1 Boring Old Man

These are the Bush Years as seen by the American Workers. But you know that from the evening news. The Statistics come out monthly, and are usually accompanied by a blip in the Dow Jones Average. These days, the blips are downward blips as the Market catches up with what we all know – hard times are upon us.

Short-term news isn’t going to be good for a while, even though we’ll all look at these parameters as if they are indexes of our level of hope during the coming year. Truth is, that’s exactly what they are, even though sometimes they lie in a positive direction. For example, we’ve had an artificial feeling of security from this graph until it turned on us recently. What we learned was that the Dow Jones Index was a only a paper moon, hanging over a cardboard sea – makebelieve – a series of financial bubbles that were backed up not by increasing value but by speculators playing with the Stock Market like it was a game of monopoly. What looked and felt like prosperity was really an artificially inflated market being "mined" by Wall Street – principally benefitting the wealthy who were invested in Hedge Funds that were pulling their profits from the spaces in our illusionary Markets rather than the actual value of the Securities and Commodities being traded. That’s the part of this financial crisis that hasn’t yet sunk into people’s mind yet. Our Markets have been looted and falsely inflated on purpose. All of that money that we are bailing out went somewhere.

We’re horrified that one of the financial wizards, Bernard Madoff, was not really a wizard at all and bilko’d a bunch of wealthy people, retirement funds, and charities out of billions. Yet it hasn’t occurred to us that there are a ton of wizards who bilko’d our markets of billions of dollars that left our economy and landed in the hands of wealthy fund managers, wealthy people, retirement funds, and charities – and we’re paying for it.

Where are we to look for hope? We all feel like Madoff’s Clients. We thought we were doing fine, and it was an illusion. The whole thing was something of a Ponzi Scheme. Well, for a while, the graphs won’t lie. They’ll tell us the truth and it will continue to be grim, like today’s news about unemployment. Below is a graph of unemployment going back a half a century. The vertical gray bands are Recessions. Look at the 1980-1983 period. That was a bad one [unemployment is the key figure to look at to measure economic health/sickness]. It was a big factor in Carter’s defeat in 1980, but just electing Reagan didn’t fix things [I’ve included my oft-reproduced graph of the National Debt – normalized to the Gross Domestic Product]. Unemployment soared for several years. How did Reagan react? He was something of an F.D.R. himself. He cut taxes and started spending like a teenager in the Mall with a credit card. And it worked. The problem was that he didn’t stop [spending], nor did George H. W. Bush. It’s hard to actually assess what happened after that, because we entered a period where these parameters were increasingly affected by deregulation, financial bubbles, and Greenspan’s manipulations – so it’s difficult to tease out what was growth and what was an illusion.

Our problem today seems much more complex than we’ve seen in recent years or recent recessions. But, for the moment, it’s a generic problem. No matter what the cause, when a Capitalistic Socety freezes up like ours has, the only right thing to do is to jump start the economy in order to prevent a deflationary spiral like we saw in the early 1930’s. So, Obama is going to hit it with a massive economic stimulus plan. That’s just what one does when this happens.

Obama’s speech indicated to me that he’s learned from their mistakes. His broad spending plan is directed towards more than the short term problem. He’s planning to use this period to rebuild our failing infrastructure, shore up the State Governments, and invest in new future technologies that will change our energy costs and foreign dependence. He talked about "paying back" instead of acting as if we didn’t have to do that. He also talked about Re-regulating our financial markets, probably the most important part of his program. There is no reason in the world, particularly right now, to allow the Casino like speculation to continue. This crisis was "caused" by Wall Street – "caused." The alternative to the kind of Capitalism that we’ve allowed to flourish is not Communism; it’s not Socialism; it’s not Fascism. It’s responsible Capitalism. We had that, and what I call the Reagan Dynasty [Reagan, Greenspan, Bush I, Bush II, and Cheney] destroyed it, on purpose.