Wednesday, December 7, 2011

Is Obama Correct About Repuke Policies Destroying the Middle Class?

In Osawatommie, KS yesterday Barack Obama gave a speech commemorating Teddy Roosevelt's "New Nationalism" speech at the same venue nearly a century ago. This time, Obama emphasized the degree to which the Middle Class of this country is at risk, and that Republican economic policies which grant the largest piece of the pie to the richest are behind it.

Is Obama correct? Let's examine the proposition.

It is no secret the Middle Class is falling under the bus, and things promise to get much worse before they get better. At the root is the continuing home crisis, a result of more homes being foreclosed, and more homes sitting on the market (except for the stratospheric top housing market of the ├╝ber-wealthy where they can't keep up with demand, e.g. selling $4 million high rise apts. in the Big Apple).

Then there is the credit freeze overall and the difficulty of getting any kind of loan without a credit score of at least 780. Finally, there is the issue of jobs, and despite the 8.6% putative unemployment rate for last month, let's not forget two things here: 1) the percentage of job seekers who simply gave up, which would naturally drop the rate since they're no longer on the rolls, and 2) the almost unchanging % of the under-employed, those who want full time work and can't get it. I could also add that the jobs created still remain under the population replacement level of 180,000/month, but why rub it in?

All this adds up to a terribly low aggregate demand environment. Because of the fiscal and lending instability as well as high unemployment rate, people can't spend, and businesses won't spend to create jobs because they aren't sure where people will get the money to buy their services or wares.

This leaves only government as the spender of last resort. Without at least one leg of the spending tripod active, we are all down the shithole next year. THIS was the point Obama was making, but in much more flowery parlance.

Now, Obama offered a way out months ago, with his $447b jobs bill which would or could have put at least 1 million to work, including on infrastructure projects. But the Repuke House nixed it. These bastards will not allow anything on the books that can't "pay for itself", never mind the fuckers were quite happy to pass on ten years and more of Bush tax cuts without paying for them!

Thus, repukes ARE responsible, in the sense they are icing the spender of last resort. And because of this unwillingness, we are now on the the cusp of seeing a massive retrenchment in government employees and services and hence much less aggregate demand because government workers too have paychecks and hence contribute to an active economy. This despite the widespread GOP canard that "government doesn't create jobs". Well tell that to the 35,000 odd postal workers who will lose their jobs in the coming months! Then tell it to all of the citizens in those hundreds of hamlets and towns who will be the worse for the lack of postal service!

Now, the repukes argue that they won't allow more spending, but will allow more tax cuts - only the tax cuts they want that benefit their mythical "job creators". According to Repuke lore, the wealthiest if given enough tax cuts will create the jobs to put Americans back to work. This is total unadulterated horse pockey.

In fact, the last thing the wealthy do with more tax cuts is to create jobs. Their incentive instead is to invest in more overseas funds, including hedge funds, as well as speculate in commodities (which often drives up the price of oil and rare minerals) and purchase loads of luxuries, including 100kt blood diamonds, Mint Bentleys, and yachts.

Meanwhile, a true business will create jobs not if its taxes go high or low, but provided their potential customers have the money to spend on what they will be selling. If they don't see the potential for spending, they won't create jobs, it's as simple as that!

The sad thing about the Repukes is that they're so obsessed with getting Obama out of office, they will do it at any cost - even destroying this country, at least for the Middle class and of course, it's already mostly a shambles for the working class. Each day that passes when the repukes and their stooges in the House don't allow new spending for citizens' needs (including for enough air traffic controllers, and food inspection agents) is another nail in this country's collective coffin.

Contrary to the Wall Street Journal's endless cheerleading pose when there's no evidence for it (and in another blog I will show once more why stocks are a bad idea) Obama did the right thing by telling it like it is and hopefully rousing Americans from any Pollyannish stupor they might be victims of.

We don't have the time to engage in ridiculous illusions, it's time to face reality. The harsh reality is that Republicans would rather destroy this nation than see Obama get elected again!

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