BY VERN TURNER
Did you see where the stock markets took a dip the other day? It seems the Barons of the Bull Market got jittery because consumer spending wasn’t up to expectations and a persistently high unemployment number keeps nagging at their loins; I think you have to read “hopes and dreams” here.
Yes, it’s true. Americans just aren’t spending what the 1% want them too spend. Why this is so?
This may sound like just another trip down the memory lane of so-called “conservative” economics, but Prosperity Lane has morphed into a muddy path strewn with the rocks and roots of broken philosophies and just plain capitalistic incompetence.
In the 1920s, the top income tax bracket was around 25%. Today, after the infamous Bush tax cuts for the rich, the rate is around 35%, the lowest since the Great Depression.
Republican economics say that low taxes equate to jobs creation. Well, in 1929 and 2007, the American jobs environment cratered and millions of American workers [Note: These are not “takers.”] became unemployed, some permanently. One could say it’s just coincidence if it weren’t for the similarities in the government’s approach to minding the store for the “general welfare of the people.”
Both of these eras were saddled with the “something for nothing” thinking of politicians who listened to the wrong economics “experts.”
They said that the free market would take care of all ills. They said that low taxes on the wealthy would create more jobs for the working classes. Neither of these “ideas” proved valid.
Finally, the savior of capitalism, Franklin Roosevelt, did what was needed to create long-term stability and prosperity for the vast majority of the American citizenry; he brought forth the New Deal and all of its controls on capital, banking and investing that prevented what happened in the 1920s and the early 2000s.
It’s ironic that a liberal Democrat would actually show the capitalists how to save themselves from themselves, don’t you think?
We can trace our recent problems back to the 1971 memo by corporate attorney Lewis Powell to the U.S. Chamber of Commerce [another delicious irony] that called for corporate/banking America to purchase the U.S. Congress in order to get the laws changed to favor business and banking without those annoying restrictions like the Glass-Steagall Act. This little ditty prevented commercial and investment banks from merging and blowing everyone’s money at the crap tables of “free market” enterprise.
So, naturally, when Republicans controlled the House in 1999 they repealed this act and forced the politically crippled Bill Clinton to sign it into law.
Clinton also foolishly promoted and signed into law the North American Free Trade Agreement that rewarded corporate America for sending our jobs to cheaper labor markets.
These two actions are most responsible for the downward spiral in which the American economy finds itself today. The other significant drain on our domestic capital is allowing corporations to avoid paying taxes and allowing the rich to hide trillions of dollars in off-shore banks.
The outcome of eight years of the Bushites’ actions on de-regulating banks and providing more tax loopholes added to the almost six years of the Obama Administration screwing up their political advantages and trying to negotiate with a brick wall – aka the Republicans in Congress – regarding anything that benefits the majority of citizens.
This is economic stagnation with slow-growth, and cheapening of the consumer classes. While the rich get richer, the consuming classes consume less. Hiring Tim Geithner and Larry Summers to advise the current president was inviting both foxes of the crash into the hen house of the American worker.
Is Wall Street finally figuring out that it screwed up again? Are the investors finally getting it that sending good jobs overseas and fighting against a living wage for all those 30-year olds working in fast food is reducing consumer spending? Are they finally getting it that there might be a problem that the greatest consumer capital nation in history is not able to consume at an ever increasing rate, thus limiting profit growth? Is this their Homer Simpson moment when they slap their foreheads and utter that famous groan of understanding that unregulated capitalism will consume itself from within – just as their arch-enemy Karl Marx predicted it would? Will the movers and shakers of American finance finally get it that the American worker in the 21st Century needs to be well-educated and employed in a good paying job in order for any economic stability to exist?
As long as the moneyed interests in this country keep K Street awash with lobbyists to do their specific bidding in Congress, nothing will change. The poor will keep getting poorer, the middle [consumer] class will vanish and another dramatic series of events will occur that will make the Great Depression look like a walk in the park.
Why? Because there are now 315 million of us instead of the 135 million in 1929. That’s a lot more angry and hungry mouths for the 1% to ignore this time.
– Vern Turner is a regular contributor to The Oklahoma Observer. He lives in Marble Falls, TX, where he writes a regular column for the River Cities Daily Tribune. He is the author of three books – A Worm in the Apple: The Inside Story of Public Schools, The Voters Guide to National Salvation and Killing the Dream: America’s Flirtation With Third World Status – all available through Amazon.com.