Economists say we're going to get hit
Whadda ya know? I’m not a lone voice shouting about economic shoals ahead.
Actually, I was aware before I wrote the angry warning below (article immediately below this one) that other people were starting to talk openly about an approaching economic disaster. Other than picking up a useful quote here or there, however, I deliberately avoided reading what others said until I finished my own piece. Since then, I’ve looked more closely.
Some of the folks now cranking the warning sirens are loaded with credentials of the type that give others permission to believe them, so you needn’t take my word for anything.
The big stunner is the speech that Stephen Roach, chief economist for the investment banking firm Morgan Stanley, gave a week or so ago to a bunch of mutual fund managers. I’d love to have been sitting among those geniuses, watching their reactions. Reports suggest that several had to have their diapers changed.
Roach told the ever-optimistic mutual funders that this country has "no more than a one-in-ten chance of avoiding economic Armageddon." He said there’s a 30 percent chance we’re going into a nosedive very soon, and maybe a 60 percent chance that we can "muddle through" for an unspecified while yet before going bust.
That seems fairly clear. "Armageddon" does not suggest a mild downturn.
Others who have been a bit less blunt but apparently are no more optimistic include Robert Reich, secretary of labor under President Bill Clinton and now professor of social and economic policy at Brandeis University, and Paul Krugman, Princeton economist, New York Times columnist and author of 18 books, mostly on world trade and economics.
The Central Bank of China told this country to get its economic house in order last week, for heaven’s sake, and European and Asian central bank officials started talking recently about buying euro-based securities rather than U.S. government securities.
Come to think of it, Reich is catching up on the bluntness scale. "We’re living beyond our means," he said in an article for the excellent Internet news and analysis site TomPaine.com. "American consumers are deep in debt. The nation is importing more than we’re exporting. Most importantly, the federal budget deficit is out of control."
And, he said, "It’s one of the oldest of economic laws: When you’re living too high on the hog, eventually you’re gonna fall off and find yourself in pig slop."
Reich also poked at a devil that has been gnawing at my innards for months now.
After observing that, "Surprise, surprise! It turns out that cutting taxes while waging an expensive war and doling out corporate welfare leads to red ink," he wrote, his pen dripping sarcasm, that "If I were cynical, I’d suspect the White House had an ideological agenda to starve the government so it can’t do much of anything in the future except wage war."
Then, today as I write this (Dec. 2, 2004), Patrick C. Doherty, associate editor at TomPaine.com, published an essay suggesting something I’ve been thinking for a long time: essentially that the Bush crowd is deliberately driving us into economic catastrophe. Doherty has much experience working on conflict resolution and economic development in several regions of the world, including the Middle East, Africa and the Balkans. His observations matched the hint from Reich and my own conviction.
Doherty quoted the professional Republican ideologue and policy wonk Grover Norquist as saying, "Democrats play for lunch. We play for keeps."
The meaning of that is, simply, that the right wing that Norquist represents is willing to do whatever it takes to remake this country into something new and, for the vast majority, frightful.
Doherty also pointed out that in the 1980s, when most people thought Ronald Reagan was a lovely, benign sort of fellow – and far too many still do – Reagan’s chief budget adviser, David Stockman, willingly admitted that the Reagan administration deliberately expanded federal deficits in order to squeeze "social entitlement" spending. That means a type of spending that horrifies the Bush crowd even more – spending on health care, public education, pensions and the like.
Norquist, of course, is famous for saying the goal of the rich men who now control our government is "to get government down to the size where we can drown it in a bathtub."
It’s a pity the corporate news outlets aren’t telling the public this: the Bush crowd and the army of Tom DeLay and colleagues are openly at war with all programs that benefit the middle class, let alone the poor. They proclaim it; they do not hide it.
They’re serious about destroying Social Security, though they call their program a "reform." They are serious about turning public education into a bare-bones system that produces employees trained just adequately enough to function at work. (An educated public is dangerous to the lairds who rule the land.) They want a vast population of economically insecure people who will take whatever they can get in terms of work, pay and working conditions. They want "tort reform," as Doherty said, to cut business free of safety and other regulations that reduce profits and give the public some power to make recovery for injuries and corporate theft.
No other interpretation of the right wing agenda makes sense. There is no other logical explanation.
The right wingers are not so stupid as to believe that further cutting taxes while ramping up already outrageous military spending will help the economy. They are not foolish enough to think that dicing Social Security – while helping corporations shed pension obligations – will provide the public with more secure incomes. They know that a sharply falling dollar is bad for the public and that a collapsed stock market will mean a major recession – we could say depression – and that millions of jobs will be lost. They know all that and more, yet they push ahead.
In some states -- including my own Minnesota, which once was an internationally admired example of how decent levels of social spending give birth to a robust economy – right wing politicians are pushing the same program. Despite taking a severe hit in the recent election, the Minnesota rightists are hammering harder. Gov. Tim Pawlenty, who essentially represents a very small group of very rich people who call themselves the Taxpayers League of Minnesota, made it clear in the past week that although the state faces another huge deficit, he won’t allow even discussion of the possibility of new or raised taxes.
Pawlenty and many of the Republicans in the Legislature signed a pledge, created by that rich guy’s organization, which many citizens call the Taxdodgers League. It says they will never under any circumstances support new or higher taxes. If one cared about the well-being of the state as a whole, and its citizens, that would be an enormously stupid position to take. But they don’t.
The school district of the state’s capital city, St. Paul, revealed a couple days ago that it is in desperate – truly desperate – financial shape. Other districts and the state’s entire public college and university system also are in dire straits. Such revelations don’t turn a hair of Pawlenty’s expensively coiffed head. He and his allies in the Minnesota Legislature are out to do away with all social programs they can destroy, and to take education away from all but those who can pay richly for the experience. The same thing is happening in other states.
It is true that in my anger, I probably will take some pleasure from telling the middle class fools who voted and even worked for Bush and other slick pols of his ilk to get stuffed when they start whining about how they’re being squeezed. I’ll undoubtedly take nasty satisfaction from telling them that if they want to know who to blame, they should go look in a mirror.
That won’t change the fact that we’re all going to suffer. What they have done, they have done to the blue states as well as the red, and the worst and most serious of the changes they bring to this country may well be permanent.
Individuals who grasp what is happening to this country often ask each other: Don’t they (the people at the top) know what they’re doing? Don’t they have to live on this planet (in this country), too? Don’t they have kids and grandkids who will have to live in a ruined economy, in a deeply damaged physical environment?
Seven or eight decades ago, F. Scott Fitzgerald wrote: "Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think they are better than we are. They are different."
I spent close to four decades professionally hobnobbing with the rich and powerful, and other than questions about the phrase "soft where we are hard," I know Fitzgerald was correct in his perceptions.
For several decades now, the rich and powerful have had to pretend they believed in equality for all, and that they are just like the rest of us. They never believed it. And now they have gained control of government, they own the White House and Congress and several state legislatures, just as their ancestors owned the people who worked their land and made their cloth and cooked their meals. They have stopped pretending, except where a little phoniness will help grease an election. (Yes, OK, there are some exceptions but, as the song says about regrets, "too few to mention.")
Like the British aristocracy, the rich of America believe they are rich by some sort of divine order. They are superior beings, of that they have no doubt. Their role in life is to run things, and ours is to do their bidding, nothing more. They are affronted by the middle class person who acquires genuine education, especially if that person in any way challenges their position. It is not right that a lower class person with an IQ of 180 should take a leadership spot that might otherwise be occupied by the son of an elite family, no matter how dim. It is not right that employees should demand pay high enough to give them a comfortable lifestyle. It is not right that the peasantry should dress well, eat well, travel. It is a deep personal affront to sit at a café in Paris, say, and find that the people at the next table are mere bank clerks or school teachers or, god forbid, low-level employees of one of your own companies.
The truth is that when the population as a whole prospers, the rich go on getting richer. If – or in this case when – the economy goes into the tank, they lose some substantial portion of their wealth, too, at least for a time. It doesn’t matter. It is an emotional issue, an ideological issue far more than a matter of practicality. They are compelled to put us in our places, as their tribal beliefs and history define those places.