Archive for Barack and the Economy

Did President Obama Misspeak on Economy?

Posted in Playthell on politics, Uncategorized with tags , , on June 12, 2012 by playthell
President Obama Speaking to management and workers

 Popular Democracy in the Age of Cable TV and Internet

           In an attempt to explain the nature of the unemployment crisis in the US, President Obama said that in comparison to the public sector, the private sector is “doing fine.”  What he was referring to is the fact that his policies to rescue our economy from the worse downturn since the Great Depression has created over 4 million private sector jobs, while at the same time the public sector has experienced massive job losses due to cutbacks in spending by the Republican governors and legislatures who have taken control in many states.

If we consider the fact that the economy was in a free fall, losing 700,000 jobs a month and the world banking system was in danger of total collapse when he took office, Barack’s performance managing the economy, especially with the hostile obstructionists Republicans in Congress –  has been outstanding by any objective measure.

Despite an endless stream of ideologically propelled drivel – as opposed to fact driven commentary – there was no viable alternative to the stimulus provided by TARP and the Economic Recovery Act.  Those who argue otherwise are either ignoramus or charlatans.  For instance a total banking collapse would have resulted in the collapse of the Credit Default Swap market; which was estimated to be around 66 trillion dollars.

This is far too big for the US government to guarantee.  At the time things began to fall apart most Americans – this writer included – had never heard of a credit default swap.  And only a small cabal of financial experts understood what a derivative was. That’s why Barack appointed Timothy Geitner, the former President of the Federal Reserve Bank of New York, as Secretary of the Treasury – a decision that was vociferously criticized by ideologues on the left and right.

Yet it was these mysterious financial instruments – some designed by theoretical mathematicians paid to devise new ways to make money from investments – that wrecked the economy and wiped out billions of dollars in savings and investments of middle class Americans, while forcing thousands of firms into bankruptcy or near bankruptcy resulting in mass layoffs. Had the federal government not intervened it would have resulted in an economic catastrophe of such magnitude that the government could not bail us out.  The consequences would make the 1930’s look like the good old days.

Hence these banks were literally “too big to fail” and yet the Republicans are blocking the regulatory regime passed by the Democrats in Congress, and signed into law by President Obama, which would prevent a meltdown like that from happening again.  This means that it could happen again!

But in spite of all the anger and invective leveled against the reckless financial speculators, who were given free rein to do crazy things by Republican deregulation of financial markets, the American people put the Republicans back in charge of the House of Representatives only two years after their policies led the nation’s economy over a cliff.

Ironically, the very policies that are denounced by ideologues on the right and the left – confusing many Americans in the process – prevented a total catastrophe and set the economy on the road to recovery.  The bank “bailout,” or TARP, which was initiated by Bush but continued by Obama, the Economic Recovery Act and the Auto-Industry bailout were essential elements in salvaging the economy.

Ironically, the response to these policies exposes the “antagonistic cooperation” that increasingly occurs between ideologues at opposite poles of the political spectrum.  Although they hate these measures for different reasons – Righty’s hate any government intervention because it violates their “free market” theology; Lefties hate it because it props up the capitalist “criminals”.  As I have pointed out ad nauesum: This is a distinction without a real difference!

The problem confronting the working class and imperils the Obama presidency is the persistent high rates of unemployment.   It provides rhetorical weapons that his opponents in the Grand Obstructionist Party can use to attack him.  But everybody with any understanding of the problem knows the present unemployment crisis is structural, which means those jobs have disappeared for good.

During the Great Depression of the 1930’s Professor John Maynard Keynes, the brilliant British economist whose policy recommendations led the world out of the economic disaster, identified a different kind of unemployment from what he was observing then. Keynes called this “technological unemployment, “and he was referring to workers who had been rendered obsolete by the advance of technology.

And Keyenes wasn’t the only one who saw this coming; so did a brilliant black assembly line worker in a Ford automobile plant in Detroit, James Boggs.  In a prophetic book titled “The American Revolution: Pages from a Negro Worker’s Notebook,” published in 1961, Boggs predicted the coming “Cybernation” of the American economy.

From his position on the factory floor, this working class intellectual could see that the advance of computerization and robotization would eliminate millions of industrial jobs, because the machines could perform the same work more efficiently i.e. faster and cheaper.  And neither of them envisioned Globalization, which also serves the business and corporate class but not American workers.

That’s why long after economist announced the end of the recession five million workers who were gainfully employed before the crash remain unemployed; while corporate profits and the stock market have gone through the roof!  This is what the president was referring to: And he was right!

That’s why he is advocating government intervention to help the working class, and Romney is advocating further tax cuts for the plutocrats and no regulation of the corporate and financial sectors – whom he calls’ “the jobs creators.”  This is the Bush formula that wrecked the economy.  Former President Clinton, one of the most successful managers of the American economy in history, has called Mitt’s economic formula “the Bush plan on steroids!”

In spite of the obvious truth of both Presidents Obama and Clinton’s observations on the state of the US economy and the fallacies in Republican economic prescriptions to cure the lingering maladies that are causing the average American so much pain, a dangerous combination of the rightwing electronic tower of babble such as FOX News, talk radio, and the blogosphere, plus an ignorant electorate, has conspired to hopelessly confuse political reality and millions of voters can’t tell fact from fiction.

All of this raises serious questions as to whether our participatory democracy is part of the problem, rather than a viable path to solving the protracted crisis of American capitalism.

Barack on the factory floor at Boeing

Touting American Manufacturing Excellence

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Playthell G. Benjamin

Harlem New York

June 12, 2012

Spinning the Down Grade

Posted in Playthell on politics with tags , , , on August 10, 2011 by playthell

 Joe Scarborough: Intellectual Lightweight

 

The Chattering Classes Provide More Heat than Light!

Listening to the loud mouth light-weight media wags, whether liberal or conservative, attempt to pin the blame for the economic crisis kicked off by the reduction of the US credit rating on President Obama makes me want to puke!  As Standard and Poor’s made clear in their statement explaining the reasons for downgrading the US credit rating for the first time in our history: it was the reckless behavior of the Congressional Republicans in threatening to push the nation into default until just a few hours before deadline that caused them to question the US government as a safe risk for investors.  While the US economy is experiencing other problems just now, there is no question that the reckless behavior of the Grand Obstructionist Party was the straw that broke the camel’s back! 

The plummeting stock market is a direct result of the panic induced by the credit downgrade, and the down grade is a direct result of the threat by the House Republicans not to raise the debt ceiling unless the President agreed to a budget plan that included all cuts and not a dime in tax increases on the rich.  Hence what is traditionally a fairly routine matter, raising the debt ceiling, became a choice between economic suicide and capitulation to the priorities of the most extreme right-wing elements of the Republican Party; who were pushing a budget shaped more by ideological than economic considerations.  This put the President in the position of attempting to negotiate with the moral equivalent of economic suicide bombers, who were willing to blow up the economy even if it meant they wouldn’t survive politically.

All of the choices available to the President were distasteful to his progressive base and odious to him personally, but he had a higher obligation to preserve the economic stability of the nation.  The old axiom that one should never negotiate with hostage takers is all well and good, unless they are threating to blow up the building with you and other hostages still inside.  In this scenario the paramount objective is to keep the bomb from going off and rescuing the hostages.  Hence those who say that the President should have called the bluff of the Tea Party fanatics and risk default are as reckless as them.  Look at the fallout from just threatening default; we can be certain that our troubles would be magnified ad infinitum had the country actually defaulted.   The President chose the lesser evil, which is the essence of politics in a divided government.  It’s time for the left to grow up and behave like politically mature actors: which means rallying around the Democrats to reelect the President and return both houses of Congress to Democratic control.

While ideologues on the left rant and rave, my sister, a retired educator in New Jersey, who cares for our 90 year old mother, lost $100,000 of her life’s savings in the crash of 2008 and thanks God that the President didn’t allow the government to default.  She represents millions of vulnerable Americans; especially those who depend on Social Security, unemployment compensation, pensions and other government entitlements, or has 40 k’s and other private retirement and investment plans.   After working a life time she is seeing her home lose value, her investments go down the drain and her pension threatened.  Hence she, and others like her, thinks the President is doing the best he can for the American people against the worst opposition any American President has ever faced.  And she believes Barack is the only friend working and middle class people like her have among those campaigning for the Oval office.  And so do I! 

Yet even so, the President just can’t win with the largely white chattering classes that dominate the discourse from their broadcast booths, editorial columns and internet blogs.  At times I feel like Diogenes the cynical Greek Philosopher, scurrying about in the dark of night trying to find a wise man.  After all, it’s not rocket science, and one does not have to be an intellectual giant to figure out who the culprit is here.  The Republicans made it plain that their paramount objective is to destroy the Presidency of Barack Obama. To accomplish this objective they became the Grand Obstructionist Party, opposing everything he attempted to do even when he adopted positions that they proposed; saying “no” over and over like a Buddhist chant stuck on stupid!  Turning a blind eye to the rampart racism and anarchism in their campaign rhetoric and slogans, the GOP encouraged the rise of the Tea Party.  And after the 2010 congressional elections the Republicans elected 87 freshmen who were pledged to the so-called Tea Party – a group of profoundly ignorant avowedly anti-government zealots. 

Congressman Cantor Dressed for Work

They sent in the Clowns!

With their arrival Speaker Boehner lost control of the Republican caucus, and things went rapidly downhill from there!  Rank amateurs with a Kamikaze mentality, these people equated political compromise with surrender and pledged to fight to the death of the American economy to get their way.  The result thus far is the escalating financial crisis that threatens to plunge the economy into chaos and possibly a double digit depression.  Since the facts I have presented here are indisputable, the swelling chorus of anti-Obama invective emanating from the chattering class – a collection of right wing verbal arsonists, wishy washy liberals and fuzzy headed leftist ideologues –makes no sense.  It is fundamentally irrational! While this is SNAFU for the Republicans – “Situation Normal All Fucked Up” – I am puzzled by the confusion on the left.  The critical lesson of the present fiasco is abundantly clear: It is not wise to elect anti-government zealots to office because they cannot govern!    

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Playthell Benjamin

Harlem, New York

August 8, 2011

 

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