For those of you who don’t know Dan Middleton, you’re in for a treat.
Dan and I have been friends since 1983, when we both lived in the Rinconada dorm at Stanford.
Our friendship was one of the most important parts of my college experience, and what he has brought to my life has only deepened in the following decades.
In the past few years, it has been heavy doses of political knowledge and insight.
As you’ll soon see, Dan is a voracious consumer of news and a thoughtful analyst of the questions of the day.
He tilts generally toward the left, but not in a dogmatic way.
And, fortunately, he’s started to share with the rest of us.
Starting a couple of weeks ago, Dan has begun sending out to a group of family and friends his reflections on things political.
Yesterday, he gave permission to me to bring these posts to our community, with the understanding that he may not do so every day.
I am confident you’ll enjoy his writing as much as I do.
As always, comments, critiques and suggestions are welcome.
I’m happy to bring other folks into the space on a regular basis, too. Heck, we can even rename the blog.
In the meantime, here’s Dan’s initial post.
As I expected, the jobs report today showed no growth at all, and the unemployment rate remains unchanged. The U.S. recovery has stalled, and threatens to revert back into a recessed state. Growth in the Eurozone, most notably Germany and France, is actually below 0%, whereas the U.S. is struggling along at 1.5%. Japan is also stagnant, and the United Kingdom is having worsening problems left over from the burst of their housing bubble. In short, the world economy needs consumers to consume. But they won’t or can’t because of unemployment, accumulated debt (particularly for those who are stuck in houses worth less than what they were bought for), or the uncertainty that they may lose a job.
Making matters worse, regardless of how much cash corporations have on hand, and in the U.S. their reserves are considerable, they won’t hire if demand for their goods or services is low. And in the U.S.,workers don’t have wage leverage with corporations and indeed must make do with either stagnant or even lessening wages. Though tax rates are low, and the average American family has had an extra 1000-2000 a year to spend via the extension of the Bush tax cuts and a payroll tax cut, that cash is not enough to boost demand, when gas and food prices are higher.
So what to do? Congress must act immediately and pass another package of considerable stimulative measures. The first 900 billion stimulus was generally successful, though to get it passed by three votes (and only two Republicans) in the Senate it had to be too heavy on tax cuts. Jared Bernstein is an economist I enjoy reading. About the first stimulus he wrote: http://jaredbernsteinblog.com/the-recovery-act-worked-in-a-few-easy-charts/. His last point about the importance of next week’s economic speech by the President is bracing.
Sadly, the GOP/party of Rush Limbaugh, (who said yesterday that the president needed “to be put back in his place”…hmmm, I wonder what that could mean?), will do anything to hurt the economy in order to get back the White House. This includes disruption on a large scale like threatening to shut down the government, or refusing to raise the debt ceiling, or on a smaller scale, but no less harmful: http://www.washingtonmonthly.com/political-animal/2011_09/a_looming_transportation_deadl031944.php.
The plain fact is that the GOP can’t run an economy, even if they were trying, because all they care about are tax cuts favoring the better off and corporate friendly deregulation: http://www.washingtonmonthly.com/political-animal/2011_09/gop_leaders_stop_taking_credit031960.php. And in the George W. Bush era, they spent with abandon without paying for much of it (like someone brazenly putting their credit card bills in the trash.) At least President Obama puts all spending on the books. That the GOP/Fox machine now screams, “Debt, debt,debt!! He is bankrupting the nation!” is of course, laughable.
So we need two things. Effective stimulus and further efforts to stabilize the housing market post bubble. The economic damage from that bubble burst was global, and severe. Far more severe than economists predicted. Will the GOP be helpful? No. Because remember, all proposals from the White House must start as legislation written in the House of Representatives. You know, the place run by a guy named Boehner who takes his orders from Fox “News”, and the mostly Southern evangelicals, and a racist radio personality.
It gotten so bad that even a good thing http://www.guardian.co.uk/business/2011/sep/02/us-authorities-sue-banks-subprime will likely be subverted by this kind of behavior: http://www.washingtonpost.com/opinions/the-senate-refuses-to-consider-obama-nominees/2011/09/01/gIQA2AkJvJ_story.html.
So, a grim day. My hope is that the electorate will lose even more patience with the GOP and fear/reject the “let’s shred the social safety net” rhetoric being gleefully spouted by their candidates for the Presidency.
I send out theses missives putting in my 2 cents, but I certainly hope the links are read, because they are full of info/graphs I could never have the time or effort to write.
Also, the WPA or CCC were fascinating, often successful programs (thanks FDR and Francis Perkins), but how to do that kind of work in a post-industrial, technology driven world (so different than 1935, when 1/2 the country had no electricity)? That’s the quandary. Fixing existing infrastructure is a good place to start, and I expect the President to emphasize that in his speech.
Something that President Obama said recently was true but sobering, and I paraphrase: “I was recently at an auto assembly plant, and I was struck at the cleanliness and quiet on the factory floor. Why? Because what was once the work of 1500 was now accomplished by 200, using high tech, computerized machinery…so we have to accept that is the world we live in and adapt, educating our workforce to be more technically skilled…and ultimately, we must use our wealth and technological prowess to create entirely new industries…”.
Such an outlook is practical and true and will build wealth not in boom and bust cycles like 1996-2008, but relatively steady growth like 1945-1974. However, this requires funding (which a GOP House won’t grant) and patience (which a shell-shocked public and a gossipy, lazy media may not grant, either).
I was amazed that in the last quarter of President Bush’s final term when the housing bubble burst, negative growth has recently been revised downward from around –4% to an extraordinary –8.9%.
That is like flying an already sputtering, stalling single seater and suddenly dipping and plowing its belly along the ground with parts flying off in every direction. The pilot survived, but repairs will take a long time. I hope the pilot will give his mechanic the time and forbearance to allow him to keep trying to fix the plane, because that other mechanic from Texas named Perry says he knows how to do the job more quickly and cheaply…with a few hefty swings of a sledgehammer.