hungeski
(from The Paragraph) During the presidency of Ronald Reagan, Republicans latched onto three theories that allowed them to hand out tax cuts and pile up debt. One theory is “Starve the Beast“, which says to cut taxes now, so to bring on a budget crisis that would force cuts in social spending later. As one Republican consultant put it: “[W]e have to ‘starve the beast.’ Cutting their allowance is the only way to put politicians on a spending leash. And that means tax cuts, tax cuts and more tax cuts.”1 A second theory is “Voodoo Economics“, which says that tax cuts — especially for the rich and corporations — would heat the economy and actually boost tax revenue.2 When Ronald Reagan touted this policy in the 1980 presidential race, George H. W. Bush, his opponent in the Republican primary, argued against it — and coined the term: “[I]t just isn’t gonna work … this type of what I call a voodoo economic policy.”3 A third theory is the “Two Santa Claus Theory“, which tells Republicans to play the tax-cut Santa so to rival the Democratic social-spending Santa. The author of the theory, Jude Wanniski, wrote: “The political tension in the marketplace of ideas must be between tax reduction and spending increases, and as long as Republicans have insisted upon balanced budgets, their influence as a party has shriveled …”4 These three theories came to a boil with the presidency of George W. Bush, which pushed through big tax cuts for millionaires and big spending hikes for the military.5 Seven months into his term, when a report showed that the surplus left by President Bill Clinton was quickly dwindling, Bush called it “incredibly positive news.”6 Later, Vice President Dick Cheney hit the same note, saying: “Reagan proved deficits don’t matter.”7 After eight years of Bush — helped along by millionaires pumping their tax cut money into the Wall Street bubble, and the Bush regime borrowing gobs of money to waste on war — the economy crashed.8 Now, a year-and-a-half later, the country is still reeling from the Bush Crash — with one-in-five persons without full-time work, and cities and townships cutting teachers,firefighters and police.9 Democrats have addressed the emergency with short-term spending on infrastructure, education and safety services.10 While their work has cut the job loss rate, it has not been enough to bring down the jobs shortage rate — and the urgent need for more such spending persists. But so do the theories persist, as Republicans strive to kill further jobs spending, and keep the millionaires’ tax cuts.11
Sources
1 ‘Off center: the Republican revolution and the erosion of American democracy’ By Jacob S. Hacker, Paul Pierson, 2005, Yale University Press Quote by Chuck Muth
2 The Death of Supply-Side Economics’ – DLC, 2003-04-03
“Do tax cuts pay for themselves?” [Wall Street Journal columnist Alan] Murray asks. “That’s been the hot debate of American political economy for the better part of three decades. But it ended last week — with a whimper.” As Murray explains the CBO report, “The results: Some provisions of the president’s plan would speed up the economy; others would slow it down. … But in every case, the effects are relatively small. And in no case does Mr. Bush’s tax cut come close to paying for itself over the next 10 years.”
3 ‘Voodoo Economics’ NBC, 1980-04-10
Based on an exhaustive analysis of tax records and census data, the [CBO] study reinforced the sense that while Mr. Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners.
…
Economists and tax analysts have long known that the biggest dollar value of Mr. Bush’s tax cuts goes to people at the very top income levels. One reason is that two of his signature measures, tax cuts on investment income and a steady reduction of estate taxes, overwhelmingly benefit the wealthiest households.
7 ‘Dick Cheney on Budget & Economy’ – ontheissues.org
O’Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. “You know, Paul, Reagan proved deficits don’t matter,” he said, according to excerpts. Cheney continued: “We won the midterms (congressional elections). This is our due.” A month later, Cheney told the Treasury secretary he was fired.
… Over these [last several decades], grand concentrations of private wealth have been the engines behind the high-risk, high-return speculation that fueled economic bubbles in technology, housing, and commodities. …
The underemployment rate, including people who have given up looking for work and part-time workers who want to be full time, rose 0.2 point to 17.1%. That’s near October’s record high of 17.4%.
Now that unemployment has topped 10 percent, some liberal-leaning economists see confirmation of their warnings that the $787 billion stimulus package President Obama signed into law last February was way too small. The economy needs a second big infusion, they say.
No, some conservative-leaning economists counter, we were right: The package has been wasteful, ineffectual and even harmful to the extent that it adds to the nation’s debt and crowds out private-sector borrowing.
These long-running arguments have flared now that the White House and Congressional leaders are talking about a new “jobs bill.” But with roughly a quarter of the stimulus money out the door after nine months, the accumulation of hard data and real-life experience has allowed more dispassionate analysts to reach a consensus that the stimulus package, messy as it is, is working.
… Mr. Obama’s promise to “save or create” about 3.5 million jobs by the end of 2010 is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers.
…
Among Democrats in the White House and Congress, “there was a considerable amount of hand-wringing that it was too small, and I sympathized with that argument,” said Mark Zandi, chief economist of Moody’s Economy.com and an occasional adviser to lawmakers.
Even so, “the stimulus is doing what it was supposed to do — it is contributing to ending the recession,” he added, citing the economy’s third-quarter expansion by a 3.5 percent seasonally adjusted annual rate. “In my view, without the stimulus, G.D.P. would still be negative and unemployment would be firmly over 11 percent. …
…
That sort of impact is what makes federal aid to state governments rank high in economists’ reckoning of the stimulus value of various proposals. Every dollar of additional infrastructure spending means $1.57 in economic activity, according to Moody’s …
…
By contrast, most temporary tax cuts cost more than the stimulus they provide, according to research by Moody’s. …
11 ‘Could Bush Tax Cuts Survive?’ – All Things Considered, NPR, 2010-04-18
RAZ: Now, at the end of this year, the Bush era tax cuts expire, and before he left office, Mr. Bush urged Congress to make his tax structure permanent.
Now, Republicans say that at the very least, those tax cuts should be extended. But with a high deficit gap, Democrats say the richest Americans should get ready to pay more, starting next year.
…
RAZ: How long, in your view, should those Bush era tax breaks last?
Sen. GREGG: …[C]learly in the foreseeable horizon, raising rates is a really bad idea if you want to get this economy moving.
RAZ: That’s New Hampshire Senator Judd Gregg. He’s the ranking Republican on the Senate’s Budget Committee. …
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By Quinn Hungeski – Posted at TheParagraph.com
hungeski ![Rep. Roskam shakes Etch-A-Sketch as Pres. Obama looks on. [from C-SPAN]](http://theparagraph.com/files/pics/healthsummit_etchasketch.jpg "Rep. Roskam shakes Etch-A-Sketch as Pres. Obama looks on. [from C-SPAN]")
“[The American people] … have rendered a judgment about what we have attempted to do so far,” said Senator Mitch McConnell (R-KY) at the president’s big health care meeting last week.30+31 “[P]ut that on the shelf and … start over with a blank piece of paper and go step by step.” This theme, that the American people want to start over with a blank sheet of paper, was repeated by Republicans throughout the six-hour meeting. But when Rep. Peter Roskam (R-IL) got his turn, he gave it a twist: “[The American people] say, look, take the Etch-A-Sketch, go like this [shaking imaginary Etch-A-Sketch upside down], let’s start over, let’s do incremental things …”32+33 Vice President Joe Biden addressed the Republican claims of knowing what the American people want: “I think it requires a little bit of humility to be able to know what the American people think. … I know what I think. I think I know what they think, but I’m not sure what they think.”34 The Republicans pointed to polls showing that most Americans don’t like Congress’s health care bills, but President Barack Obama pointed to polls showing that most Americans do like individual points of the health care bills.35 Taking a cue from Vice President Biden, I won’t claim to know what others want, but I know what I want in a health care system, and, taking a cue from the Republicans, I am writing it on a blank sheet of paper:
1. Good, Constant Coverage: I want a plan with good, reasonable coverage that is always in effect — even when I’m in between jobs.
2. Insurance Standards: I want coverage without insurance company tricks and loopholes: no caps, no denial for preexisting conditions, no cancellation when needing an pricey treatment.
3. Quick Treatment: I want to be able see my doctor, or go to a walk-in clinic and get treatment, without waiting days for an appointment.
4. No Paperwork: I want to be able to show my health care card and get treatment — no interview, no forms.
5. Doctor’s Best Judgment: I want my doctor to act from one’s own best judgment, and not from the need to ring the cash register.
6. No Premiums: I want to pay for this out of our taxes. But if I have to pay a premium, it should be affordable, and I should be able to pay it into a public, non-profit plan.
7. Everyone In: I want these things for everyone in America. A healthier nation is a stronger and freer nation.
Which of these features do you want in a health care bill?
Click HERE to vote in the poll.
While Congress’s bills would address some of these features in some measure, I think that the best and least costly way to get them would be to improve and extend Medicare to all.36 While Congress has not moved on that, several states are now moving towards a single-payer system.37
Sources
30 ‘Health care summit: Transcripts from every speaker’ – Washington Post, 2010-02-25
32 ‘Rep. Peter Roskam makes remarks at White House health summit’ – CQ Transcriptions, 2010-02-25
33 ‘White House Health Care Summit, Part 2’ C-SPAN, 2010-02-25 – video Etch-A-Sketch routine at 134:40
36 ‘Comparing the House and the Senate Health Care Proposals’ New York Times, 2010-02-23
37 ‘Single-Payer Healthcare Coming to Minnesota and Maryland’ by David Swanson, 2010-03-03
California keeps passing bills for state single-payer healthcare, but Ahhhnold won’t sign em, and Jerry Brown who wants to be governor doesn’t seem to want it badly enough to make a commitment on healthcare. Meanwhile, Pennsylvania is encouraged that their current governor has said he probably will sign a single-payer healthcare bill, and the legislature just might pass one. But Minnesota has an angle neither of these other states can claim: a serious candidate for governor who is the state’s leading advocate for single-payer.
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By Quinn Hungeski – Posted at TheParagraph.com
hungeski (From The Paragraph.)
From Climbing Mountains to Building Schools
K2 from air, West Face (Guilhem Vellut) Greg Mortenson is an American, who grew up near Mount Kilimanjaro, where his father started a teaching hospital and his mother started a school.20+21 From that background, Mortenson became a nurse, and an avid mountain climber — but later switched to become an avid school-builder. The switch came with his try at climbing K2, the second-highest peak on Earth, so deep in the Himalayas that it had long stayed almost unseen — and nameless.22 Mortenson and his buddy gave up the climb after their exhausting rescue of an ill teammate.23 On the way down from base camp, Mortenson made a wrong turn, and eventually staggered into the village of Korphe, Pakistan. The village welcomed him and, over time, nursed him back to health. During his stay, Mortenson saw the state of the village’s schooling:26
… I walked behind the village, and I saw 84 children sitting in the dirt during their school lessons. There were five girls, 79 boys. What really struck me, though, was that there was no teacher there. And I said, where’s your teacher? And they said, Master Hussein is in the next village because we can’t afford his daily one dollar salary. So that day in ’93 I made a promise to try and get a school built there.
After working at it for three years, Mortenson fulfilled his promise. Since then, his Central Asia Institute (CAI) has built 131 schools in rural Pakistan and Afghanistan.
CAI’s Pigish High School in the Wakhan Corridor, Afghanistan (Teru Kuwayama)
Community Buy-In is Key to Success
The school-building process starts when persons of a village ask Mortenson to meet with them.23+24 Community members then take part in every stage of planning and building. The CAI provides the teacher training, materials and skilled labor, and the community provides the land, resources, and 2000 to 5000 days of manual labor. So with this community buy-in, in these countries where the Taliban has bombed or otherwise shut down hundreds of girls’ schools, only one CAI school has been attacked. Mortenson tells the story of how that school was closed and soon reopened:26
About 14 Taliban came in at night. They beat up the night watchman and the next day they said if anybody comes to school, we’ll kill you. The headmaster got on his bicycle. He pedaled about 23 miles. He went to the local commander. Now, he’s somewhat of a shady guy, but he also has two daughters in school, and so he rounded up about 120 men. He came in with his militia. He killed two Taliban and then, for lack of better words, he extracted information from the other Taliban.
And he found out they had gotten $3,000 to shut the school down from the local mullah. So today, some of those men are in prison and two days later, the school was reopened. He appointed 12 Askari, which are – Askari is like militia men – to guard the school. And they have orders that if anybody tries to hurt or harm the school or the students, that they should just shoot them.
School under construction in Daltir, Thaile Valley, Baltistan, Pakistan (Teru Kuwayama)
Educating Girls is Powerful
Gultori Girls’ School near
Skardu, Baltistan, Pakistan (Teru Kuwayama)
CAI schools now teach 58,000 children — three-quarters of them girls.20 Mortenson explains this focus on teaching girls:24
Well, it’s obvious the boys need education also. But as a child in Africa, I learned a proverb. And it says, “If we educate a boy, we educate an individual. But if we can educate a girl, we educate a community.” And what that means is when girls grow up, become a mother, they are the ones who promote the value of education in the community. The education of girls has very powerful impacts in a society. Number one, the infant mortality’s reduced. Number two, the population is reduced. The third thing is the quality of health improves. … And another compelling reason is when women are educated, they’re not as likely to condone or encourage their son to get into violence or into terrorism. In fact, culturally when someone goes on jihad, they should get permission from their mother first. And if they don’t, it’s very shameful or disgraceful. So when women are educated, as I mentioned, they are less likely to encourage their son to get into violence. And I’ve seen that happen … over the last decade in rural areas of Afghanistan, Pakistan. I mean, I could go on all day about this, but educating girls is very powerful.
A Girls’ School in Taliban Country
Mortenson tells the story of how the CAI came to be building a girls’ high school in the heart of Taliban country:24
[O]ne of our goals … was to put a girls’ high school in Urozgan province in Afghanistan, which is in the south. It’s the home of Mullah Omar, the leader of the Taliban — it’s probably one of the last bastions who are completely opposed to girls going to school. And so last year we kind of set a rough goal that would take us … 20 years to set up a girls’ school there. So this spring, a year later, we got contacted by … the elders of Urozgan province. They wanted to visit one of our schools. And we said sure. And so this summer they came to Char Asiab, where we have a girls’ school. And these are about 14 men. When they got to the school, these are, you know, some of them are, you know, kind of shady guys, black turbans. They’re armed to the teeth, have, you know, big, long beards. And when they got there, they saw the giant playground. So they threw down their weapons. For the next hour and a half, they went on the swings and slides and had a glorious time playing. And I finally kind of had to stop them and say, “You know, let’s get serious. We need to — this is the headmaster. We need to talk to the principal.” And he said, “No, no. We’re totally satisfied. We want a girls’ high school in Urozgan Province. But it has to have a playground. And you have to come and have tea with us.” So I got up the nerve in September to visit Urozgan. And this is an area, there’s no U.S. troops there. I mean, there’s no nothing there. There’s a lot of Taliban. We had a giant jirga. And I was pretty, you know, pale faced and kind of fearful. But it was a beautiful meeting. When they got done, they said, “We want to start this school. Of course we want the playground built first.” And so in October 2009 we started breaking ground on the school, and this year, in 2010, the school will be finished this summer.
Greg Mortenson, second from right, with tribal leaders in Tarin Khot, Urozgan Province, Afghanistan (Teru Kuwayama)
Advice for U.S. Officials
From his many years of working with the people of Afghanistan, Mortenson gives two strong points of advice to officials of the United States, which has 100,000 of its soldiers in that country, along with 130,000 persons under contract.25 One point is to talk with the elders:24
Every province has three to five dozen shura. And these are elders. They’re poets. They’re warriors. They’re businessmen, a few women. And they’re not elected, but they’ve kind of risen up through the ranks. And these to me are the real people with integrity and power in Afghanistan. … And it’s not that difficult. You can do it at a district level, or local level, or at a national level. It’s, you know, I think half of diplomacy is just showing up. You know, we’ve got to actually just show up and start to talk and then maybe we could get somewhere.
And the other point is to not bomb people:24
[O]f all things that the elders say is, please, do not bomb and kill civilians. That is the number one way to antagonize people.
###
Further Information
Video: Bill Moyers interviews Greg Mortenson — video and transcript
Sources
20 ‘Greg Mortenson – bio’ – gregmortenson.com – pdf
21 ‘Three Cups of Tea’ (excerpt) by Greg Mortenson & David O. Relin, 2006, Viking Press
22 ‘K2: The Story of the Savage Mountain’ by Jim Curran (1995). Hodder & Stoughton. p. 25. ISBN 978-0340660072
23 ‘Teach a Girl, Change the World’ By Judith Stone, Good Housekeeping, May 2009
24 Greg Mortenson interview, video and transcript, Bill Moyers Journal, 2010-01-15
25 ‘DOD: Obama’s Afghan Surge Will Rely Heavily On Private Contractors’ by Justin Elliott, TPM Muckraker, December 15, 2009
26 ‘Greg Mortenson: ‘Ordinary Oprah’ – NPR, March 12, 2009’
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By Quinn Hungeski – Posted at TheParagraph.com
hungeski 
Haplocanthosaurus, where it belongs. Cleveland Museum of Natural History
(From The Paragraph.) Since U.S. states abandoned their old laws that curb corporate power, many corporations have become dinosaurs — huge beasts that have outlived their time, but that keep on stomping through the world.1 One type of dinosaur is the big oil company, whose products feed disastrous global warming climate change. Such companies should cut back production as the world limits greenhouse gases. Instead, the largest of them, ExxonMobil, has spent many millions to cast doubt on the scientific facts of climate change.2+3 Another type of dinosaur is the for-profit medical insurance company, whose kind controls the gates to health care, shutting out many millions, and canceling the policies of many who need a costly treatment.4+5 Such companies should bow out of the basic medical insurance business, and let Congress improve and extend Medicare to all. Instead, they have hired former government officials to lobby for keeping control, while getting millions of new, healthy customers at taxpayer expense.6 A third type of dinosaur is the Wall Street bank, whose kind sold lousy bonds as AAA-rated, sold vast amounts of bets against those bonds, and sold more bonds backed by those bets — before crashing the economy in 2008.7 Such banks should have gone bankrupt, letting smaller, well-run banks pick up the slack. Instead, those banks deemed “too big to fail” got government bailouts, and are now working on the next bubble and crash, while their lobby — the biggest in D.C. — works to thwart Congress’s tries at stopping them.8+9 All of these corporate dinosaurs have spent much money to skew policy for themselves and against the public. But among the old state laws are those that totally ban corporations from the public policy arena. If the U.S. Congress would pass such a law, it could at last send the corporate dinosaurs stomping into history, where they belong.
Here is an example from Wisconsin in 1905 of a law banning corporate influence on public policy:10
No corporation doing business in this state shall pay or contribute, or offer consent or agree to pay or contribute, directly or indirectly, any money, property, free service of its officers or employees or thing of value to any political party, organization, committee or individual for any political purpose whatsoever, or for the purpose of influencing legislation of any kind, or to promote or defeat the candidacy of any person for nomination, appointment or election to any political office.
Penalty: Any officer, employe, agent or attorney or other representative of any corporation, acting for and in behalf of such corporation, who shall violate [this act] shall be punished upon conviction by a fine of not less than one hundred nor more than five thousand dollars, or by imprisonment in the state prison for a period of not less than one nor more than five years, or by both … and if the corporation shall be subject to a penalty then by forfeiture in double the amount of any fine so imposed … and if a domestic corporation, it may be dissolved, … and if a foreign or nonresident corporation, its right to do business in this state may be declared forfeited.
Similar Ohio Law, 1908
Section 1, That no corporation doing business in this state shall directly or indirectly pay, use or offer, consent or agree to pay or use, any of its money or property for, or in aid, of any political party, committee or organization, or for, or in aid of, any candidate for political office or for nomination for any such office, or in any manner use any of its money or property for any political purpose whatever, or for the reimbursement or indemnification of any person or persons for moneys or property so used.
Section 3. Every corporation which violates section 1 of this act shall be punished by a fine of not more than five thousand nor less than five hundred dollars… Any officer, stockholder, attorney, or agent of any corporations which violates section 1 of this act who participates in, aids, or advises any such violation, and any person who solicits or knowingly receives any money or property in violation of this act shall be punished by imprisonment for not more than one year or a fine of not more than one thousand dollars, or both at the discretion of the court.11
Other Wisconsin Laws
From research by Jane Anne Morris:1
- corporations were required to have a clear purpose, to be fulfilled but not exceeded.
- corporations’ licenses to do business were revocable by the state legislature if they exceeded or did not fulfill their chartered purpose(s).
- the state legislature could revoke a corporation’s charter for a particular reason, or for no reason at all.
- the act of incorporation did not relieve corporate management or stockholders/owners of responsibility or liability for corporate acts.
- as a matter of course, corporation officers, directors, or agents could be held criminally liable for violating the law.
- state (not federal) courts heard cases where corporations or their agents were accused of breaking the law or harming the public.
- directors of the corporation were required to come from among stockholders.
- corporations had to have their headquarters and meetings in the state where their principal place of business was located.
- corporation charters were granted for a specific period of time, like 20 or 30 years (instead of being granted “in perpetuity,” as is now the practice.)
- corporations were prohibited from owning stock in other corporations in order to prevent them from extending their power inappropriately.
- corporations’ real estate holdings were limited to what was necessary to carry out their specific purpose(s).
- corporations were prohibited from making any political contributions, direct or indirect.
- corporations were prohibited from making charitable or civic donations outside of their specific purposes.
- state legislatures set the rates that corporations could charge for their products or services.
- all corporation records and documents were open to the legislature or the state attorney general.
All of these provisions were once law in the state of Wisconsin. And similar ones were on the books in most other states.
Sources
1 ‘Fixing Corporations: The Legacy of the Founding Parents’ by Jane Anne Morris, Madison, Wisc.
2 ‘Some Like It Hot’ By Chris Mooney, Mother Jones May/June 2005 Issue
In 1989, the petroleum and automotive industries and the National Association of Manufacturers forged the Global Climate Coalition to oppose mandatory actions to address global warming. …
…
[W]ith the release of the IPCC’s third assessment in 2001, a strong consensus had emerged: Notwithstanding some role for natural variability, human-created greenhouse gas emissions could, if left unchecked, ramp up global average temperatures by as much as 5.8 degrees Celsius (or 10.4 degrees Fahrenheit) by the year 2100. “Consensus as strong as the one that has developed around this topic is rare in science,” wrote Science Editor-in-Chief Donald Kennedy in a 2001 editorial.
Even some leading corporations that had previously supported “skepticism” were converted. Major oil companies like Shell, Texaco, and British Petroleum, as well as automobile manufacturers like Ford, General Motors, and DaimlerChrysler, abandoned the Global Climate Coalition, which itself became inactive after 2002.
Yet some forces of denial—most notably ExxonMobil and the American Petroleum Institute, of which ExxonMobil is a leading member—remained recalcitrant. In 1998, the New York Times exposed an API memo outlining a strategy to invest millions to “maximize the impact of scientific views consistent with ours with Congress, the media and other key audiences.” The document stated: “Victory will be achieved when…recognition of uncertainty becomes part of the ‘conventional wisdom.’” …
Though ExxonMobil’s Lauren Kerr says she doesn’t know the “status of this reported plan” and an API spokesman says he could “find no evidence” that it was ever implemented, many of the players involved have continued to dispute mainstream climate science with funding from ExxonMobil. …
3 ‘Put a Tiger In Your Think Tank’ Mother Jones May/June 2005 Issue
ExxonMobil has pumped more than $8 million [from 2000 to 2003] into more than 40 think tanks; media outlets; and consumer, religious, and even civil rights groups that preach skepticism about the oncoming climate catastrophe.
The United States has the most expensive healthcare system on the planet. Even including the 47 million uninsured, the U.S. healthcare system costs almost double per capita what single-payer systems in Europe, Japan and Canada cost; in the United States, healthcare costs were $5,635 per person in 2005.
5 Bill Moyers Journal, July 10, 2009
The House Energy and Commerce Committee found that the major private health insurers had rescinded the policies of approximately 20,000 people in a five year period, to avoid paying out approximately $300 million in benefit claims.
The nation’s largest insurers, hospitals and medical groups have hired more than 350 former government staff members and retired members of Congress in hopes of influencing their old bosses and colleagues, according to an analysis of lobbying disclosures and other records.
…
The hirings are part of a record-breaking influence campaign by the health-care industry, which is spending more than $1.4 million a day on lobbying in the current fight, according to disclosure records. …
The push has reunited many who worked together in government on health-care reform, but are now employed as advocates for pharmaceutical and insurance companies.
7 ‘An Inside Story of Wall Street Bank Crashes’ The Paragraph,
December 26th, 2008
8 ‘Capital City’ by Kevin Drum, Mother Jones, Jan.-Feb. 2010
let’s take a virtual stroll down K Street and see what everyone is spending on the world’s second-oldest profession. It’s all laid out for us by OpenSecrets.org. The defense lobby? Pikers. They contributed $24 million to individuals and PACs during the last election cycle. The farm lobby? $65 million. Health care? We’re getting warmer. Health care was the No. 2 industry, at $167 million.
And the finance lobby? They’re No. 1, with a very, very big bullet. They contributed an astonishing $475 million during the 2008 election cycle. That’s up from $60 million almost two decades ago.
9 ‘Don’t Reinflate the Old Bubbles’ By Steven Pearlstein, Washington Post, October 14, 2009
What we’re witnessing here is pretty simple: another bubble in financial assets. All that “liquidity” created by the Federal Reserve and other central banks has accomplished its task and prevented a global financial meltdown. But unless they move now to begin sopping up that liquidity, the central bankers run a serious risk of reinflating many of the same bubbles that got us into this mess in the first place.
…
The problem is that because we didn’t get into this recession in the normal way, the normal analysis and remedies are not appropriate. Slow growth and high unemployment are indeed going to be a big problem over the next several years, but they aren’t going to be solved by pumping out lots of cheap money that is used to speculate in stocks, bonds and commodities rather than be invested in the real economy. And if all this speculation has the effect of driving up the price of commodities and driving down the value of the dollars we use for imports, then it is perfectly possible to wind up with high inflation and high unemployment at the same time — as happened in the late 1970s.
The right policy response is for the Fed to begin withdrawing some of this extraordinary monetary stimulus even as the rest of the government steps up its effort to stimulate the real economy. That means more money for extended unemployment benefits; more aid to the states so that they can maintain the most vital public services; and more money to expand mass transit, state college and university systems, efficient energy production and basic scientific research. The economist Paul Krugman estimates that for every dollar in extra debt that will be required to finance this fiscal stimulus, about 40 cents will be repaid almost immediately in the form of tax revenues from higher short-term economic growth. And if the money is invested wisely in quality projects with high returns, the other 60 cents could wind up being a boon to future generations, rather than a burden.
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By Quinn Hungeski – Posted at TheParagraph.com
