Category Archives: Economy

The Big JOBS Plan: What is Possible? What is the Goal?

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Cover of End of Work

The mob is clamoring for a big, definitive “plan” to “create” JOBS.

The problem is, we are all yearning for a return to the prosperity and good jobs of the 1950s. A return to Middle-class America. That model of American prosperity lasted for a half-century, even as it was eroding away. That model lasted through the inflating 1970s, the greedy 1980s and the bubbling 1990s.

The middle-class model of America, with good-paying jobs all around — it’s over. We aren’t going back to the 1950s. It’s impossible. That’s where President Barack Obama’s JOBS plan has got to start.   Continue reading →

America, Out Of Balance

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We are fixated on the question: Is America headed in the right direction or the wrong direction? A sizable majority answers, the wrong direction.  But if you ask the wrong question, you get an irrelevant answer.

I think the question is not one of “direction,” but “balance.” What would be the “right direction” anyway?  East or west?

America has come unhinged, out of balance. Everything is distorted, like in a hall of mirrors. American wealth, American politics, American society, all badly out of balance.

Inflation adjusted percentage increase in mean after-tax household income in the United States between 1979 and 2005. Wikimedia Commons.

Wages are too low.  CEO salaries are too high. Too much wealth goes to profits. Average Americans are “underwater,” while corporations hoard wealth.

We have too many poor people at the bottom; hardly anyone remaining in the middle.  And a relatively small cohort of the wealthy — and the associates and lackeys of the wealthy (who are nearly rich or merely affluent) — at the top.

All the money and the power is at the top, very little money and power at the bottom.

The financial sector is bloated, the industrial base is rusted and hollowed-out.

Demand is too low, and supply is too high. The supply-demand equation is a worldwide phenomenon. The whole world generally has an excess supply of nearly everything, including production capacity. Most telling, we have a worldwide surplus of labor.

Too much greed; too little love. Too much corruption and incompetence in all our institutions. A deficit of honesty and diligence.

Too many putting their faith in luck; giving up on work. Too much speculating, not enough investing.

The winners have more money than they can use; the losers are broke. We have a complete failure of compassion and justice. The winners are tired of hearing about the losers. They just want the losers to shut up. Sit down and shut up. Or better yet, lay down and die.

I wonder what would happen if all the Americans who don’t have the sense to lay down and die suddenly found their voice and their anger. Probably isn’t going to happen, because society is muddled by a surfeit of misinformation, lies, and myths.

Too much blather, not enough factual information.

Speaking of blather, it’s time for me to stop writing. It is easy enough to list the problems. I wish I could suggest some surefire solutions, but I don’t have any.

To sum up: I don’t  think America needs to change direction; rather, I believe we need to restore balance.

— John Hayden

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News Flash — Jon Taplin Is Back!

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New Anarchy vs. New Fascism? — Talk About “Living in interesting times!”

Jon Taplin has returned to his blog. Please read Jon Taplin’s insights into the deepening political and economic crisis. See his posts,  “Why Now?” and  “Brave New World Redux.”  Jon Taplin is the writer who explained the ongoing disconnection and unreality in America and the Western world with his series of essays on the “Interregnum.”

Now, in his two recent essays, prompted by the riots in London, Jon Taplin suggests that a “New Anarchy” may lie ahead for the Western World.  If for every action there is a reaction, I’ll up the ante by suggesting that the New Anarchy may be an attempted revolt against a New Corporate-Fascism.

We may live to see, in the near or medium future, a great struggle between the forces of Anarchy and Fascism.  Some may believe it will be the Apocalypse.  Whether or not you believe in Apocalypse, the struggle will likely feel like an upheaval of apocalyptic proportions.

The following words are Jon Taplin’s; I took the liberty of highlighting some words in bold:

“Whatever political will the country might have had for a WPA style program —putting millions of unemployed construction workers back on the job fixing America’s third world infrastructure—now seems to have evaporated. It was perhaps our last chance to avert the Coming Anarchy. With no government infrastructure programs to put people back to work, the private sector is left  trying to create jobs for the 28 million people who are either officially unemployed, working part time but wanting full time work or “discouraged workers” who have stopped looking for a job. This of course is not going to happen—and so we are all facing the problem of a “new normal”, in which a large portion of the high school only population may never find work. Liberal pundits mourn the loss of good jobs for this cohort, but as Bernard Avishai warned in “Strategy and Business” way back in 1997, “Any job that is still simple and repetitive enough to employ a semi- or non-skilled person is going to be even more pressured by new software or by contractor-suppliers in China and Brazil.”  — from Brave New World Redux

I would have some hope for America if President Barack Obama would appoint Jon Taplin to his inner circle of advisers at the White House. Also needed at the White House, Washington Post business and economy writer Steven Pearlstein. See “Who’s to blame for this mess? Let’s start with the corporate lobby.” on page G1 of the Post, Sunday, Aug. 14, 2011.

— John Hayden

London Is Burning

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This just in from a blog in London:

Tonight, in one of the greatest cities in the world, society is ripping itself apart.

If you want to know the latest in the American-European Political-Debt Crisis of 2011, I recommend you read blogs like Penny Red.

If you want a preview of what’s coming to an American city near you, California is no longer the barometer. Look at what’s going on in London, or Dublin, or Greece, Italy, Portugal, and the entire European Union. Europe is now in worse shape than America, but maybe not for long.

Here’s an excerpt from today’s report in Penny Red:

Tonight in London, social order and the rule of law have broken down entirely. The city has been brought to a standstill; it is not safe to go out onto the streets, and where I am in Holloway, the violence is coming closer. As I write, the looting and arson attacks have spread to at least fifty different areas across the UK, including dozens in London, and communities are now turning on each other, with the Guardian reporting on rival gangs forming battle lines. It has become clear to the disenfranchised young people of Britain, who feel that they have no stake in society and nothing to lose, that they can do what they like tonight, and the police are utterly unable to stop them. That is what riots are all about.

And more from Penny Red:

 This morning, as the smoke begins to clear, those of us who can sleep will wake up to a country in chaos. We will wake up to fear, and to racism, and to condemnation on left and right, none of which will stop this happening again, as the prospect of a second stock market clash teeters terrifyingly at the bottom of the news reports. Now is the time when we make our choices. Now is the time when we decide whether to descend into hate, or to put prejudice aside and work together. Now is the time when we decide what sort of country it is that we want to live in. Follow the #riotcleanup hashtag on Twitter. And take care of one another.

I also recommend Baroque in Hackney, who can provide other pertinent links in Britain.

And today, in Wisconsin, the people are voting. I wonder if what they decide, one way or another, will be able to slow down, one iota, the spread of the chaos in the Western World.

I have to go to work now.

— John Hayden

American Debt Crisis: Many Questions About the Future of American Democracy

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The first battle of the American Debt Crisis is over. Perhaps the deciding battle will be fought in the 2012 elections.Everyone’s focused on the outcome of the presidential contest, but control of the House and Senate is at least as important.

IN 2011, NEARING THE END OF THE FIRST TERM OF PRESIDENT OBAMA, CONGRESS IS SPLIT. REPUBLICANS HOLD A MAJORITY IN THE HOUSE OF REPRESENTATIVES, AND DEMOCRATS HOLD A MAJORITY IN THE SENATE. Graph by Mattbot69 via Wikimedia Commons

Questions:

  • Is America now a three-party nation? Tea Party, Democratic Party, Republican Party? Which party, if any, will dominate the 2012 Congressional elections?
  • Will another party emerge? I’m thinking it might be called the Christian-Democratic Party. I think the Tea Party is clearly out of touch with bedrock Gospel values. The Democratic Party in America, oddly enough, more nearly reflects the Gospel message, but Democrats are so focused on being secular that they can’t connect their policies with values.
  • Exactly how real is the “Debt Crisis?” Republicans and Tea Party people have repeated “spending problem” and “debt crisis” over and over until it has become the common wisdom. But clearly, in comparison to the situation in Greece, or the European Union, or Japan, or many other countries, the U.S. financial situation if solid. The debt is not sustainable in the long run. But is it really a “crisis” in the immediate future? No. I would call it a “serious problem,” not a crisis. Common-sense problem-solving is needed, by reasonable people, in a non-crisis atmosphere. Can we do that?
  • Who are the winners and losers? I just don’t know. Except this: the core American programs of Social Security, Medicare, and Medicaid are safe for now.
  • Misinformation abounds all around. Especially this: Politicians are purposely misleading the public regarding the prospects of jobs and economic recovery. People need to know that we have entered a new reality in a global economy, and the age of American Privilege is over.

Now I have to go to work. Maybe I’ll write more thoughts about a Christian-Democratic Party later. It’s probably not what you think.

— John Hayden

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Connect The Chaos: Acedia, American Debt Crisis, Failure of Democracy

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America is not in the grip of mass hysteria. It’s more like mass acedia.

Americans are jamming the Congressional switchboards with telephone calls, as political and economic chaos draws near, but what’s the message? We have no consensus for constructive action. And surprisingly, we lack even a widely shared impulse to avoid self-destructive behavior. What we see and hear is more like a combination of teen-aged indifference and childish impatience: “Do something. Do Anything. Just stop bothering me.”

Democratic processes are failing, and we have no King Solomon, no leader with the sure wisdom to know the right thing to do in the present circumstance.   Continue reading →

Debt Madness Was Always About Killing Social Security (via roger hollander)

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Below is a commentary worth reading. Conservative ideologues have hated Social Security from the beginning, in 1934.

Social Security is not the cause of the U.S. public debt, and neither is Medicare. To blame Social Security and Medicare is to lie! The methodic run-up of defense spending, starting in 1971, and the extension of U.S. military influence to every corner of the globe over the past four decades — those are the primary causes of the U.S. public debt, in my opinion. — John

Debt Madness Was Always About Killing Social Security Published on Wednesday, July 27, 2011 by TruthDig.com   by  Robert Scheer This phony debt crisis has now passed through the looking glass into the realm where madness reigns. What should have been an uneventful moment in which lawmakers make good on the nation’s contractual obligations has instead been seized upon by Republican hypocrites as a moment to settle ideological scores that have nothing to do with the debt. Hypocrites, because their rad … Read More

via roger hollander

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America: What I Believe In 2011

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Image via Wikimedia Commons

(Please click on “comments” at the left side of the title for an interesting back-and-forth between polar opposite points of view.)

The deadlock over raising the debt limit seems almost like a clash of religious beliefs. The two sides hold different beliefs. The deadlock has helped clarify my thinking about what I believe. Maybe this debt crisis of 2011 will help us all clarify who we are, and what we believe.

Image via Wikimedia CommonsI believe that Social Security, Medicare, and Medicaid are the best part of America. I believe that without Social Security, Medicare, and Medicaid, a large part of the American population — more than half the people over 65 — would fall into hopeless poverty.

Some people believe it would be impossible to balance the American budget without deep cuts in Social Security, Medicare, and Medicaid. I believe that America is still, right now, the most prosperous society the world has ever known. I believe that America can afford Social Security, Medicare, and Medicaid.

I believe it would be fair for the most prosperous among us — those with incomes of $250,000 or more a year — to pay a little more in taxes for the good of America. These people have prospered in America. They live the good life. Aren’t they patriotic enough to want to keep America strong? I believe they ARE patriotic and willing to help. It is inconceivable that they could be otherwise.

Some politicians say they oppose any tax increase because a tax increase would “destroy jobs.”

I don’t believe it. How would a modest tax increase destroy jobs? The president is not talking about making rich people poor. He’s talking about a modest tax increase on incomes over $250,000. How exactly will that destroy jobs? Will people earning $250,000 or more even notice a small tax increase? Will a small tax increase change their way of life? I don’t think so. Some may believe otherwise.

I believe there are other ways to balance the American budget. I believe we are spending far too much on a worldwide military presence. I believe we do not have to be fighting foreign wars in Iraq, Afghanistan and Libya. I believe we could drastically reduce foreign military spending, pull American soldiers out of harm’s way and closer to the North American continent. We could reduce defense spending by perhaps a third, and still have a military that is by far strong enough to defend the North American continent.

I simply cannot understand why anyone would want to destroy Social Security, Medicare and Medicaid. I believe the vast majority of Americans support these programs. I believe that common-sense cuts in general government spending and defense spending, combined with a small increase in taxes on the most fortunate among us, would bring the American budget into balance.

What do you believe?

THIS CHART PUTS THE FINANCIAL CONDITION OF MEDICARE AND SOCIAL SECURITY IN PERSPECTIVE. BEGGING THE QUESTION: IF MODEST CUTS WERE MADE IN U.S. SPENDING ON GENERAL GOVERNMENT AND DEFENSE, AND SOME EFFICIENCIES ARE FOUND IN MEDICARE AND SOCIAL SECURITY, THEN HOW MUCH WOULD STILL NEED TO BE RAISED IN TAXES? Chart via Wikipedia

Keep the faith.

— John Hayden

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Wildcat Debt Strike in Autumn of 2011

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At rock bottom, the interlocking political and financial structures of the U.S. are based on trust. Recently, a string of financial failures has shaken the credibility of the U.S. political-financial-industrial complex, resulting in a rapidly spreading failure of trust.

PRESIDENT BARACK OBAMA, Wikimedia Commons photo

Trust is frayed to the point where, at the end of this week, Speaker John Boehner severed negotiations with President Barack Obama on raising the U.S. debt ceiling and averting financial crisis. At this point, you really couldn’t call the Tea Party a party of “loyal opposition.”

Question:  What do you think will happen when the government is forced, starting August 2, to choose which bills to pay and which bills to default on — which promises to keep and which promises to break?

Answer:  I wouldn’t be surprised if a Wildcat Debt Strike sweeps across the U.S. like a prairie fire in the fall.

Consider the events that brought us to this convergence:

SPEAKER JOHN BOEHNER, Wikimedia Commons photo

  • Strike One — The financial bubble burst, and Wall Street persuaded the pillars of the U.S. government — the Treasury Department, the President, the Congress — that the world economy would collapse without a sudden government bailout. (Presidential candidates of both parties endorsed the bailout in 2008.) Wall Street extorted billions under TARP, but continued to pay bonuses as usual to Wall Street executives.  In 2009, billions more were spent in a giant stimulus package, propping up the profits and cash reserves of corporations and the compensation packages for CEOs.
  • Strike Two — The real estate bubble burst, and banks throughout the U.S. foreclosed on mortgages, further driving down the value of houses. As people found their mortgages underwater (that is, the mortgage is worth more than the house), they considered whether or not to continue making the monthly payment. Some homeowners lost jobs and were unable to pay; some calculated that it made no sense to throw good money after a bad house. It is now widely accepted that people can and will walk away from a mortgage.  Banks are not willing to modify impossible mortgages, and debtors are not willing to pay impossible mortgages.
  • Strike Three — The debt bubble bursts. That comes in August, if the U.S. government decides not to pay its bills, especially its obligations to individual American citizens.

It’s all reciprocal, isn’t it? I’ll play fair with you as long as you play fair with me. As long as my house has value, I’ll continue to pay my mortgage. As long as you pay me, I’ll pay my debts.

Everything depends on our belief in the myths that George Washington will own up to cutting down the cherry tree; and that Abe Lincoln will walk six miles to return a penny.

The entire system could come undone in a cascade of individual decisions to hoard cash and ignore debts. When the government refuses to pay someone — whether it be a Social Security beneficiary, a veteran, a bureaucrat, a soldier, or a Medicare bill to a hospital — that someone will in turn refuse to pay an obligation.

The autumn of 2011 might deteriorate into a general Wildcat Debt  Strike, with individuals following the government into spontaneous default on taxes, mortgages, car payments, and most of all, credit card bills.

— John Hayden

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American Debt Crisis: The Black Swan Is Circling Washington

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Another update on the Debt Crisis of 2011.

An ominous Black Swan is circling Washington, D.C., like a vulture, watching and waiting as the wise men and women of Congress argue over whether to resolve the Debt Crisis of 2011. Or not.

This is the most dangerous situation in Washington since the Cuban Missile Crisis of 1962. I was in Washington on the weekend of the Cuban Missile Crisis, and I remember it well. We didn’t know how close we came to the brink, until it was all over.

This Debt Crisis is surreal. The Cuban Missile Crisis was loaded with live ammunition. The Debt Crisis is loaded with stocks and bonds and hundred-dollar bills. No one knows what will happen if we pile up a lot of stocks and bonds and bills, and set off an uncontrollable chain reaction of unpaid debt. Never been done before. But we are about to go there.

There are three major schools of thought regarding the resolution of this debt crisis. You have your big fix, valued at around $4 trillions, and your little fix, $1.5 trillions to $2 trillions, give or take. (Or is it billions? I can never remember.)

And defying all logic, there is the “no fix” option, supported by the gentlemen and gentleladies from the Tea Party. (What kind of tea are they smoking at that party? Can I get some?)

Translation: Some folks want to fix the debt crisis for the long-term, so Congress can get on to other business.  Some folks will settle for a short-term solution. And some want to commit economic suicide on Aug. 2, rather than risk the chance of possibly serious complications down the road.

Hoo-boy! You think the rich and powerful are anxious about a little economic uncertainty? How are they going to respond to total economic chaos?

Remember the Black Swan? It’s a highly improbable disaster, resulting in unpredictable consequences of a catastrophic nature.  Have a nice weekend.

— John Hayden

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