January 24, 2008
by Robert W. Barker
Will Rogers once said, "Democrats promise you everything even that your lawn will improve if you elect them to office. Republicans will tell you governments do not work, and when you elect them they go about proving it."
As America stands on the precipice of a huge economic downturn we must ask ourselves; what happened? Where is that US leader in economic growth and stability or did it ever exist? And as we borrow with interest from China, the World Bank, Japan, and the Saudis, we are simultaneously printing money that grows progressively worthless daily.
Most importantly, do the "major" candidates notice?
Blaming the so called "Sub Prime Crisis" for the economic jolt we are receiving is only naming a "symptom," not the ailment. The real disease is "Bushenomics."
Conspiracy theorists and even those less inclined have whispered for years that the Republican extremists want to bankrupt America in order to stifle entitlements. An insidious plan it would be, yet judging by the past three Republican presidents and their collective economic results, it has been shown to be more than possible. Mr. Reagan, Mr. G.H. Bush and Mr. G.W. Bush have all operated with a huge debt hanging over their heads, and each passed it on to the next administration.
Only Mr. Clinton actually tried to balance the budget like a responsible fiscal manager should.
In 2000 we held a projected surplus and a rapid growth cycle propelled by the high tech industries and real estate bubble, a slight leveling off occurred yet we garnered a stable economy; now it is vanished in Bushenomics.
America enjoyed a rather positive international reputation in those times -- which is also missing in action today.
Those caldrons of perceived stored treasures stashed away under the Clinton years are now nowhere to be found and we find ourselves staring at a deep recession, pecuniary and political. Perceptions mean so much in this economic atmosphere of global proportions; we cannot afford to ignore debt and perception.
Poor fiscal policy and miserable foreign policy have drained both these national treasures.
Today we are seeing the results of Bushenomics and this method is far more Voodoo than for you. A supply side economic structure or trickle-down theory was utilized by the Bush bunch for seven years or perhaps more aptly put, the ole "who cares about the bottom" strategy.
A dangerous course of allowing the diminishing of the US dollar has been pursued for several years, ostensibly to positively influence trade deficits. Yet International Trade Deficits have grown exponentially since Mr. Bush initiated his policies of economic chauvinism. The US dollar is now half of the value of the Euro, American buying power dribbles away with daily diminishing returns for the less-valued currency. The US Dollar was once the preferred currency, now more and more economic experts are telling their countries and organizations to switch to the Euro, thereby threatening to leave the US isolated economically.
American economic power was built around a well-paid sturdy middle class that created viable consumers and small to middle size investors, an economic catalyst that rolled along quite well. A buying, selling, building and working public are tantamount to a free market economy's health.
With the Bush tax cuts for the wealthiest 1% of the population and his administrations encouragement of "outsourcing middle class jobs," we saw part of the problem unfolding. Then we were obviously not watching as he went about encouraging "legal offshore Tax Shelters," "Corporate Welfare," and "Guaranteed Government Loans" to certain corporations.
They hate entitlements for the underclass but prop up corporations with billions in interest-free finance and no payback loans and plain old gifts, called "corporate welfare."
Petroleum and energy men run the country and it seems policy reflects a tainted favoritism towards that group. "Cronyism" is a word that must not be used lightly, but it is an apt description of this no-bid contracts to buddies, every Federal agency in hands of Neo Con comrades, and all policy benefits Energy Barons; that is the definition of cronyism.
This is Bushenomics at its essence. They believe they have a God-given right to loot the country like an open oil field and drill the hell out of it and leave it barren. Bushenomics means the prosperous are the investor class and have the money, so cut their taxes, they will invest, those investments create additional business therefore everyone's life improves and the jobs grow and the nation gets stronger.
That's the bill of goods they try and sell us and it all sounds fine to the average Joe, yet it only works with limited success if the companies are sending jobs away and putting needed tax dollars in offshore accounts.
In addition, they claim to create additional jobs with this strategy, yet do they?
For the sake of comparison let us examine the Bush and Clinton job creation statistics for the first six years of gained employment data. Inspecting the first six years of the Clinton administration, 13.7 million jobs were created and were better than average wages. The six Bush years created 3.7 million and were for the most part of the lower wages variety.
Therefore we can see the problems with this theory already and it gets worse.
"Privatization" is a byword in this Bushenomics system that actually means "selling off assets" which in the case of the NeoCons is our "military establishment" and its inherent profitable wars. Big revenue for gigantic oil and war machine conglomerates was made profitable by this new tax dollar scam called "privatization." You see gang -- one-third of our entire military budget goes to private firms like Halliburton, Blackwater or Bechtel. So when you hear how they "Support the Troops," you will know which troops they really care for.
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From 2003 on, we were acquainted with the Bush policy and this questionable bellum in the Mid East that created petroleum driven economic tensions. Billions of tax dollars soon dropped into bellum, as we borrowed those billions at an agreed on interest rate. War commenced with no apparent provocation resulting in spiked oil prices, at immense benefit to Bushenomics comrades in the petrol industry. Just the way things are perhaps, or a PNAC goal from the early nineties.
In the last five years more than 2 million jobs have been transferred overseas, and the replacement jobs pay substantially less than the jobs sent away, as the great middle class slowly fades away.
Meanwhile, corporate CEOs' salaries have mushroomed at an enormously significant rate, millions a year. This leaves a huge economic gap between stratas and renders the middle class with less consumer power, thereby diminishing our strength, the all-important middle class.
The income and estate tax cuts initiated the last three years have primarily benefited a very small percentage of wealthy Americans. Further the reduction in Federal revenues going to the various states has decimated many state budgets, thereby cutting essential services for the poor and middle class. We have numerous near bankrupt or bankrupt states, townships and counties more than any period since the depression.
This NeoCon theory of "private sector" taking up the slack in some unknown philanthropic display has fallen far short of the needs of the states. Upward mobility is hampered in such one sided conditions even by dent of hard work and first-rate planning.
Growing homeless rates move higher than ever and desperate citizens drop into a roadside ditch to sleep, or tax our welfare system further. For most on the lower level Bushenomics leaves the prospect of a middle class lifestyle irretrievably out of sight.
The prolonged slump in new housing construction in 2007 is down to the lowest levels in 27 years, and is expected to drop further. This is one of the more telling statistics and will prove to be the main indicator of our economic health.
This housing bubble was just that, full of air, and too many well intended Americans started to depend on that bubble as a savings account, more like a lose Champaign bubble as it floats away. Hidden in the financial pages of the globes newspapers were numerous indicators of our looming demise, yet we paid little attention or prayed it would go away.
Over the last seven years in this economic atmosphere engendered by the Bushenomics Neo Con's, finance regulators abandoned "standard banking practices" and cautionary rules and allowed shady financial firms to pull a bait and switch, on millions of unqualified borrowers. All this was funded by "Blue Chip" big whigs on Wall Street, under smaller named but Blue Chip holdings organizations.
Banking bandits figured they could make a ton of cash on mortgages to less than qualified customers or poor credit risks. Charge higher and upward moving interest rates, variable rate loans and capture a hitherto neglected customer base in this booming housing market. Increasing housing prices, huge equity gains, construction booms, caused the process to amplify, and sky rocketed into big cash for the average guy.
This get-rich at home atmosphere made every working adult in America yearn for their own home. It is the American dream after all, and many were not quite ready. Consumers are culpable and they should be held at least partly responsible; no matter what the circumstances we all know there is an automatic caveat. Yet here we see the reasons and motivations for sound banking practices and Qualified Buyers.
The thinking in these Wall Street institutions was that while this may lead to massive defaults and foreclosure rates in the future, they will increase the profits today.
Wall Street investors were inspired by the open markets, invented something called the "Securitization" of mortgage loans.
It works like this, the mortgage broker start the process on the loans gives the terms and sets the rates at often very high levels, then they sell the loan contracts into Federal backed bonds. All concerned make out on these transactions some investor ends up with the Bonds and very little risk, between FDIC and Fed Bond scams; they are safe. Sub Prime and variable interest loans were initiated, and standard banking practices were abandoned, stock option mania took over common sense; all this laissez faire no holds barred Neo Con capitalism has left us in dire straits and sinking fast.
The American taxpayers acquire at least the greater part of the actual risk in this scenario. Further the scam gets better as the company stock prices go up and options pay off, they make out in every direction. All this in almost certain understanding that this scam will someday come crashing down, that day is here folks. Stock Market numbers are now starting to reflect the reality of the new economic situation that many expected long ago, tax breaks helped to temporarily stave off the inevitable economic nose dive that now appears at our doors.
Mr. Bernanke lowers interest rates and that is one temporary panacea we can utilize; yet even that will be lost in an avalanche of economic woes. "Inflation" has once again become a growing problem and is one of the heaviest anchors holding down our viability. That too is but a symptom of the real cause of poor fiscal policy that was designed to fail.
Mr. Bush recently unveiled a plan to stimulate the economy and claims $150 billion dedicated to assist, but it falls far short of what we need at this time. For more printed worthless dollars are not going to bail out this downward falling turkey.
Few in international business have faith in the United States government or even American corporations any longer. International business is plummeting confidence and dependence in US economic measures and when trust is abandoned, we lose the foundation of your economy. America comes on like a dying empire, and investments in a diminishing empire produce a cautious and limited investor.
America is in a calamity of self-reliance in anything made in USA, as the products must compete with products from China and other places where labor cost and material are substantially cheaper. To do this we must be able to produce quality and ingenious products, and gain our self respect by consistent mercantile measures, not sending jobs overseas. Making deals with outside manufacturers like Toyota in the USA to have them build plants here through tax and trade incentives will help.
These deeply flawed policies that seem designed to fail and push us towards a depression like the 1930's by necessity should cease.
Perhaps this latest market jolt and the sub-prime crisis will awaken the current candidates to the reality that "it's the economy stupid" should be the new Campaign slogan.
Any layman that uses his brain can clearly see that Bushenomics is killing the USA and it does not take an economics PhD to understand that several simple things can be done to help bring us back to a balanced budget and brighter future.
Simple Solutions:
1. Withdrawal of all troops from Iraq saving billions
2. Bring back a fair equitable tax base
3. Cut spending on pork barrel legislation
4. Bring a sense of stability to the markets with sound fiscal policy
5. Restore our reputation around the globe by doing the right things
6. Create jobs through training and economic incentives
7. Stop the tax incentives for offshore shelters
8. Give incentives for keeping jobs in the USA instead of paying corporations to leave
9. Negotiate with the people we have refused to talk to {Syria, Iran} and bring a sense of stability to the oil rich Middle East, which will go far in holding petroleum prices down
10. Ban lobbyists from DC (of course this one will never go over but it would really help)
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Robert W. Barker [send him email] is a writer, professional photographer and travel aficionado from Eureka Ca. His work is carried on many web sites around the globe, a first novel recently copyrighted in the library of Congress, is soon to be published.
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