Thursday, February 5, 2009

Oh Fiddle De Dee

It's sad.

The so-called stimulus plan has stalled in the Senate where, as we speak, Susan Collins is leading a crack bi-partisan team of Senators to "scrub" the bill of all "unnecessary" spending, pork, and frivolity.

Meanwhile, public support for it has collapsed, and a desperate plea has gone forth from the White House to activate the Obama List and generate massive grassroots support to call and fax and email the Senators to back the bill. Please.

A little late. In fact, probably too late.

Some sort of bill will pass, to be sure, but given the way the stars are aligned, it will be a Republican bill primarily designed to protect the rich and to enhance corporate interests, secondarily to screw The People.

Same as it ever was.

Yesterday, I spent some time at various sites putting forth my considered opinion of what was wrong with the so-called stimulus bill and what was necessary to gain public support for doing something.

The problem, as I see it, is that the bill -- whether the House or the Senate version, and most definitely what will emerge from Republican (erm, excue me, "bi-partisan") surgery -- doesn't deal with the situation millions of households are facing, more every day, as the economy tailspins into oblivion. They are being crushed under a increasing burden of debt -- even if they don't buy anything else on credit -- and they fear losing their jobs, their homes, and any shred of dignity they might have left.

No bill so far proposed does anything about that in the short term.

Meanwhile, more trillions are proposed and pledged and paid to the banks and to Wall Street to pay off their gambling losses -- essentially without strings.

The People see this and throw up their hands in dismay.

I was accused of being an ingnernt slob for proposing that the priority should be household debt relief not banker and Wall Street debt relief. I was told that anything the Government spends is "stimulus" by definition. I was told that because I obviously knew nothing about macroeconomics, and therefore could not appreciate the beauty and truth of the stimulative properties of the massive spending programs in the stimulus bill, I had nothing to contribute to the discussion but "more BS."

"More BS" because I was focusing on the situation American households are facing, and how to deal with that to gain substantial public support, and not on what economic theorists believe is the "best practice" -- which generally ignores households and ordinary people in favor of a Grand Plan of some sort.

There's nothing necessarily wrong with the spending plans that are being proposed, as long as we understand they are essentially long-term economic restructuring programs, not "stimulus" programs for the short term.

Household economic distress has been building for years, ever since the forclosure crisis reared its ugly head, and for all these years, despite repeated and growing pleas, nothing has been done about it. Nothing is being proposed in the current bills to do anything about it, apart from a really insignificant payroll tax witholding reduction amounting to about $10 a week. That's it.

People who are burdened with crushing debt, in danger of losing their jobs, their homes -- or maybe they've already lost them -- rightly say, "WTF?!"

Especially when the Congress and the President are preparing to unload yet another few trillion and change on the banks and Wall Street and they are rightly furious.

The brainiacs who put together the programs under consideration have no clue.

What is needed is to deal with the household situation first, and they won't do it. They want their Grand Plan for Economic Restructuring adopted, and then, "maybe next year," they'll consider household relief.

Or maybe not. No, make that "probably not," because macroeconomic theory says that "debt relief" is not stimulative and doesn't help in economic restructuring in any case. Macroeconomic theory doesn't deal with households (even though their spending is 70% of the overall economy), consequently, what happens to American households is of no immediate interest or consequence for Grand Planners.

When I pointed out to one of these brainiacs that household debt relief (as opposed to banker/Wall Street debt relief) can potentially free up thousands of dollars a month per household immediately for them to spend on goods and services they can't purchase now, and that this is a priori "stimulative", I was told that stimulating spending at the household level is absolutely not what is wanted right now. That would run the risk of "reinflating the bubble," in other words, inflation, and we can't have that. No, what is wanted is the overall restructuring of the economy, and the Best Practice is to spend massively on programs and infrastructure that will serve the eventually restructured economy -- and let households drown.

At least a shred of honesty appeared for a moment.

This explains rather clearly why there has been no substantive effort at all at the policy level to stem the tide of foreclosures, to maintain employment, to relieve household debt, and so on, while there has been extraordinary effort to make sure that the gambling losses of the banks and Wall Street are covered, and to ensure that only certain aspects of the economy are propped up -- ie: those that support the rich and corporate interest, first; favored affinity groups second.

And now the Senate bill is being massaged to take out even the affinity group support, and it will probably pass and then be reconciled with the House bill, on Senate Republican parameters, and then go to the White House, where with much fanfare, the Incoming will declare a Bi-Partisan Triumph, and no one will be happy (except the rich and the powerful, who will chuckle at how they once again pulled the wool over the rubes' eyes), and the economy will continue to be sucked into the typical corporate Shock Doctrine Black Hole.

plus ça change, plus c'est la même chose...

1 comment:

  1. Thanks for your excellent posts on Digby's blog. I fear your well-earned cynicism is correct.

    A Fellow Cynic