. There simply is no denying that. Obama’s political rhetoric notwithstanding, we will never again be the America of Bill Clinton. That’s over. The kind of consumerism that drove the American economy under Clinton has been destroyed by George Bush’s hiding so much debt in the closet. This is debt Obama pulled out of the closet and put back into the nation’s budget reporting when he took office, presenting the American people with (relatively) uncooked books for the first time since Clinton. And those numbers were staggering. The Republican Party, in its greed and evil—yes evil—has made enormous effort to pin those numbers on President Obama. They have been successful in convincing only those least engaged among us, the sadly ignorant folk who see only the president’s skin color. It is an irrational assertion that the 2009 numbers had anything whatsoever to do with Barack Obama. The assertion, throughout the mean-spirited, racist 2021 campaign is that Obama doubled the deficit. This is provably not true, but the people who want to believe Obama is the devil are never going to look up the numbers—which they can do in a .35 second Google search. The deficit was $11 Trillion when Obama came into office, it is $16 Trillion now.

Republicans also politicize government spending as evil, rallying their low-information faithful to spit at the president for all that spending. They conjure up images of black faces getting a free rise on welfare, missing the point that the majority of welfare recipients are white. Additionally, welfare, in the national budget, includes “Unemployment / Welfare / Other Mandatory Spending.” One of the main factors in this budget item doubling is President Obama’s repeated efforts to extend unemployment benefits to the very people howling epitaphs at him. The logic of extending unemployment benefits is to blunt the actual impact of this economy. As bad as their lives may be, most of the Obama detractors have, in fact, greatly benefitted from his policies, which kept millions of American families from hitting rock-bottom. Most will not feel this emotionally, but in the Great Depression utility companies shut off power in mid-winter, people lived on the streets, stood in bread lines. Call the president all the names you want, but every American citizen has, in measures great and small, been spared the grimmer reality of this economic climate which is wholly an invention of George W. Bush, whom many of these terribly ignorant people defend and clamor for.

The president is simply not allowed to stand up and say how bad the economy actually is (or was). Even now, staring this so-called “fiscal cliff” in the face, the president cannot paint a realistic picture of how dire America’s circumstances are without causing those circumstances to come into existence by virtue of Joe Lunchbucket panicking. The president has to inspire confidence and hope while also managing to strike a deal with unscrupulous and, yes, evil Republicans (not rhetoric: these people are evil) who know, full well, what’s at stake and will nonetheless play politics with the very existence of our nation in an effort to score political points. These are constituents too stupid, too racist or too cowardly to tell their Congressional representatives to stop threatening the future of this nation for political gain. This is the dog barking. It is tragic and sad that ignorance is so prevalent in this country that fully half the nation is easily bamboozled by, yes, evil politicians who know how stupid their supporters are, what truly motivates them. and whose actuarials weigh the stupidity of their constituencies against the best interests of the nation.

And this is the mess we are in. Old Rich White Men playing politics, posturing while running out the clock on America’s future. The president, restrained from saying things like, “We were far beyond any concept of a recession. This was a Second Great Depression.” It took Theodore Roosevelt nearly eleven years and a world war to repair the damage done by Herbert Hoover, whose fiscal policies mirrored Bush (and Romney)’s. Most people don’t know that. The Great Depression is something we slept through in Social Studies. Explaining the whys and wherefores of that era and how this one grimly mirrors it to, say, Sasha Obama, is a daunting task, one the president had failed spectacularly to do. Most Americans simply do not feel the actual dread of America’s financial state. This is why we’re so comfortable channel surfing while these morons play games with America’s very existence. Make no mistake about it: this is what we’re talking about, here.

But the president cannot paint an accurate picture without starting a possibly unrecoverable panic. Republicans know this, which gives them the platform to posture and hold their breath and pander to the most sadly ignorant among us. The president sugar coats, the Republicans posture and get away with it.

Calling Them Out: The president, November 12th 2012.

Repeating History

We don’t actually have to go over the cliff. Just the threat of our going over the cliff—the optic of spoiled, rich America paralyzed by gridlock—is enough to collapse world markets. Ma and Pa Average American has this notion of a ticking clock and a deadline looming around New Year’s Day, but the damage—some of it irreparable—is being done right now. Despite all of the ignorant pandering and yelling, the fact is Republicans, not the president, are responsible for the unprecedented reduction of America’s credit rating. The president had the pen in hand, ready to sign what has been a routine raising of the debt ceiling—something these very same evil Republicans have done several times for President George Bush and something that usually escapes our notice as simple paperwork. Whatever the nuances of deal making, at the end of the day it wasn’t President Obama who played politics with the debt ceiling. It was the Republicans. America’s credit rating got dinged not because Washington did not raise the debt ceiling but as a response to the childish brinksmanship surrounding that routine process. America is no longer as creditworthy not because we lack money but because we lack will to elect mature and responsible individuals. It’s all clown school now, and I do not excuse progressive clowns like the always-scheming, always-politically-maneuvering Nancy Pelosi, either. Like an increasing number of Americans, I find myself disgusted by all of them—the leaders I like, the leaders I don’t. However, rational, thinking Americans are vastly outnumbered by the Low Information Ignorant Tribalists who fail to educate themselves in any balanced way but exist instead within the echo chamber of Fox News if they watch any news at all. Lord knows these people don’t read. They are motivated by demonstrations of rage rather than reason and logic. I’m Mad As Hell. Their rage compensates for their fear, not of a Black President or a Brown America, but of what is emerging as the future of America: a place where their tribal identity is no longer the baseline standard. These are the ignorant folks relying on their guns and religion, as the president aptly expressed, and they send ignorant, selfish, evil people—who secretly despise the very people who vote for them—to make decisions in Washington.

America is not in dire shape because the president is black or the president is stupid or, for that matter, much of anything the president has done or is doing. America is in dire shape because the dog is barking. We all hear it. Nobody wants to get up..

Christopher J. Priest
18 November 2012
editor@praisenet.org
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The Fiscal Cliff

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In the United States, the fiscal cliff is a newly coined term (neologism) referring to the effect of a number of laws which, if unchanged, could result in tax increases, spending cuts, and a corresponding reduction in the budget deficit beginning in 2013.[1] These laws include tax increases due to the expiration of the so-called Bush tax cuts and spending cuts under the Budget Control Act of 2011.

The year-over-year changes for fiscal years 2012–2013 include a 19.63% increase in tax revenue and 0.25% reduction in spending.[2]

Some major domestic programs, like Social Security, federal pensions and veterans' benefits, are exempted from the spending cuts. Spending for federal agencies and cabinet departments would be reduced through broad, shallow cuts (referred to as budget sequestration).

The Congressional Budget Office reported an increased risk of recession during 2013 if the deficit is reduced suddenly, while indicating that lower deficits and debt over time improve long-term economic growth prospects. The deficit for 2013 is projected to be reduced by roughly half, with the cumulative deficit over the next ten years to be lowered by as much as $7.1 trillion or about 70%.

The Budget Control Act of 2011 was passed under the political environment of a partisan stalemate, in which Democrats and Republicans could not agree on how to reduce the deficit. It was thought that the blunt cuts of budget sequestration and sharp revenue increases would be mutually undesirable to both parties and provide an impetus and deadline to bring the sides together to solve the deficit problem.

The projected effects of these changes have led to calls both inside and outside of Congress to extend some or all of the tax cuts, and to replace the across-the-board reductions with more targeted cutbacks. It has been speculated that any change is unlikely to come until the period roughly between the 2012 federal elections and the end of the year. Additionally, the debate may be exacerbated by the expectation that the debt ceiling is expected to be reached before the end of 2012,[note 1] unless "extraordinary measures" are used.[3]

Nearly all proposals to avoid the fiscal cliff involve extending certain parts of the 2010 Tax Relief Act or changing the 2011 Budget Control Act or both, thus making the deficit larger by reducing taxes and/or increasing spending.

Prolonging
The Great Recession

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by Paul Krugman/NY TIMES

This week, the Federal Reserve Bank of New York published a blog post about the "mistake of 1937," the premature fiscal and monetary pullback that aborted an ongoing economic recovery and prolonged the Great Depression. As Gauti Eggertsson, the post's author (with whom I have done research) points out, economic conditions today – with output growing, some prices rising, but unemployment still very high – bear a strong resemblance to those in 1936-37. So are modern policymakers going to make the same mistake?

Eggertsson says no, that economists now know better. But I disagree. In fact, in important ways we have already repeated the mistake of 1937. Call it the mistake of 2010: a "pivot" away from jobs to other concerns, whose wrongheadedness has been highlighted by recent economic data.

To be sure, things could be worse – and there's a strong chance that they will, indeed, get worse.

Back when the original 2009 economic stimulus package was enacted, some of us warned that it was both too small and too short-lived. In particular, the effects of the stimulus would start fading out in 2010 – and given the fact that financial crises are usually followed by prolonged slumps, it was unlikely that the economy would have a vigorous self-sustaining recovery under way by then.

By the beginning of 2010, it was already obvious that these concerns had been justified. Yet somehow an overwhelming consensus emerged among policymakers and pundits that nothing more should be done to create jobs, that, on the contrary, there should be a turn toward fiscal austerity.
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The Great Depression

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The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s.[] It was the longest, most widespread, and deepest depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline.[] The depression originated in the U.S., starting with the fall in stock prices that began around September 4, 1929 and became worldwide news with the stock market crash of October 29, 1929 (known as Black Tuesday). From there, it quickly spread to almost every country in the world.

The Great Depression had devastating effects in virtually every country, rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%.[] Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most.[]

Some economies started to recover by the mid-1930s. However, in many countries the negative effects of the Great Depression lasted until the start of World War II.[]

The common view among mainstream economists is that Roosevelt's New Deal policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession. Some economists have also called attention to the positive effects from expectations of reflation and rising nominal interest rates that Roosevelt's words and actions portended.[][] However, opposition from the new Conservative Coalition caused a rollback of the New Deal policies in early 1937, which caused a setback in the recovery.

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