Re: I've decided now what I'm rooting for; I'm rooting for economic disaster

On Mon, 01 Aug 2011 10:51:16 -0400, Alan Lichtenstein <arl@xxxxxxxxx>
wrote:

mg wrote:

On Sat, 30 Jul 2011 13:29:04 -0400, Alan Lichtenstein <arl@xxxxxxxxx>
wrote:


mg wrote:

I've reached that decision for a variety of reasons, including the
following:

1. If left unchecked, both the Democrats and Republicans are marching
towards a scenario where they will destroy Social Security and
Medicare as we know it, rather than raise taxes. A mini economic
diseaster might set them on a new trajectory.

2. Both Obama and the Tea Party are undergoing on the job training on
the true nature of the American political system and how it works.
Default should help accelerate their wonderful journey of
enlightenment up the learning curve.

3. Both Obama and the Tea Party are ignoring the will of the America
people. Americans want to preserve Social Security and Medicare in its
current form and fix it by raising taxes. The Democrats and
Republicans have taken raising taxes off the negotiating table.

4. Mainstream Republican supporters, including corporations, Wall
Street, and the Chamber of Commerce, etc, financed Tea Party
candidates. Perhaps a dip back into recession and a big drop in the
stockmarket will cause them to rethink their political donation
strategy.

5. In the worst case, my bet is that the public will react with a
"throw all the bums out" attitude. In the best case, I think the
Republicans will be blamed more than the Democrats. In the case of the
former possibility, that would increase the possibility that Obama has
some competition in the primaries which I favor anyway.

6. Although the consequences are indeed very serious, my guess is that
they have been exaggerated and that Wall Street and the corporations
(especially the banks) will experience the most immediate
consequences. In addition, I believe there's a very good possibility
that Obama will wind up paying the bills anyway, under Article 14 of
the constitution. That would be a good experience for him, I think,
and is one way to help him broaden his political horizons.

While I'm not rooting for economic disaster, we unfortunately will
experience a decline in our standard of living. As you well know, the
wage gap between the wealthy and the middle class and poor has been
increasing for some time. Nobody, particularly the middle class, paid
much attention to it because they were lulled into complacency by easy
credit which financed their standard of living in place of real
productivity in our economy. As you well know, the bubble burst in 2007
when the piggy banks of home equity evaporated with the financial
meltdown. At the same time, business, faced with their own lack of
credit, laid employees whose jobs are never coming back. Consequently,
going forward, the United States will be faced with unemployment
hovering around 10%, which is where it should be in consideration of our
productivity. Our economy, according to the latest GDP figures recently
released is static, and even when it isn't, is a very anemic value.

Problem is, the issue is far too complex for the American Public to
properly evaluate and place blame, which should be placed squarely on
the Republican impetus of promoting free markets. The only thing the
free market did for the American Public is to outsource jobs, and with
it, a standard of living. The problem with free markets is that they're
not really free. So long as there are national boundaries, there can
never be free markets since only capital can freely move over those
boundaries, while labor may not. This creates a quite unfree market.

Since national boundaries are not going away anytime soon, it is
incumbent on the United States to protect its citizenry, the
overwhelming numbers constitute the labor pool. The only way to do that
is to bring back manufacturing from where it was outsourced. And the
only way to do that is to have a trade war. And we should have it now
while we can still win it. The longer we wait, the less likely we will
be to have the upper hand. China, while still holding a considerable
amount of our paper, is in no position to sufficiently raise wages so as
to rapidly transition from an export economy to a consumer economy.
that coupled with a continuing devaluation of the dollar will severely
reduce the value of China's holdings in our debt, which we can repay by
both increasing the taxes on the wealthy( not necessarily corporations )
and the natural positive changes in the business cycle.

Unfortunately, trade wars have historically led to shooting wars, but
I'm betting that this will not occur. But our government should back
away from the notion that somehow, new industries will be created to
increase our GDP. That's not happening anytime soon, and in the
interim, our middle class is being reduced to the status of lower class.


I tend to agree that the "new normal" will probably result in a
permanently high unemployment rate. I believe the unemployment rate
has probably been kept artificially low because of the high-tech boom,
the Bush policy of borrow and spend, the stimulus provided by the
wars, and Bush's ownership Society policy which resulted in the
housing bubble. Now the chickens have come home to roost, permanently
this time, I think. Consumer spending can't stimulate the economy into
a quick recovery because the consumer is deep in debt and he is
afraid. He's afraid he might lose his job, if he hasn't already, and
he's afraid he won't have enough to retire on because everybody keeps
talking about killing Social Security and Medicare.

America has quit growing; the growth has gone to other countries, like
the BRIC countries, for instance. The money from any tax cuts we give
to the rich or to corporations will likely go mostly to those
countries. America is in decline and I don't believe there is any way
to bring it back. Having said that, though, we are still a huge
economic power house that will dominate the world for many decades to
come, but we are in permanent decline.

I think, ideally, what should have happened in the late 70s or early
80s is that we should have made gigantic investments in our
infrastructure and our export-producing companies to make them super
competitve with the rest of the world and we should have played the
role of patsy for countries that put up barriers to our exports while
we welcome theirs with open arms. What actually happened, though, was
that our factories became obsolete while new ones were built off
shore. Even now, our top national priority, as I believe you have
indicated, should be exports, but I'm not sure what the best way to do
that is, and I do have to wonder if it's too late, especially give the
political realities in Washington.

We agree on most points. I agree, for the most part, that what we
should have done in the 70's and 80's was to insure our competitiveness
going forward, which we didn't do, courtesy of Ronald Regean and his
voodoo economics, which only promoted outsourcing, which began in
earnest under him. But we can't cry over spilled milk, and placing
blame at the Republicans' doorstep, where it belongs, isn't going to do
anything for us going forward.

The only way to do this is to make it unprofitable for America to import
goods, and that means to manufacture them HERE. We can do that either
by reducing wages and benefits to the level of those third world
countries, or by having a trade war. I reject the former option, as
reducing our standard of living while permitting China's to continually
rise, will, in the long run, hurt us. IMHO, the best way to to have a
trade war, and have it now, when we can prevent China from increasing
its standard of living and consequently, its wage base, and remove all
the investment in China and return it to our shores. In short, China
simply cannot abruptly shift from an export economy to a consumer
economy on short notice, thus allowing us to win the trade war. If
China wants to become an economic powerhouse, they need to do it by
their own bootstraps, and that means from their own investments, not ours.

I confess I've given up on the possibility that there are any
solutions to America's inevitable decline. Therefore I haven't really
given much thought to how we could reverse the situation. From my
knee-jerk point of view someone might say I am too far on the right
because I don't believe a trade war would work. On the other hand,
someone might accuse me of being a communist because I think one good
idea might be too tax the hell out of the corporations and provide
loans to the employees to buy them. Or simply have the government take
them over.

.

Relevant Pages

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  • Re: Ive decided now what Im rooting for; Im rooting for economic disaster
    ... Republicans have taken raising taxes off the negotiating table. ... Mainstream Republican supporters, including corporations, Wall ... Our economy, according to the latest GDP figures recently ... only way to do that is to have a trade war. ...
    (soc.retirement)
  • Re: Ive decided now what Im rooting for; Im rooting for economic disaster
    ... Republicans have taken raising taxes off the negotiating table. ... Nobody, particularly the middle class, paid much attention to it because they were lulled into complacency by easy credit which financed their standard of living in place of real productivity in our economy. ... China, while still holding a considerable amount of our paper, is in no position to sufficiently raise wages so as to rapidly transition from an export economy to a consumer economy. ... We can do that either by reducing wages and benefits to the level of those third world countries, or by having a trade war. ...
    (soc.retirement)
  • Re: Ive decided now what Im rooting for; Im rooting for economic disaster
    ... Both Obama and the Tea Party are ignoring the will of the America ... Republicans have taken raising taxes off the negotiating table. ... Our economy, according to the latest GDP figures recently ... only way to do that is to have a trade war. ...
    (soc.retirement)
  • Re: Ive decided now what Im rooting for; Im rooting for economic disaster
    ... Both Obama and the Tea Party are ignoring the will of the America ... Republicans have taken raising taxes off the negotiating table. ... Our economy, according to the latest GDP figures recently ... only way to do that is to have a trade war. ...
    (soc.retirement)