Friday, January 15, 2010

Lessons from America's Lost Decade

By Robert Parry
January 15, 2010

As the United States takes the measure of Barack Obama’s first year in the White House and looks beyond to what could be a difficult new decade, it might be useful to first stop and extract some lessons from the 2000s, which proved to be a lost economic decade for many Americans.

Read on.


Anonymous said...

"Despite this record of economic failure – trillions more in debt but no net increase in jobs – many Americans appear to have learned no lessons from either the Bush-II presidency or the legacy of Reaganomics. Any thought of raising taxes, addressing long-term problems like health costs, or investing in a stronger domestic infrastructure remains anathema to large segments of the population"

Yes, it's Reagonomics. But what exactly _is_ Reagonomics? I do not think it is about "lowering taxes" and "reducing governement" (thus sending things down the drain, I suppose). And does it have anything to do with job growth?

I _do_ think that it is about:

1) Gov. going massively into debt and destroying wealth and scare resources (either allocated from you or your children) by:

- financing projects that have zero ROI like military machinery - destroying wealth by subsidizing Lockheed B-2 bombers

- financing "earmarks" to buy congressmembers - destroying wealth by paying for projects no-one needs or wants

- financing pie-in-the-sky 'job creation' projects - all too often projects where worker A gets paid to fill up the hole just made by worker B.

And then:

2) Gov. inflating the money supply by printing money or by enabling low interest rates if bills can't be paid or a recession looms, thus creating economic bubbles and inflation (essentially taxing you through the backdoor; you get poorer while getting pay rises!). The last decade was just the passage where the Internet bubble was papered over (thanks, Greenspan) and then segued seamlessly into the housing bubble with fat helpings from government interventions and a banking sector full of cash and low on ethics (everyone shall have houses! free money!!), which then burst. We are still in the papering-over phase for THAT. Unfortunately the glue seems to have run out.

"Raising taxes" is often taken to mean adequately implemented "wealth distribution" from the rich to the poor (leaving aside the moral hazards of such a leveling effort). Would that it were so. All parties love to splurge, but not on anything of value (Obama just surpassed Bush in military per annum spending I hear. He says it's 'temporary' and blah blah blah.) "Raising taxes" then reduces to an idle exercise in self-immolation for the benefit of well-connected people living in Imperial Washington. Do we want that?

As for the job growth - I can only provide handwaving arguments not having thought deeply about the dynamics of an economy - but I do think that throwing resources out of the window and printing money to feel rich is not a formula for fostering investment into industries which actually provide jobs.

jean allen said...

Anybody heard of Celerino Castillo? Cele blew the whisle
on Ollie North and the Reagan-era
CIA scandals....and he is being punished. He is a hero from a patriotic hispanic family. His life
is being destroyed in revenge. He's in jail on a trumped-up gun charge
You can find info about him from his website: powderburns...or google
his interview with Alex Jones. Please help this Vietnam vet hero!!
Please, I beg you.

Jean Allen,
Tuscaloosa Alabama