Re: [Futurework] Bush out of gas

[Darryl and Natalia]

Hi Lawry,   I'm a bit confused by the second line of your response to Karen's post, that "the real culprit lies beyond the reach of the Bush administration: poor education for too many kids, obsolete labor/corporate structures and relations (past CEO's irresponsibly burdened future ones with unrealistic pension and other worker obligations) and off-shoring..."   Though I agree with the need for a realistic national industrial policy, I disagree that it has been past economists and politicians who are responsible for the mess, given the wasted previous six years of avoiding enactment of sound economic guidelines of balance and consequences. Sure, Greenspan, who Senator McCain would apparently gladly bring back from the dead to prop up like the corpse in Weekend At Bernie's, abused easy credit for decades. But it is the current administration that has managed to throw away so much of the nation's hard earned money--which should have been earmarked for social programs, infrastructure, healthcare and environment--to funnel it into national security/war efforts, and on top of that--borrowed more than all past presidencies combined--to a tune of 8 trillion dollars. This debt is totally owned by foreign interests, mostly China, Japan, India and S. Korea. Not that it's in their interests to cash in, but gold is becoming popular again, to India for starters, because trust in America's word as the strength of its currency is losing credibility. Though I can see that some of this would have carried over from Clinton and before, this is mostly a Bush II team debt. If the borrowed money had gone back into the country instead of being wasted on war/security/tax cuts for the rich, etc., then it would eventually be recovered in terms of a healthier country: better educated kids, sound infrastructure, social programs, jobs and so on. But it was squandered on the rich. And again, I must remark that most of that spending was inspired by Bush team's personal portfolios of war related industries, real estate holdings, and so on.    Empire of Debt co-author Addison Wiggins was featured on CBC radio this morning to relate some of the above mentioned information. Not news to most on Futurework, just something to finally make it to mainstream publishing.Wiggins adds to the astronomical figure of national debt the record average family debt of $90,000 (for mortgages) and $10,000 per person in credit cards alone.--a 266% increase for personal debt. 13 trillion GP, debt at 60% translates to 6 of every ten dollars to pay off the nation's debt. Long term: $26,000 per US citizen. Which pattern of spending reflects which?   Not long ago someone had posted the embarrassing sums of money stolen by US military/administrators in Iraq, particularly with respect to the reconstruction fund, which was basically Iraqi oil money being allocated to US officials to rebuild what the US had destroyed. Paul Bremmer was the fellow in charge of it all, and though his name was not mentioned in a report I heard two days ago, four officials, including comptroller, have finally been arrested. The report focused mainly on the Al Hilla region--described as a town of bad actors. I mention this not just as another sad example of Bush administration waste, but notoriously poor judgment of executive appointees. One of these guys had been previously convicted for fraud. Philip Bloom of Global Business Group was among them. As to political accountability, the WH declared that this was entirely deemed to be the result of individual temptation. Not broached by Ginger Cruz, Deputy General Special Inspector, or some such title, were Bremmer's acquisition/confiscation laws regarding Iraqi agricultural cultivation (esp. thousands-year-old seeds now patented) for Monsanto, I believe it was. I doubt they will be reversed by US government. Imagine these poor farmers having to pay for the right to plant their own heritage seeds to feed their families! Not at all Christian, these appointees!   My main point: it was this miscreant infected administration that has wasted existing and borrowed funds to the degree of irreversible harm, thereby wasting their time in power which could have been used to heal both internal and international wounds. Though few expected the Bush team to do much but war, the egregious waste on the president's part alone has been impeachable, and I cannot fathom the nation's Stockholm syndrome.   Kurt Vonnegut, recently speaking to a Canadian audience, declared that the dreaded 51st State, generally accepted here to be Canada, is actually The US State of Denial. He feels that there should be a war on oil, not on drugs, and added that he's vastly disappointed that cigarettes failed on their promise to kill him, so he's considering a law suit. The Dresden Vet said of Earth's citizens that they are in revolt against life itself--that they know exactly what they are doing to it. Of this last, would you not agree?   Natalia                  All mail scanned by NAV ----- Original Message ----- From: Lawrence de Bivort To: 'Karen Watters Cole' ; futurework@fes.uwaterloo.ca Sent: Thursday, February 02, 2006 7:02 AM Subject: RE: [Futurework] Bush out of gas Greetings, all   It is true that the US economy is ailing, and it is true that the Bush team, naturally, avoided the topic and distorted the record by carefully ‘selecting’ what it would talk about. But the real culprit lies beyond the reach of the Bush administration: poor education for too many kids, obsolete labor/corporate structures and relations (past CEO’s irresponsibly burdened future ones with unrealistic pension and other worker obligations), and, off-shoring (a better term for this phenomenon that out-sourcing).  Until we Americans develop an effective national industrial policy we will not be able to address these issues successfully.   Who then is really to ‘blame’?  Past economists and political leaders, who combined for reasons of ideology and interest group convenience to deride the idea of a national industrial policy.   Cheers, Lawry   From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Karen Watters Cole Sent: Thursday, February 02, 2006 9:38 AM To: futurework@fes.uwaterloo.ca Subject: [Futurework] Bush out of gas   More economic analysis of Bushonomics. The consensus seems to be that he is out of gas, running on empty. Others say, finished.   Once again, it’s imperative to correct the misinformation and grandstanding that flows incessantly from this administration, that “the rate of job growth over the period to which the president referred was 3.6%; the historical average for comparable periods in the past is 8.4%.”      We must repeat these corrections as often as the incorrect and false is repeated, in order to break the cycle of “misinformation”. KwC   Short Changed The times call for good economic stewardship, and last night we didn’t get it. By Jared Bernstein, The American Prospect, Web Exclusive: 02.01.06 When the economy is doing well, presidents tend to spout growth rates and historical comparisons in their State of the Union speeches, while leaders of the other party suffer through the speech. If a president is presiding over a downturn, he feels their (and everybody’s) pain, tortures a few numbers to suggest things are not that bad, and describes a way forward. But -- despite the serious economic challenges the country faces -- we heard little about it last night. The economy and economic policy got short shrift, with one or two statistics (4.6 million jobs and four-plus years of uninterrupted growth), a few sentences on health care, a few lines on tax cuts, and a smattering of education. Sometimes what presidents don’t say speaks volumes. It’s worth pondering why the economics section of the speech was light. First, many things are not going Bush’s way right now. A few days ago, we learned the real GDP rose 1.1 percent in the last quarter of 2005, the worst growth rate in three years. Before that, the Bush team could brag of at least moderate growth rates, but their Achilles’ heel was that the growth wasn’t trickling down -- it was gushing up. In fact, the morning of the speech, we at the Economic Policy Institute released a note showing that, according to Bureau of Labor Statistics data, one of the broadest measures of wage growth in the economy fell about 1 percent in real terms last year. The administration’s rap had been, “Pay no attention to the wage squeeze. With rising health costs, employers are just taking dollars from the wage side and plowing them into health benefits.” Except real compensation was essentially unchanged (down 0.2 percent) in 2005. And this was yet another year with strong productivity growth. The fact is that profits, which soared over the last few years, are squeezing both wages and compensation. The president is right about the economy growing for four years. But the distribution of that growth has been highly skewed. It’s possible the administration truncated the usual “ain’t we great” rap here because of the dissonance it might cause with so many Americans working harder yet still falling behind. Oh, and that 4.6 million jobs. It sounds like a big number, but that’s half the rate at which jobs were growing at this point in the last recovery. The rate of job growth over the period to which the president referred was 3.6 percent; the historical average for comparable periods in the past is 8.4 percent. In fact, that remaining slack in the job market is one reason real wages are doing so badly (faster energy-induced price growth is another). It also seemed, to me at least, that another reason for the shabby treatment of domestic policy was that the president isn’t that engaged in this stuff anymore. Sure, he’d like to cut more taxes, but, especially given the flop of his 60-city Social Security tour, the fire in his belly is all about 9-11, the Iraq war, domestic spying, and intimidating the wimps who refuse to see it his way on foreign policy. But enough psychoanalysis. Here is a look at some of the president’s recommendations. Don’t Let the Sun Go Down: The president touted his $880 billion in “tax relief” and tried to connect those dots to the ongoing economic recovery. To see the stretch in this argument, check out this analysis by my EPI colleague Lee Price, but it’s a typical State of the Union move to make such connections. There were, however, two pretty egregious parts that followed. First, there was this crazy argument that if we stick to the law and let the tax cuts sunset (they’re set to expire over the next few years), “American families will face a massive tax increase they do not expect.” Do not expect? The cuts were sold on the basis that they’d expire by the end of this decade. That’s the only way the president and Congress could at least create the illusion that they could control the deficit that the cuts helped to create. Their expiration is on the books; that’s hardly unexpected. We all understand that powerful forces would like to extend them, but there can be no doubt that making the tax cuts permanent involves new tax cuts, and there are many in Congress, including Republican moderates, who may not be so quick to sign off on these new cuts. The other objectionable part here was the president’s equating good stewardship with cuts in “non-security discretionary spending.” What’s really being said here is that given these massive tax cuts, they’ve got to make a show of cutting spending. But they can’t go after entitlements or defense, or any of those programs with big lobbyists behind them, which leaves Medicaid, food stamps, student aid, child support enforcement -- these are what our benighted fiscal stewards are going after, and they’re actually making “progress.” Attention Health Care Shoppers: The president was expected to say more here, but again, his heart wasn’t in it. The administration will soon be offering expansions of Health Savings Accounts, their major health care initiative. These are personal accounts (sound familiar?) where you can save and withdraw money tax free for medical expenses. To join the program, you have to purchase an insurance policy with a high deductible. These policies cover the really expensive stuff, but for the rest of your care, you pay out-of-pocket. The idea is that by shifting the costs for the small stuff from their insurers to their wallets, consumers will become better health-care shoppers. This is not the place for detailed analysis but many economists don’t believe these plans will save money or lower health costs, and most people -- surprise -- are not interested in bearing more costs, even with the tax incentive. Which isn’t to say there’s not a big problem in need of a solution here. To his credit, the president acknowledged last night that it isn’t really Social Security that’s going to gobble up the economy; it’s health care. HSAs won’t change that one whit, nor will it do much to address the plight of the 46 million uninsured Americans. And by the way, the president did admit his team has no idea what to do about the health-care challenge, i.e., he announced a bipartisan commission to study the coming pressures on Medicare, Medicaid, and Social Security. Speaking of admissions, the impressive part of the speech was the president’s acknowledgement that “America is addicted to oil,” words that don’t come easy to an old oil guy (I imagined a big sneer from Cheney when he heard that). But here again, as the The New York Times put it this morning, “ the goal was grand, the means were minuscule.” According to one analyst, the proposed new expenditures would just get renewable-energy funding back to its pre-Bush level. After a nod to his guest-worker program, this part of the speech ended with some Clintonesque ideas about enhancing research and development and encouraging children to learn math and science. But by then it was pretty clear that beyond cutting taxes, inveighing against “protectionists” (anyone who’s concerned about the downsides of globalization), and incentivizing risk-taking as a health-care plan, the Bush administration’s economic agenda has run out of gas. I suppose one could applaud that development but I find that too cynical. We face a set of economic challenges calling for true stewardship. We haven’t had it for years, and we didn’t get it last night. Jared Bernstein is a senior economist at the Economic Policy Institute, a nonprofit, nonpartisan think tank in Washington, D.C. and author of the forthcoming book, All Together Now: Common Sense for a Fair Economy, published by Berrett-Koehler. http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=11066     _______________________________________________ Futurework mailing list Futurework@fes.uwaterloo.ca http://fes.uwaterloo.ca/mailman/listinfo/futurework

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