Sunday, December 11, 2011

The Three Words That Define 2012: Jobs, Jobs, Jobs

At the end of the day, in most years, Americans are pragmatists. I say most years because it's not always certain that pragmatists win the day. For example, one definition of a pragmatist is that if something doesn't work, you try something else. A classic example in the last thirty years is trickle down economics, which argues that if you give more money to the rich, they'll create more jobs. Reagan tried trickle down economics in the 1980s. No matter what you think of Reagan, trickle down doesn't work. It never has. But, for some reason, Republicans keep trying it. They try trickle down economics this way, that way and every which way—and it still doesn't work.

Whoever becomes the Republican nominee is virtually guaranteed to try trickle down economics if elected. Cutting taxes and doing cute favors for the wealthiest Americans is more important to Republican politicians and lobbyists in Washington than creating jobs. That is a fact. One only has to look at their record. No doubt business as usual Republicans will put a good spin on it and tell a good story but it'll be trickle down economics. Trickle down sounds a lot better than what Republican economics really is: protecting the wealthiest Americans at all costs, regardless of how much it hurts our country, our democracy and millions of our fellow Americans.

Of course, there have always been four kinds of wealthy people: the kind who really know what they're doing (Jobs, Gates), the kind who inherit wealth (Paris Hilton as well as oil, lumber and tobacco heirs), the kind who are basically crooks in business suits surrounded by lawyers (Michael Milken and Bernie Madoff), or those who sort of stumble into it (Sarah Palin and any number of failed CEOs given golden parachutes of millions of dollars despite a dismal bottom line). Keep in mind that the first kind knows how to make money and doesn't need help creating wealth. And keep in mind that most wealthy people of the other three types usually don't help the economy much.

There's also a special fifth category that achieves wealth initially through the other routes mentioned but that guarantee wealth for themselves and their heirs through any number of devices that can only be defined as protecting privilege. They pay a lot of money to state legislatures and Congress to guarantee their wealth, and year after year the payoffs for their "investments" are lucrative. As just one example, one of the most lucrative scams during the Bush years was very low taxes on stock market, real estate and commodities speculations. Sorry, but speculation, to a large extent, is simply a legal way of skimming billions of dollars from tens of millions of Americans without actually producing healthy economic activity. (There is some need for prices to find their level but the massive gyrations of the markets have become a hindrance rather than a help to the economy. Count me in as one of those who think all such transaction should include a very modest tax).

Does anyone really doubt that Republicans are dominated by the 1%? Does anyone doubt that the 99% (which include tens of millions of ordinary Democrats, Republicans and independents) has legitimate reasons to be concerned about a power structure in this country that leaves so many people behind? Look, there are many responsible people among the 1%. We all know that. As some commentators point out, we're often talking about the .1% and generally those who abuse our economy to enrich themselves in ways that are unhealthy and unsustainable in the long term.

One of the things I personally have disliked over the last twenty years is the idea that many businesses seem to have that I am just a consumer, a human cow to be milked, bled and sometimes skewered. But I'm not a consumer. I'm an American. I'm sure millions of people feel the same way.

I know, I know, "consumer" is a word that sometimes has to be used in economics to explain how things work. I accept that on a certain level. But the politicians, aggressive sales people and the bottom line corporate takeover artists make a huge mistake of forgetting that consumers are Americans. People who lose their homes or jobs because of big biz financial shenanigans are usually decent people who have been treated as if they don't exist. Nothing is more disgusting to me than a corporation that buys a company with a good reputation and bleeds every dime out of that corporation and forgets the consumers, employees and the community and then, to add insult to injury, sells a product no longer worthy of the company's reputation. That is not the kind of capitalism that made America great.

Nick Hanauer is technically a member of the 1% and has written an article suggesting that taxes need to be raised to ensure that consumers, the real job creators, have money to spend:
Since 1980, the share of the nation’s income for fat cats like me in the top 0.1 percent has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent.

(snip)

[But]...there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don’t buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men.

(snip)

If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.

Raising taxes on wealthy Americans is only one step that needs to be taken. Much will have to happen to move our country in the right direction. Americans are unlikely to have that extra $13,000 any time soon. Mistakes have been made. Not enough has been spent on scientific research, one of the key activities that has always stimulated our economy. Not enough has been done to fix bridges, streets, hospitals and schools. Too many jobs have been sent overseas.

In the end, what Americans need are more jobs, not more budget cuts that do nothing more than cut jobs. For two years, Republicans have been complaining about the economy and for two years they have hardly lifted a finger to create jobs. Not in Washington. And not in state capital after state capital. Already, at the election approaches, Republican politicians, Republican pundits and even Republican think tanks are changing their rhetoric to tell Americans what they want to hear. But keep in mind that to date the only thing Republicans have done is cut jobs and ignore the poor and even the middle class. The recession started in early 2007. Where have the Republicans been? At least Democrats have been trying. They would have accomplished a great deal more if not for Republican obstructionists in Washington and in state capitals.

Nick Hanauer is a member of the 1% but not exactly in the sense that has been discussed in recent weeks. The 1% (or .01%) that everybody is talking about are people like Mitt Romney (who's comfortable making $10,000 bets) and Newt Gingrich (who pretends he's not a lobbyist). One was born into the 1% and is making it clearer day by day what his values really are. And the other became wealthy by shilling for the 1% for the last 30 years.

At the end of the day, we need to reelect President Obama and put more Democrats in Washington. But we also need two parties in this country. The Republicans in the GOP leadership need to become pragmatic again.

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