by Len Hart, The Existentialist Cowboy
Bailouts for Wall Street insiders are a complete waste of $trillions$. It was Ronald Reagan whose policies began the process by which American jobs --the very source of American wealth --were exported 'offshore' to China, Japan, India, Viet Nam, et al. US robber baron elites are lying and/or wrong about the source of this nation's wealth. Every economist of significance --right or left --has said that 'labor' is the source of 'value'.
It was the Reagan's tax cut of 1982 that began the dissolution of the US economy. Since that time an increasingly tiny elite has gotten exponentially richer. I am no coincidence theorist. This was by design.
It must be pointed out that following the tax cut, the nation plunged into recession, the worst since Herbert Hoover's Great Depression of 1929. 'Tax cuts' benefiting only the upper classes remove monies from circulation, monies that might be spent, monies that might have prevented a recession or cut short those already begun. Unfair, inequitable tax cuts create what economists call a 'contraction' of the money supply. A more familiar word is 'depression'.
It must also be pointed out that there was 'no Reagan recovery'! The record shows that between 1979 and 1989 the growth rate was 3% --the same as the growth rate between 1973 and 1979! There was, then, no improvement with "voodoo economics" than without it. There was no "Reagan recovery"! Wealth did not trickle down; it flowed upward at alarming rates.
The nation had been plunged unnecessarily into recession upon a pack of lies. The only beneficiaries were those who were rich already. At the end of his disastrous misrule, the economy had barely gotten back to where it had been before Reagan screwed it up. That's not 'recovery'; it's theft!
Wages have been stagnant since 1982. Prices, however, have inevitably risen and only the 'elites' have benefited. Result: you are much, much poorer in terms of what your money will buy. I would direct you to the Bureau of Labor Statistics, the Department of Commerce - BEA, the Census Bureau. It's all there in black and white.
The unkindest cut of all is the Faustian deal Nixon cut with China. China --thanks to Reagan/Bush axis of treason and betrayal --has the world's largest POSITIVE account balance --the result of deals cut by the GOP, deals which have resulted in China dumping its crap on the US via Wal-Mart. As a result of those deals, the US sustains, by far, the world's largest NEGATIVE current account balance of $ -568,800,000,000. [See: CIA: The World Factbook] The famous trip and the deal had been set up earlier by Bush Sr with what St. Thomas More would have called a 'conspiracy of rich men seeking to procure their commodities under the name and title of the commonwealth'.
Every economist of significance --right or left --has said that 'labor' is the source of 'value' and thus a nation's 'wealth'. This outcome was inevitable. The GOP regimes of Reagan, Bush, and Bush Jr presided over the export of US jobs to China, Japan, India, Viet Nam. Who benefited? Quick response: only one percent of the total population, the GOP base of elitist robber barons.
Not content to export American jobs, these 'robber barons' have demanded and received whopping bailouts which they've likewise exported to offshore tax havens. The end result of this 'contraction' of the money supply may very well make the 'Great Depression' look like a Sunday outing. In the thirties, the US still had a steel industry, an automotive industry, appliances, et al. What can the US fall back on today that China has not already pre-empted? Not even the oil industry will save us. The fact that the US attacked and invaded Iraq for its oil is proof of that.
Wages have been stagnant since 1982. I cited the Bureau of Labor Statistics, the Department of Commerce - BEA, the Census Bureau. It's all there in black and white. Following the Reagan tax cuts of 1982, every one not in the upper quintile lost ground.
Reagan did not perform nearly so well as Jimmy Carter, who is, in fact, among the nation's best 'performing' Presidents in terms of the growth of GDP and jobs. Everything said by the right wing about Carter is a bald face lie! Carter ranks number two on the list of best Presidents since World War II.
From that same list, the top five are Democrats. The bottom three are goppers [politely, Republicans!!].
Very early, the upper twenty percent outstripped every other segment. Now even the poorest of the rich are in danger of falling off the ladder: only one percent of the population owns more than the rest of us combined. This has been a deliberate transfer of wealth, a deliberate assault upon the economic foundation of 'value', a subversion of the US by the very richest of right wingers. A crime of this magnitude is not merely the biggest heist in history, as I have called it, it borders on high treason. Certainly --this crisis undermines national security, exposes weaknesses to enemies.
The 'bailouts' are premised on 'trickle down theory', a crazy right wing idea that only the investor class creates wealth and that's why they need money. This is just crazy. The source of a nation's wealth is the work that is done. Elites do not work and do not create wealth! Most of these 'elites' should be rounded up and thrown in jail for various and numerous frauds. They should never, ever be bailed out!
At the height of the Great Depression, economist John Maynard Keynes said that the government might get better results if, instead of 'bailing out' the big wigs and fat cats, it just put "pound notes' in mason jars, bury them in a landfill and let people dig them up. Clearly --money in the hands of those who will SPEND their money will stimulate the economy. Fat cats squirrelling away bailouts in offshore tax havens will not!.
Lately, it has become fashionable to say that debt is money! That's stupid on its face. Debt may represent 'leverage' but not 'value' and most certainly not 'money'. Debt is nothing more than a promise to pay with something of 'real' value at some point in time.
Paper money was --at one time --backed up by gold. Gold had intrinsic value as a metal of not inconsiderable practical applications. A 'practical application' is, ultimately the product of work or 'labor'. Almost every major economist from Adam Smith (the godfather of capitalism) to Karl Marx (the godfather of socialism) are in agreement: the source of value in an economy is 'labor'.
A simple illustration may make the point. If I own land, I may wish to dig a ditch in order to irrigate my crops. I can either dig the ditch myself or, if I should have 'capital', I may wish to hire the ditch dug for me while I manage the enterprise. In any case, the work that is done is of 'value' to me and, presumably, my enterprise is more valuable for my having done it.
Young, arrogant hotshots came to believe --like Gordan Gecko --that all one needed to do to get rich was just move money around. This 'class' leeches off the labors of others who had, in simpler times, made the factories run.
A balance sheet disproves the bogus theory that 'debt' is 'money'. A 'balance sheet' is composed of three parts: assets, liabilities, net worth. It's a simple equation: net worth is equal to total assets minus liabilities. If 'debt' were 'wealth', you would have to add 'liabilities' --not subtract them! Adding liabilities would give one a grossly inflated value of the enterprise. Making money would be easy: just take out another loan! Perhaps an absurd perversion of this most elementary accounting principle accounts for the sorry state of US business and GOP dominated government.
One is reminded of Enron and lesser known crooks cooking the books, scamming customers, putting the screws to California. An investigation to discover the cause of the imbalance is imperative. The entire point of the 'accounting equation' is to arrive at a figure for 'net worth'. If 'debt' were money, the 'net worth' of individuals, corporations, sole proprietorships would be figured differently. A mentality that equates the ability to take on more debt with REAL money is what got us into this mess to begin with.Addendum: No! Democrats are NOT just as bad!
The following stats are just a sample of the numerous, seemingly endless instances in which the GOP has been dead wrong and the Democratic party has been absolutely correct. Let's take a look at the history before it gets re-written:
- Any Democratic President has presided over greater economic growth and job creation than any Republican President since World War II.
- When Bush Jr took office, job creation was worst under a Republican, Bush Sr, at 0.6% per year and best under a Democrat, Johnson, at 3.8% per year.
- Economic growth under President Carter was far greater than under Reagan or Bush Sr. In fact, economic growth in general was greater under Johnson, Kennedy, Carter, and Clinton than under Reagan or Bush. Democrats always outperform a failed party: the GOP!
- The job creation rate under Clinton was 2.4% significantly higher than Ronald Reagan's 2.1% per year.
- The "top performing Presidents" by this standard, in order from best down, were Johnson, Carter, Clinton, and Kennedy. The "worst" (in descending order) were Nixon, Reagan, Bush.
- Half of jobs created under Reagan were in the public sector --some 2 million jobs added to the Federal Bureaucracy. Hadn't he promised to reduce that bureaucracy?
- Reagan, though promising to reduce government and spending, tripled the national debt and left huge deficits to his successor. Bush Jr's record will be even worse.
- By contrast, most of the jobs created on Clinton's watch were in the private sector.
- Put another way: any Democratic President beats any Republican President since World War II.