Because You Never Asked

 

(10/10)

     (This is the first in a 3 part series including the essays “Scary Economic Stuff: England ” and “The Excrement Hits the Fan”.)

     Considering the global trauma caused by the meltdown of the world’s economic system and the socio-political unrest it has unleashed, it is not surprising I’ve devoted quite a bit of work in the last few years to things “economic”. Given the fact that I am no more educated in such things as 99.99% of the rest of humanity, the fact that I’ve actually been able to enunciate such opinions on a subject of such hieroglyphic ambiguity is surprising. Even more surprising, given much of the economic prattle we hear on Big Media, is that much of what I’ve said actually seems to make sense. It is not a question of agreement or disagreement (a very nebulous concept with regard to “economics”) but more that I’ve heard some very qualified “experts” uttering things similar to my own rants. And then there is my good friend ---

     --- who I shall call Bob in these pages. Bob falls into that 00.01 percentile of people who have been trained in this economic prattle. He has studied and taught at such prattle factories as M.I.T. and Cal Berkeley. He is that rare person who is not a layman on things “economic”. He can prattle away with the best of them, something he does brilliantly on a weekly basis in a local publication. I say “brilliantly” not so much for his opinions but for the way in which he makes this stuff understandable for much of the 99.99%.

     Bob is semi-retired and good enough to read some of my stuff. Quite logically, whenever I begin babbling about things “economic”, I turn to him and his expertise in an attempt to measure the reasonable possibilities of my rant. It is gratifying to say that Bob has never found any of my economic babbling unreasonable. There may not be goose stepping synchronization, but he has never said, “no, no, Jerry, that is just rubbish”. On a few occasions he has even complimented me for seeing things in a way he’d never thought about before. In a science as imprecise as “economics”, perhaps the simplification of a layman’s view can untangle the complications the real economists create for themselves (just a thought). I find this to be the case with many foreign policy “experts”, who’ve so complicated the reasons for such things as our wars in the Middle East, they simply cannot see how idiotic they are (just a thought).

     So here we go with some more economic babbling (laymen babble, Bob-like experts prattle). If you think it is garbage, you can blame Bob and the confidence he has given me.

     (Cue Hamlet) “To stimulate or not to stimulate, that was the question” as the global economy fell apart in 2008. In many ways this debate was a fake hand off because there really was no option and those who opposed taxpayer intervention were aware of that. As mentioned in the essay “The Global Economy: I Don’t Get It”, the debt that existed in the private sector was so absurdly greater than its assets, it left no where to turn other than the public sector --- that is, US. Falling into another Great Depression benefited no one and even the “market hawks” who voted against stimulation knew this. Remember, it was a neo-conservative Republican president who initiated the stimulus idea and those who voted against him in his own Party were doing little more than grandstanding with their ideological purity. They knew they had the cover of Democratic support for the idea and could save face without risking anything.

     So --- as the torch was handed to Obama, the question wasn’t to stimulate or not, but rather, how and how much? With regard to the latter, as the process unfolded many economists began to realize it was not enough (Noble laureate Krugman, my good friend Bob, others) as Obama succumbed to political forces more interested in his failure than the well being of the American people. But this was not the Great Mistake.

     The Great Mistake was how it was done.

     Obama’s error was in not intervening enough in the internal machinations of the institutions we the people were rescuing. Without changing either the leadership or the structure of these degenerate financial companies, he simply handed them the money and said go to work. Besides rewarding the same corporate thieves who created this fiasco, he put huge sums of money in the hands of those whose primary allegiance and first responsibility is to their business entities and not the American people. The taxpayers do not need profitable Citi Banks and Goldman-Sachs’s as much as they need a healthy economy that provides a decent living for the most people. As I write, we seem to be getting more of the former than the latter.

     I don’t want to turn this into an Obama bashing event. At least he’s done something and continues to work with the understanding that government intervention and public money will have to play an important role. He’s what we’ve got right now and it could be worse. But he could have done better, even in the current political climate, by doing this:

     Much of Obama’s failure can be linked to his reluctance to be decisive. In a sense, by loaning these failed financial institutions huge sums of taxpayer money, he has “quasi-nationalized” them. The key word here is “quasi”. “Nationalization” is such a radical notion in Yankee rhetoric (propaganda) it scared the President off. He refused to throw high and tight at the problem and his opposition got comfortable in the batter’s box. Instead, he threw slow pitch softball at the problem by allowing these companies to exist as they always had, with the same CEO’s and top executives who’d caused this disaster.

     This was the Great Mistake.

     These people should have been replaced with people responsible to the taxpayers whose primary focus was not to make these failed financial institutions well, but to make the economy well. Private profit for these companies would be secondary to the reasonable risks of lending to small business. Once this kind of lending had stimulated the economy and provided much needed employment, these financial institutions should have been sold back to the private sector. What has happened instead is this: these same companies, led by the same people who led us here; these same companies, led by the same people whose loyalties are to their companies more than to the American taxpayer, are paying back government loans (our money) with profits made from dubious financial games that have done little to help the economic recovery. The government should have bought these people out, not loaned them the money.

     And now we get to the scary part, which is the reason why I’m writing this essay.

     That microscopic trace of power at the very tip of the economic pyramid; that small sampling of humanity that --- well, how to put it? Do they control everything? Is that an exaggeration? While the rest of us trudge off to work everyday just to bring home $600 a week, or to pay the mortgage on an expensive house our good six figure income struggles with, they own or manage sums in the trillions. But, even in the face of such an absurd distribution of wealth, complete dominion is perhaps algebraically impossible. Regardless of the economic power monopolized by the very few, that molten mass of life below must be kept content. It doesn’t take much: a hamburger, a TV, a football game to watch. Only a colossal fuck up could awaken the ire of the Monday Night Football Yokels.

     Spurred on by the greenhouse of greed our economic system is, that degree of colossalness reaped what it sowed in 2008. And the molten mass is justifiably angry. Unfortunately, its understanding of all this is so sub-rudimentary, it does not know where to channel this anger. And guess what?

     With the help of the immense resources still at their disposal, the microscopic few are deflecting that anger away from the financial sector they control and towards their fall guy, the GOVERNMENT. “It’s the government’s fault. They can’t do anything right”. Have you ever heard any Tea Party stooge ranting against J.P. Morgan, UBS, Goldman Sachs and the like? And who funds the Tea Party? A few anonymous billionaires who view the government the same way Al Capone viewed a federal cop.

     And here’s where it gets real scary.

     By doing very little to alter the infrastructure of this degenerate financial hustle; by not replacing its leadership with people working for us not “them”; by giving huge sums of our money to this cabal of financial shysters, Obama has given them the ability to control the pace of recovery. He’s given them the ability to even semi-sabotage recovery if it is in their interest. Although Obama has not come after them like a predator cat on a wildebeest, he is not their man. He is not part of the family. “OK, we screwed up and maybe we’ll be a bit more careful in the future, but we want our guys back in power. We had an ostrich size golden egg and that is where we want to go again. We don’t want anyone telling us what to do. When we can get the family back in power, that’s when we’ll give the Monday Night Football Yokels a dose of recovery, just to show them our ‘ideology’ works (for us, ha,ha). Not too much recovery, just enough to get them back in front of their football games with a 99 cent burger and a can of Bud Light. It’s true, we let it get a little out of hand this time, but we’ll get it under control again, we always have, yadda-yadda ---“

     It’s scary.

     And that brings me to --- (see next essay, “Scary Economic Stuff, England ”)