Monday, August 1, 2011

Real Economic Gloom Trumps Debt Deal Dazzle

President Barack Obama and Congress finally, tortuously, agreed upon a mostly-Republican-pleasing deal to slash trillions in spending over a decade or so and paved the way to raising the nation's self-imposed credit limit, averting an impending first-ever default by the nation and the ensuing catastrophic cascade failure destroying the world's bond markets.

The markets rejoiced, the Dow Jones Industrial Average shot up a hundred points, then reality set in.

The real economic situation continued to be grim. The markets faltered, plunged, then recovered, but with all the major indices down for the day.

The Institute of Supply Management's Manufacturing ISM Report for July posted a disappointing 50.9. Analysts had expected something around 55.

"The PMI (Purchasing Managers Index) registered 50.9 percent, a decrease of 4.4 percentage points, indicating expansion in the manufacturing sector for the 24th consecutive month, although at a slower rate of growth than in June," reported Bradley Holcomb, ISM's chair.

What that meant, along with a tepid 0.8% first half GDP growth and unemployment rising to 9.2% while the economy added a dismal 18,000 jobs in June, was what folks hunkered around barren kitchen tables all across this great land already knew: the real economy, the one with jobs and rent money and college tuition and coals for the hearth, continued to be in pretty bad shape.

And, all the brouhaha over budget-slashing that Republicans said was essential to growing that economy would do nothing to improve the situation. All the brouhaha over preserving and expanding ever greater tax breaks, tax cuts and tax subsidies for the rich that Republicans said was essential to growing the economy would do nothing but make everything much, much worse.

As every economist not working for Rupert Murdoch knows, when the economy is in bad shape, the government becomes the consumer of last resort, providing the stimulus to drag the economy up by its tattered bootstraps.

But, since no one nowadays listens to economists not working for Rupert Murdoch - even ones with shiny Nobel prizes on their mantle - the government hasn't been acting as the consumer of last resort, and the economy remains mired in thick, sucking mud right up to those tattered bootstraps.

The very modest stimulus Obama enacted two years ago, which was mostly tax cuts - not spending - anyway, did keep America and the world from sliding into a medieval abyss, but every economist not working for Rupert Murdoch, many with shiny Nobel prizes on their mantles, knew it wasn't going to be enough. And, it hasn't been.

The nation needs drastic action to dig itself out of the catastrophic Republican-induced economic disaster it finds itself in. The nations needs to enact real jobs programs, on the scale of the works programs Roosevelt enacted to dig the nation out of the Great Depression. The nation needs concerted, massive, and focused investments to create real jobs, and the land is littered with countless opportunities for those investments.

Glaring opportunities for investment and growth lie in clean energy, communication and transportation technologies. Investments in solar, wind, and geothermal energy, and a high-speed rail network could boost the economy and help the nation play catch-up in these 21st century industries the nation is already lagging behind in.

But, Republicans, promoting the interests of 19th century coal and oil magnates, obstruct the nation's every effort for growth.

Instead of raising spending when it is most critical, Republicans force the nation to slash spending. Instead of taxing transnational corporations bloated with offshore profits and using the money to fund the jobs and new industries those corporations refuse to invest in, Republicans force the nation to coddle transnational plutocrats with ever greater tax subsidies funded by transferring money directly out of government services every American needs and into the coffers of their ultra-wealthy cronies.

It's not as though America doesn't need a whole new slew of roads, and bridges, and dams. America needs trillions of dollars in infrastructure, before more bridges tumble into rivers, as did the one Tim Pawlenty deferred maintenance on in Minneapolis, and more gas pipelines explode, as did the one Pacific Gas and Electric Company overlooked maintenance on in California.

It's not as though Hoover Dam was a waste of money. It's not as though the thousands of parks and wilderness retreats created by the Civilian Conservation Corp was a waste of effort. And, it's not as though a new generation of grand projects would be wasted on future generations.

At one time, America was always building for the future, and looking ahead. That was a brand of progressivism that was the truest definition of American Exceptionalism. That was the progressivism that built a transcontinental railway, and launched generations into succeeding frontiers from the American West all the way to space itself.

Today, America has turned its back on building for the future, funnelling all its wealth into the coddling and patronizing of a monied ruling class. At best, American technological advancement moves laterally, as Americans huddle around tiny screens to gossip amongst themselves about inane personalities and foibles.

Today, a nation that once symbolized progress with the monumental achievement of a transcontinental railroad balks at upgrading to high-speed rail. Today, a nation that once launched rockets to the moon needs to catch a lift with the Russians to get a hundred miles from the ground.

Today, to coddle an already ultra-wealthy ruling class, Americans have leveraged a whole future and doomed American Exceptionalism to being a long-forgotten exception to a dismal contemporary rule.

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