Stimulus…Shimgulus!

The reason for our economic collapse is the 30+ year war on labor; i.e., “low wages”.

Nobody has any money to spend. It’s that simple.

The so-called “stimulus package” does little, if anything, to change this dynamic. Unless it were to create millions and millions of “good paying” jobs with benefits, nothing will change. And it doesn’t.

I keep wondering why nobody asks the obvious question when they claim it will create “millions of new jobs”. Are these jobs going to be “good paying” jobs??? Because even millions of new minimum wage jobs won’t do shit. That’s the problem in the first place.

UNDERemployment is the problem, not UNemployment.

We need to reverse traitorous trade deals, re implement protective tariffs like every other sane industrialized nation does, and force manufacturing back into this country, along with pro-labor laws again.

Want to “stimulate” the economy? Triple the minimum wage and you’ll see the economy take off like a rocket. It’s better to have a nation of people who can afford to pay for slightly higher priced goods and services, than one of people who can’t afford the cheap stuff.

Of course, it’s little surprise that our Washington representatives, and Nobel Prize winning economists don’t get it. They all live in a bubble world of wealth and prosperity. The bad economy is little more than statistics to them. They have no sense about what’s really going on on Main Street because they’re all doing just fine, thank you very much.

I’m not sure which economists you’re referring to but if you read what they’re saying in the link I provided, you’ll find they do indeed get it and have called for major jobs-creating efforts beyond anything enacted so far. See especially, James Galbraith’s article, No Return to Normal.

Obama’s advisers understand the economists’ arguments, and the fact that they wrote a speech for Obama that ignores them is not encouraging.

I don’t think they understand the arguments and if they do they don’t like Them Helicopter Ben seemed to think that by providing banks enough cash he could have prevented the Great Depression.
And also what FDR did to get us out of the Great Depression.
Here is our problem Helicopter Ben is wrong, Obama’s advisors are wrong but they are spending Obama’s political capital on this crap.
The GOP has no Cred on this issue whats so ever they can’t even create a group of Brown Shirt Tea Baggers bigger than the Immigration Rights Movement. Still If Obama fails they will want tax cuts.
I say lets end two wars and use the savings to save America.

Again, “UNemployment” is not the major problem, and creating more low paying jobs won’t do anything.

All this talk of “creating jobs” means nothing unless these jobs are “good paying” jobs. I don’t see that being talked about.

“UNDERemployment”, i.e., low wages, are the problem. The only solutions that will do anything to even slow down our ever-accelerating collapse, let alone turn things around, would be revising trade laws so that the products American’s consume are not manufactured in low wage (or slave wage) countries, but here in our own country like they used to be.

And I was referring to Krugman. Isn’t he the “Nobel Prize Winning Economist” everyone quotes these days? Is he pushing for a major revision of trade laws, or just spending more tax payer dollars in a mostly worthless “stimulus” package.

I suspect too many of the advisors don’t know anyone who is struggling. everyone they know is well-paid, and can afford a place to live, food, clothing, a good car … and probably private schools for their kids.
None of them are, as a couple of my friends, stuck with a house that has a market value about 30 percent less than the mortgages on it (they refinanced when prices were high), and the days of the good jobs that initially paid for that house are long gone. (The recovery plan won’t help them, because the @#$%^&*(s in Congress killed cram-down.)

If we are right about this Obama will have to change direction or crash. He could change our way more better Stimulus and end 2 wars or he could go the GOP way tax cuts.
Any attempt to merge the two plans will draw fire from both sides if the plan fails. The Left and the GOP will not share the blame instead the come together compromise will likely start a Civil War.
Which the GOP seems to want since they can’t get power at the voting booth with 20%ers. Notice the GOp is not even trying to reach other voters they need Obama to fail and even then they need to start a fight to separate.
I wonder what Blackwater has been up to recently?

Go talk to people whose jobs have disappeared.
There aren’t that many jobs out there now; many companies aren’t hiring, not even temp/contract workers.
UNEMPLOYMENT, not ‘underemployment’.

Oh Boy…If you hate Sean Hannity, then you need to see this guy showing that he is an absolute idiot when it comes to economics.

Must watch.

http://progressnotcongress.org/?p=2090

I think you are both right.

The reason for our economic collapse is the 30+ year war on labor; i.e., “low wages”.

Nobody has any money to spend. It’s that simple.

so good, it had to be repeated

We need to get a list of replacements ready for Summers, Geithner and Helicopter Ben. If Obama is smart they will resign and he can blame them and move in a new direction. Unemployment at 15% even with the Labor Dept funny numbers will make this necessary expect the GOP to lead the charge in time for the election.
Of course they will want more tax cuts but that should go over with the public like a brick.
Their pool guys will notice attacking Obama’s economic team will get traction with the public.

could it have anything to do with:

The number one industry supporting the Obama presidential bid, by the start of February, — the crucial time in primary season — according to the widely respected, nonpartisan Center for Responsive Politics, was “lawyers/law firms” (most on Wall Street’s payroll), giving a total of $11,246,596. 

but as president he is rewarding the Wall Street scum who crashed the economy with trillions!

pretty good ROE!

Obama still has outstanding promises for tax cuts to the middle class. He can use them at will and create additional “incentive” without using the name. Goopers can’t fight tax cuts.

All I know is I have gone long on Rice & Beans and the garden is ready for next year. This is easy,GS owns the govt and I hope all of us get out of this with less pain than SA saw during late 60s to early 8os,the uncle milton freidman experiment has come home. Sad
jo6pac
Everything is on schedule, please move along.

Easy there, sporkovat, I’m one of the lawyers who gave money to Obama, and even volunteered for duty in the election in Athens, Ohio, along with over 100 other lawyers and paralegals from around the country.

I feel such despair at times as I see red flags screaming up to attention with this new-improved!! administration.
The best and the brightest will NOT prevail. Except maybe on healthcare if we can get people to WAKE UP and make a noise. Maybe….
So, do they have a Plan B ? What does Krugman et al propose for the new American Order?
Wait, I know…we’re all one healthy kidney away from bankruptcy, right? Personally, I’m screwed on the financial plan for organs but I have healthy young adult children. They may have a future selling non-vital body parts. We have insurance so they’re certifiably healthy.
OT, they both had an opportunity to go to europe and had to turn it down for fear of losing their frigging Restaurant Jobs!!!!! What’s happening that young people can’t quit a restaurant job to travel in summer.It’s unAmerican!!!
They know there’ll be no jobs when they get home.

Obama has bet his political future and our economic future on a team of nitwits. Obama was signaling last week that he was going to take a wait and see attitude on the stimulus. I don’t see him moving toward a second stimulus installment until October if then. The sheer idiocy of his thinking that he or we have months to wait and see is really breathtaking. We all say that this is the worst financial crisis since the Great Depression but the Administration isn’t acting like it is. Well, I should take that back. Behind the scenes it has stoked the broken financial system with nearly $7 trillion so far. So it has taken massive action. Unfortunately, all that money was essentially wasted. We need smart policy and money. Money alone, as we have seen, does nothing. It does show though that all of this talk about how a big stimulus might produce too much debt for us is a lie. We could run trillion dollar plus stimuli for several years and still not come up to what the Bush and Obama Administrations have blown in the last 10 months.

Tax cuts to the middle class at this point would have little stimulative effect on the economy. They would either be saved or used to pay down debt. Both are worthy acts in other times, but their stimulative effect is zero.

Re unemployment and underemployment, we tend to focus on unemployment and loss of jobs but we are seeing a lot of underemployment and wage cuts. These are also a major concern because it means less disposable income for even those working and so a negative stimulative effect on the economy.

With all due respect, you completely missed my point.

“UNemployment” is obviously a part of “UNDERemployment”.

Yes, UNemployment is an issue as well, but what I’m saying is that if we theoretically had full employment, if these jobs were mostly minimum wage, then we’d still be in this situation. Thus, UNemployment is not the issue, but rather UNDERemployment.

When you talk about UNemployment figures, there’s this assumption that if you’re not in this group, you’re thus employed, and which results in the further assumption that you must be doing okay. But that’s NOT the case today. Many who are employed, even working two or three jobs, aren’t making it.

Thus, UNDERemployment IS THE PROBLEM, not UNemployment.

I realize this is a difficult thing for many to understand, but once you get it, you’ll then understand what I was saying.

And repeated it needs to be, since few seem to understand this, especially our leaders who are making the decisions.

If this were France millions would be on the streets demanding real change and not just give aways to rich elites. Obams will use his appealing and soothing rhetoric to calm the rage that is building in the masses.

If Obama doesn’t wake up very soon and smell the coffee it might be time to start thinking about a primary challenge.

I don’t think it’s idiocy. I think the Powers that be are controlling the program. Same as it always was.
Pick your pony and focus on it’s race chart. It’s a done deal.
Or if not, a tragedy in the making.
Crap, I’m dark today. I’m sorry.
I hate when I feel betrayed!!

It’s idiocy because whether Obama sold out or is a true believer in this garbage is irrelevant. It isn’t going to work. And well before he runs for re-election, if he runs again, everyone is going to see that it didn’t work. Obama is already losing popularity. There will be a tipping point where he will lose credibility as well. That is a loss no politician can recover from.

What our family is doing on a small scale thing ; we are transferring over our banking from US Bank to a credit union this week. At least they’re forced to regulate after the Neil Bush et al scandals on Savings and Loans in the 80’s.We got fried on THAT one. Big time !!
Sad to see him rebound and make frigging millions on No Child Left Behind bullshit programs our schools were forced to purchase to get federal funding. Childhood in slavery, school sucks. Ma Barker Bush, share holder, made out like a gold rush whore on that one. Invest in our education. Dumb them down.

Yeah, you’re right.
But was he destined to win? Or was he placed there to suck the populist will out of the people?
I think we have to salvage what we can and focus on one or two main issues. Out of hundreds.
But those issues have to be rallying points. And we have no control over the economy so Healthcare is top dog, imo.

as a lawyer, you must really appreciate Obama’s extensions of Bush’s legal innovations.

Glenn Greenwald has been writing on these frequently.

What is the latin for “We must look forward, not backwards?”

I’ve always thought that was a big part of it. The disparity in wealth has led to too many on the bottom without much more than they need for essentials — essentials which are more and more are coming from large corporations that channel the money out of communities, instead of local businesses which keep it spread around more evenly. The large corporations, funnelling more money to fewer people, bloat this class with more than they can ever spend. This goes to Wall Street instead of circulating in our communities. Wall Street then had to invent all sorts of new investment schemes to deal with it. We’d have been better of with higher wages for the average worker and top executives whose compensation topped out at 20 or 30 times the average wage.

I think the bank bailout money could have gone to better uses. The stimulus money, as I understand it, is really just starting to be spent. Obama’s expecting some pretty positive effects from this money when it finally hits the economy. Perhaps by then credit will finally loosen up too.

That’s my misconception and I’m stickin to it, until …

John Kenneth Galbraith thinks you are right.

Point taken.

Debemus providere, non retro.

Okay, it’s time for my 2 cents worth again. Krugman/Stiglitz/et al’s basic point is that the unprecenented transfer of wealth upwards is due to the breaking of the unions, particularly since 1981, the deregulation started under Carter, but persued with a vengence under Reagan/Bush41/Clinton, the de-industrialisation of the U.S. and the assumption of the commanding heights of the economy by the FIRE sectors, which don’t actually produce anything but merely facilitate the movement of funds. Globalisation under policies like NAFTA then further accelerated these processes.

The domestic political counterpoint to this concentration of wealth has been the concentration of power by the upper 1% – 5% of the population either individually, e.g. George Sorus, or, more typically, by control via corporate domination, think tanks, etc. This situation has again been accelerated under Bush/Cheyney by the waste of U.S. treasure in useless wars of overseas aggression and further corporate concentration, e.g. in media, energy and banking sectors despite the corporate setbacks in the wake of Enron/Worldcom/etc.

The results of this have been all too predictable: a hollowing out of the middle class (& its increasing powlessness), the right-wing drift in the body politic necessary to hold the status quo in the face of the increasing restlessness due to the stagnation in real wages, the militarisation of society (incarceration at all time highs, police forces that resemble domestic standing armies, the constant search for people to blame – e.g. immigrants, etc). Orwell would have seen this as a drift toward fascism and the U.S. moving toward a form Latin American-style banana republicanism.

This structure explains the current dilemmas easily. The restless of the public underpins the dramatic collapse of Republican control since 2005, the 2006/08 mandate given to the Democrats to enact ‘change you can believe in’ and the struggles of the ruling elites to maintain the status quo. This gesalt unpins the resistance to regulatory reform, the sidelining of labor reforms and the unwillingness to put in place a large enough stimulus package despite its obvious demand-gap inadequacy visible to many at its time of passage.

Ominously, the Dems are now entering a highly dangerous ‘make or break’ moment – Health Care reform is now in play. The ineffeciencies of the status quo are visible to all. Failure at this point, would clearly show the power of the anti-democratic structures errected piece by piece since the late 70’s. If the Dems have been as captured by the ruling elites as the Repubs then the true face of this structure will be visible.

Roosevelt, in very similar circumstances in ‘33/’36, didn’t feel threatened by the discedited Repubs of the day – he slaughtered them in the ‘36 landslide which left only 16 Repub senators. His energetic reforms between 1933 & 1935 blew away embedded opposition. What he feared most was the drift to fascism encapsulated by the rise of Hughey Long and Father Coughlin. The public has already abandoned the Repubs; success now will allow the Dems to set in place a new structure akin to the one that existed between 1933 and 1965. Failure would cause a similar implosion to what we have just witnessed in the Repub party.

The discussion about under -v’s unemployed is akin to the debate about angels dancing on pinheads. It is merely one minor aspect of this unprecedented transfer of wealth from the middle upwards. The big picture is what we need to focus on.

Largely ignored in this whole discussion is where the vaunted increases in productivity have gone. Instead of labor getting its fair share, which would have provided for a sustainable increase in consumption power and not one based on easy credit, the increased profits have gone to the ownership class. A damn good reason to raise their taxes.