Posted inPolitics: National

Screwed 3.0

Now we enter the next phase of the Great Disruption, where political dysfunction meets unsustainability. The Greek debt crisis is helping prepare the way for American panic about the federal deficit and national debt. These two maladies are a cause célèbre for the Tea Party. The supposedly left-wing media are on board. USA Today headline: "Nation's soaring debt calls for painful choices." Tom Friedman of the New York Times: "After 65 years in which politics in the West was, mostly, about giving
things away to voters, it’s now going to be, mostly, about taking things
away. Goodbye Tooth Fairy politics, hello Root Canal politics." Isn't he cute? I can't wait for the idiot David Brooks to weigh in. (He's already written about how "as
government grew, the anti-government right mobilized. This produced the
Tea Party Movement — a characteristically raw but authentically American
revolt led by members of the yeoman enterprising class…As government became more threatening…" Funny, he means the Obama administration, not the Bush wars, shredding of civil liberties and crony capitalism leading to trillions in federal bailouts, i.e., government growing.) You see, we're just like Greece — a profligate nation that needs to tighten its belt, cut government.

The reality, of course, is very different. Whatever his failings, Bill Clinton showed that seemingly intractable red ink could be turned into surpluses. The present deficit and debt is almost entirely a creation of the Bush tax cuts, the Bush wars and the Bush bailout of Wall Street (for which Sen. Obama voted). The fiscal situation was made more severe by the worst recession since the Great Depression. It's as if FDR fought World War II twice as long, cut rather than raised taxes, and did all this in the worst part of the Depression while using federal money for the banksters rather than the people. It's a wonder the deficit is so low as a percentage of GDP. It is not a cause for hysteria.

But, ah, dear reader, it will be used. "You never want to let a serious crisis to go to waste," said White House tough guy Rahm Emanuel, who is letting the real crises of the Great Disruption do just that. The extreme white-right — the idiot David Brooks' "yeoman enterprising class" — and the plutocracy will use the "crisis" of federal spending to their own ends. And if the effectiveness of their party as the minority in Congress is any indication, wait until they take the House this year from a feckless Democratic Party. And then the Senate and White House. Prepare for Screwed 3.0

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Losing altitude in America

Two pilots and two crews. Two aircraft in mortal danger. Fate is not always the hunter.

As almost everyone knows, Capt. Chesley "Sully" Sullenberger was the pilot of US Airways flight 1549, which last January suffered a bird strike just after leaving LaGuardia Airport that rendered both engines inoperable. Sullenberger performed the remarkable water landing on the Hudson, in the heart of New York, saving all 150 passengers.

Less remembered is a commuter flight from New York City that crashed near its destination of Buffalo the next month, killing 49 aboard and one on the ground. And herein lies yet another tragic, disturbing story about two Americas.

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Steering the right course on the auto bailout

General Motors is running out of cash. Think about that. What was once the company that embodied American strength is running out of cash. Little wonder that Detroit is angling to get its own "rescue package" from Washington. We should do it — with serious strings attached.

Anyone who has lived in the Midwest can attest to the foundational nature of the auto industry to American manufacturing. It's not just the Big Three themselves, but the vast supply chain they have spawned, from steelmakers to precision machine tool companies to providers of all manner of parts. As we bail out a "financial services industry" that increasingly made little more than frauds and swindles, the auto industry, even heavily diminished from its former greatness, makes real products and is an essential prop of the middle class, particularly in the heartland. A hollowed-out economy can stand no more losses.

Yet the American industry is the author of many of its own problems. The decline of GM and its sisters began decades ago in an unholy alliance of complacency, greed and contempt for customers between management and labor leaders. Despite 20 years of plant closings and pledges of new days, the carmakers never really reformed. There's one exception: hundreds of thousands of union workers in the Big Three and parts makers lost their jobs — and communities their livelihood. Contrary to a persistent mythology, the decline since the early 1990s has been almost entirely the fault of management, not the United Auto Workers.

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Stagflation may be the least of our worries

Stagflation is the worry of the moment. Talk about a ’70s flashback. The term refers to the combination of high inflation, high unemployment and weak growth — trends that weren’t supposed to go together. As Robert Samuelson has pointed out, the current troubles likely won’t be a repeat of the disco age, unless the Fed overreacts. Recessions are natural economic phenomena and sometimes trying to avoid them can make the eventual reckoning worse.

But we shouldn’t stop thinking there. As long as the popular conversation is on stagflation and the 1970s, it’s a chance to follow those themes to some provocative and disturbing questions.

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Wishful-thinking stimulus

There’s a great deal of silliness and sophistry about the economy at this dangerous moment, but why should it be different from anything else in American life?

Washington debates a “stimulus” package of tax cuts and newspapers write headlines to tell “average readers” (whatever the hell that means) that the feds will put hundreds of dollars in their pockets. Wall Street does a dead-cat bounce and commentators who were darkly warning of recession are now talking about a miraculous comeback. In the New York Times, the normally sensible David Leonhardt was saddled with a headline that emblemized the silliness: “Worries That the Good Times Were Mostly a Mirage.”

In reality, the economy risks finally tipping over from a series of imbalances and forces long in the making. The Fed is very limited in its ability to right the ship. And any “stimulus” risks making things worse, aside from extending unemployment benefits, which is somehow anathema to “conservatives.”

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