Could the news get any worse? America is reeling as it learns just how rotten its economic foundations have become. A new report revises our 2007-2009 recession to have been much worse than we previously believed. In addition, it turns out our growth after said recession was much less than we previously believed. GDP growth has not yet gotten us back to where we were before the recession. Worse, this doesn't take into account population growth, which means per capita GDP is even lower. We're still taking in an additional million people a year, or more, into a country that hasn't produced any new jobs since 2000. This month as well, new job numbers have been a depressing pittance, not enough to match population growth in the working sector. IE, labor force participation will be going down again this month, like it has been for a decade.
Economic indicators, like manufacturing orders, are all down, which shows that the future of the economy is just as bleak as the present. Responding to all this bad news, the stock market has plunged, taking with it even more savings. America has already lost around 30% of its net worth since the 2007 recession began, with those hardest hit being the poor and unemployed, who have no way to restore their wealth now that it's gone. If the stock market plunges, that means businesses will have less economic leverage to invest and hire new workers -- which means we're back full circle to our Great Depression 20% unemployment rate which will never change and is only worsening every month. Even though the economy is in a slump, oil prices are rising instead of falling, putting yet one more backbreaking load on the economy.
It feels like a malaise has settled like a thick fog over the entire country. There isn't any good news anywhere. And our politicians in Washington D.C. just spent three months negotiating what should have been a routine two-hour vote to raise the debt limit, in return for what? What did all the bickering result in? Imaginary savings over the course of 10 years that Congress probably won't even enact when the time comes, that are so small they'll have absolutely zero impact on the national debt or our out of control deficits even if they are enacted. This is the perfect picture of a dysfunctional government. We spent three months deadlocked over a bill that ultimately did nothing at all. At a time requiring swift government action, if the government ever intends to do anything, now is the time, we spent three months bickering in order to produce a bill that makes no meaningful changes to taxes or spending whatsoever.
The money is there. The rich have plenty of money. In fact, they are raking in record profits. They are also the largest percentage of total wealth and total income in America in a century, while paying the lowest taxes in maybe 50 years on said wealth and income. The entire crisis could be solved overnight by a government willing to take action -- we simply need to take money from the rich and give it to the poor. We could do this very easily. Just default on the national debt, all 14 trillion dollars of it. Our creditors are generally rich people who don't need the money anyway, certainly not at a time of universal crisis. Just to keep things in perspective, the poor (blacks and hispanics) have lost 50% and 66% of their total savings over the last three years. They are also massively unemployed, living god knows how with no hope of being hired because there are 5 people who need a job for every job opening in America (and millions of immigrants who continue to stream in and compete for these jobs Every Year.) The poor have lost everything, they've been wiped out by this recession. Meanwhile the rich are richer than ever, sitting like fat cats on top of the blood money of a dying nation. They have not been asked to sacrifice anything. It's like World War I all over again. The poor go to die in the trenches so that the arms merchants and banks can make billions in the back lines. Taxes haven't been raised on the rich since the Recession began, they've been cut. Instead of bailouts going to the poor and unemployed, they were directed to rich bankers, who, in turn, awarded themselves multimillion dollar bonuses for their great job at destroying the US economy.
It's an inverted world. The inversion must be inverted. From here on, we need the rich to suffer and the poor to benefit. This recession has been the most caste-oppressive I've ever seen. This is probably the most differentiated society America has ever lived in. We need to move things back to the historical center, where there wasn't much difference between the rich and the poor, and everyone could get by. This isn't a fantasy world, it was the norm throughout all of American history -- farmers who owned their own soil, autoworkers who had great wages and job security, or gold rushers and wildcatters who could make it big with a bit of risk taking and can-do spirit. Today is the fantasy. Today is the impossible extremist position -- that most of the country should have zero savings, be unemployed, with a joke of a health care policy that requires they buy their own health insurance as their only 'safety net.' This while the rich live in the extremist fantasy world of getting record profits while paying next to nothing in taxes, the lowest tax rate in over 50 years. This while the rich have created a natural monopoly by shutting off all upward mobility, simply by raising the price of college to unendurable for the middle class. How many 100's of thousands of dollars does it take to get through Harvard or Yale? How easy is it to become rich in this country without a degree from a prestigious college and subsequent graduate school? Add these two together and you realize that far from a meritocracy, the rich have simply bought themselves a monopoly for all of the best positions and jobs in America. I've never seen a more stratified America, which was founded on the hatred of stratification and love of the self-made man.
Poll after poll has shown that Americans don't want additional immigrants coming here and competing with them for their precious jobs. The rich want more immigrant labor because it depresses wages and raises profits -- the rich pay all the campaign donations that get politicians in office -- and so the rich get their way despite the polls. The polls say they would rather give money to people losing their houses and jobs than bankers losing their bonuses, but the rich pay all the campaign donations that get politicians in office -- and so the rich get the bailouts and the poor are left to sink or swim. Poll after poll has shown that Americans want to raise taxes on the rich, but the rich pay the campaign donations to the politicians who get into office -- and so the rich get their way and pay next to nothing in taxes, often less than the poor do as a percentage of their income.
There are easy ways to fix medicare and social security so that they don't break the American bank: Switch them from being pyramid schemes into means-tested welfare policies. Instead of taking from the young (who are the poor) and giving to the old (who are the rich), medicare and social security should take from the rich (who can afford it) and give to the poor (who actually need the money.) I'm fine with the idea of giving old, rickety people a peaceful and pain-free transition into death, I'm sure everyone hopes for something similar and therefore compassion dictates we give to others what we wish for ourselves. But giving free medical care and social security to people who are already filthy rich and could easily afford to purchase these services on their own is insane. Paying for these programs through flat payroll taxes on the young, the poorest people in America, is even more insane. Admitting that the young will never get their money back that they paid in taxes to support the elderly, because before then Medicare and Social Security will go bankrupt, is just adding insult to injury.
But simple measures like these, means-testing Social Security and Medicare payouts and changing who pays for it from young workers to old billionaires, is beyond the pale in Washington, which only listens to one group, the people who fund their campaigns. You see, votes are not a scarce resource. Americans have to vote for either Republicans or Democrats, so if they don't vote it's not like either politician is hurt. Nor do these parties have to appeal to the interests of most voters -- all they have to do is be Less bad than their opponent. So Republicans and Democrats find themselves winning votes through wonderful deals like these: "Vote for me and I promise to punch you ten times in the face. My opponent across the aisle is going to punch you twelve times in the face, so I think it's clear who you want to be your Congressman this coming November."
The opposing candidate will claim his esteemed opponent is using 'fuzzy math' and that in fact he only plans to punch you in the face 8 times, and the opponent is really going to punch you in the face 12 times. However, one thing is always certain -- no matter who you vote for they're going to punch you in the face. If you don't vote, they'll still punch you in the face. If you vote for a third party they'll laugh and then punch you in the face.
Therefore, our politicians are not public servants, nor must they answer to the electorate. They are a monopoly and we are a captive audience, a captive consumer, a captive buyer of their punch-in-the-face-program that we vote for every 2 years with our pretend vote that offers no positive choices for anyone.
However, politicians do have to answer to someone to get elected, and to these people they are amazingly polite and obsequious. They'll do anything to make sure these people are aided by their policy programs and proposals. They are the one necessary ingredient and the one constituency whose voice you must actually heed -- the campaign donors. In order to get elected, you need millions, sometimes billions of dollars to blanket the airwaves with lying advertisements and false promises. This money also helps fund a campaign staff who stages rallies, bus tours, makes fancy poster designs and most of all helps 'get out the vote' by making phone calls and door knocks to all the voters to personally ask them for their vote. Money is power in politics. It is extremely rare for the candidate who raises more money to lose the actual election. Incumbents win something like 97% of elections in America, this despite the fact that Congress currently has a less than 20% approval rating. How can this be? Once you realize that money is power in politics and that campaign funding can simply buy voter support, it all becomes clear. Incumbents win reelection not because the people approve of the job they're doing, but because they have well funded advertisements and campaign staffs who 'get out the vote' using psychological tricks on the helpless, deluded masses.
If money is power in politics, then it is only one more step to realize that most money in elections doesn't come from Moms and Pops with $5 bills. It comes from Goldman and Sachs in the form of hundreds of millions of dollar lump sum transfers. It comes from corporations, lawyers, and rich men of all stripes. The money they donate completely drowns out the 'concerned citizens' miniscule donations, and therefore politicians live and die by the number of rich people who will donate to their campaign.
There is a fundamental flaw in our democracy -- it was never prepared for the power of mass communication: Television, radio, telephone ads, etc. Advertisements work. We know this as a scientific fact because companies would never advertise pizza or beer on TV unless it worked. No matter how bad the product, no matter how useless the need it serves, if you advertise it, it will sell. Corporations have been operating by this maxim for at least the last 50 years, dishing out millions of dollars for an advertisement slot during the Super Bowl, because it MAKES A PROFIT IN THE END. Advertisements are so effective that even stuffing someone's mailbox with junk mail, even spamming their email accounts with junk mail, STILL MAKES A PROFIT BECAUSE SOMEONE OUT THERE IS STUPID ENOUGH TO RESPOND TO THE ADS AND GO BUY THE PRODUCT.
If a politician hires a sophisticated team to go make psychologically powerful advertisements that end with 'vote for me,' provided he has enough money to saturate the TV's and radios with these ads, he will win the election. Regardless of who he actually is or what he actually plans, regardless of his voting record, regardless of anything, he will be elected because voters are easily swayed by advertisements in their public life -- just like they're easily swayed as consumers in their private life. The moment getting elected became disassociated from actually doing a good job, which in the past was the only way to get 'good press,' politicians stopped concentrated on serving the people and started concentrating on serving their campaign donors.
There's an easy solution to this problem: We should ban all campaign donations and all private parties that advertise for one particular candidate or political party. All political campaigns should be publicly funded -- no politicians should be beholden to any private rich individual nor answerable to them in the next election. The campaign funds should be distributed exactly equally, as would the airtime for their ads and everything else. Everything would be divided right down the middle, so that elections are once again between people, and not campaign coffers. But the Supreme Court has made this impossible by saying that distorting the political process and buying politicians is 'free speech.' It's now a first amendment constitutional right to buy the politicians you want into office regardless of popular will. God save us! They're all in it together, this cabal of elites who do themselves favors and protect each other's backs. Congress serves the rich, the rich fund Congress, and the Courts give them a constitutional right to corruption. Unbelievable. Aliens looking down on America would be rolling on the floor laughing at us.
So we're back to where we started. The economy is awful. The government must act to save the poor at a time when their savings have been wiped out and they've become unemployed and unemployable. A simple solution would be to wipe out everyone's debts and let them, and the nation, start over with a clean slate. But this would hurt rich creditors who are happily collecting interest on these debts, making money for doing absolutely nothing, parasitically sucking the blood of the actual workers who are indebted to them, and have to be indebted to them, to pay for anything in this insane world of overly priced college tuitions, health care and houses. It wouldn't hurt them much. Rich people have so much money squirreled away in so many various locations that a debt default would barely touch their vast, ever-growing assets. It certainly wouldn't take away 50% of their money, or 66% of their money -- but that's exactly how much the poor have suffered during this recession. It would be simple justice to confiscate 2/3 of all the wealth of the rich, at least then they'd be suffering like the actual people of America, but defaulting on our debts wouldn't begin to hit that 2/3 limit.
Another way to hurt the rich would be to means test medicare and social security. If we restrict these welfare programs to only the needy, we could generate vast savings for the government, which in turn could be used to balance the budget. But this won't happen either, because the rich prefer getting free money from the government while paying next to nothing in taxes, eventually becoming net recipients of tax dollars even though they are the last people on Earth any government would dream of redistributing money to in a sane world.
Another way to hurt the rich would be to raise marginal tax rates back to the 1990's rates under Clinton, or even better to the 80% tax rates of the 1950's, back when our country actually worked and people could own a house and support a family with a single breadwinner while having a lifelong secure job. But we aren't allowed to do this either, because somehow Congress can't find the votes to raise taxes on the rich despite overwhelming popular support for such a move. Instead we are treated to an inflation tax, a tax that hits the poor the hardest, a regressive tax that barely touches the rich (who have their money in inflation-protected assets) while devastating the poor (because their wages haven't risen since 1970 but the price of essential goods like health care, education, food and oil just keeps rising and rising.)
We are reaching the point where the rich have told the poor of America to 'go eat cake.' Congress, we are told, belongs to them now, and they aren't about to do a single damn thing for the rest of us. The 85% of Americans who are on the outside looking in to these marbled halls, wondering why Congress never does a single thing except punch them in the face ten times every two years, have lost their country and become serfs to pitiless corporate masters. Democracy, which was meant to be a leveling force between the rich and the poor, to serve as a check and balance on the power of the rich, has inverted itself into just another tool of the rich to oppress the poor. There isn't one single politician in Congress with the guts to change anything meaningful that would help the poor in a noticeable manner. There are, however, plenty of politicians eager to undermine basic worker protections like the minimum wage, immigration control, labor unions, merit-based college scholarships, and any other policy designed to help the middle and working classes become upwardly mobile.
When government ceases to serve the people, and the economy ceases to function as a provider of basic sustenance, revolution inevitably follows. The French Revolution, the Russian Revolution, or the fall of the Soviet Union -- pick your example. People know, instinctively, that government can be made to serve their interests. They know that they do belong to a vast majority that could be given a much better deal than the one they currently have. They know they can shuffle their losing hands into the deck and redeal for a new game. The question is always whether it's worth the cost and risk, or if it's still possible to endure the status quo. As Great Depression II drags on, the status quo is becoming more and more unendurable. At some point public anger will cross the tipping point and the real Hope and Change will begin.