When President Obama was re-elected, he stated that JOBS would be his ‘job’ one. Yet, the moment the celebration ended, he turned back to fencing with the Republicans (though with a much stronger hand, now) over debt and deficit reduction (aka ‘Austerity’). Deficit reduction will NOT create the necessary new jobs, nor will it make the economy healthier, whether with Obama’s mild (relatively speaking) approach, or with the GOP’s vicious austerity measures (rejected in the election and by even 67% of Republicans in the last poll dealing with taxing the rich and reducing or delaying benefits and entitlements from Medicare, Medicaid, and Social Security).
Hasn’t anybody inside the Beltway realized that EVERY attempt to get out of a recession through austerity tactics (specifically attacking the deficit and overall debt) has failed miserably. It not only has driven numerous European economies deeper into joblessness, but has heightened their recessions.
Before FDR (in the pre-Keynsian days), this was tried again and again, producing the various “Panics of …” every 10 years or so in the 19th century, culminating in the Stock Market collapse of 1929 and the Great Depression.
From 1933 through 1980, Keynsian economics, which dictates that, in a recession, you spend stimulus money short-term – even if it means borrowing and raising the deficit – to pull yourself out of recession into a healthy economy, and then attack debt and deficit long-term, from the secure platform of a healthy and functioning economy, worked spectacularly. It was Keynsian economics that turned this country from a third-world country mired in depression into the world’s most powerful economy – and ensured that the rising tide did indeed raise ALL ships, creating our powerful Middle Class, building a secure Working Class, and reducing poverty (halving it from 1961 to 1968).
It has only been since the election of Ronald Reagan and the introduction of his “post-Keynsian” (read: “anti-Keynsian”) economics, derived from the lunatic fringe “Austrian School” theories of Von Mises, Hayak, and, more recently, Murray Rothbard, that the steady improvement of our Keynsian economy began to reverse itself with increasing speed. Until Reagan, if you graphed rising productivity with rising median wages, they both overlaid each other. Since Reagan’s “supply-side,” “trickle-down” voodoo economics, the productivity line has risen even faster, while the median income line has stayed static. Today’s Americans work harder, work longer, are three times as productive as their 1970s predecessors, but, for all that, still get about the same median wage (in real dollars) as their parents did. Meanwhile, over 90% of the increased wealth from this massive increase in productivity was funneled into the already bloated pockets of the corporate elite and their richest investors. This is “supply-side” economics. Capital is venerated and salaried work is sneered at and undermined.
Even if the economic lunatics of the Republican Party have lost their bid to make cruel and massive austerity cuts to our economy (particularly in the social programs they have hated since FDR), they have still won a degree of victory by moving the argument away from whether to use stimulus (which has proven its worth in the real world) versus austerity (which has not worked in any known trial) to an argument about the degree of austerity we will impose – whether severe or relatively mild.
What happened to Obama’s promise that Jobs would be the first thing he tackled in his second term? Why does he continue to surround himself with conservative economists who feed him just a less corrosive version of Paul Ryan and Ron Paul’s dream?
It is ironic that their “role model,” Ayn Rand, signed up for and received both Social Security and Medicare in the 1960s when she was ill and had reached qualification age. Et tu, Ryan.
So, who’s going to give Obama a dose of reality as long as he, like all of our other politicians, advisors, and media pundits live in the castle in the sky that comprises the “Beltway Bubble?”