Here it comes. The economy is coming back. And with more people than ever working to make it grow as fast as possible, we may have some good news soon. This is about the economics of taking back America from the super-rich and returning it to the Middle Class
We have already heard some good news. In early 2012, the signs…employment, spending, and production have all increased. When President Obama took office, that month, January of 2009, the economy lost something like 700,000 jobs. That was a continuance of a huge increase in unemployment that had begun early in 2008, and it continued until the end of 2009.
But today, in February of 2012, we have now had more than 20 months of expansion in the GDP and job growth by over one hundred thousand jobs a month. More recently, that number has doubled on a monthly basis. The auto industry is experiencing increased sales and good profits. Other businesses are beginning to re-hire and many jobs are being returned to the U.S. from offshore.
But it is not all good news. The Gross Domestic Product, GDP, will be overtaken by our debts this year unless we act. In other words, our long-term national debt will be greater than the entire domestic output…auto sales, steel sales, food, health care, travel…everything we do here that involves a sales transaction…will be slightly less…this year….than the long term debt. That is about $15 trillion dollars and that is roughly our current domestic activity.
Always remember…$7 trillion of our $15 trillion in debt came in the eight years of the Bush administration, during which time they either had complete control of Congress or had control of one chamber while having sufficient numbers to control the other. The Democrats barely held the Senate and then they experienced some illnesses, plus the loss of Senator Kennedy and Senator Byrd and the serious illness of Senator Johnson. They were able to block a number of Democratic programs and they did.
The years 2009 – 2012 were marked, as we said, partially by continued fall out, continued job loss from the enormous failure of Wall Street and the reckless behavior supported by the Bush-Cheney Administration. They were also marked by a loss in national revenues and an increased unemployment and welfare expenditure that took the deficit and more than doubled it.
The cause of the Great Bush Recession is pretty clear…the failure to hold down home prices, allowing real estate and Wall Street speculation with the money put into homes by average American citizens, the huge Prescription Drug bill, two wars and two tax cuts. All these things cost Americans $7 trillion on top of an already $5.6 trillion run up by Reagan, Bush II, and Clinton before he was able to balance the budget.
Unemployment cannot be addressed. The Republican Party has determined…as have the Republican voters in many districts who sent their Tea Party members, the Koch brothers’ Right Wing reactionary anti-tax fanatics, to Washington…to obstruct any spending on behalf of the super-rich who do not want to see their taxes increase. The result has been the defeat or obstruction without vote by the Republicans of any job-producing legislation from the Obama administration.
By the way, the Republicans in Congress who were elected under the “Tea Party” banner in 2010 like to say in committee meetings, as they are harassing…and that is the only applicable word…childishly harassing instead of gathering information…the members of the Administration staff who are sent up to testify…are not concerned about the deficits and the national debt. So, they are more than likely simple racists.
If you were going to run for Congress and your issue was the national debt and one Party had rung up $13 trillion of the $15 trillion in debt, including the last $12 trillion of that…and another Party which had most recently…before the Bush Recession…balanced the budget and handed over to Bush not only a surplus but a government whose income and expenditures were in balance…which Party would you join?
In other words, the Tea Party legislators are liars and worse…they are Neo-Fascists. In other words they were elected by lying to the voters while planning secretly to support programs by the super-rich who gave them the money to win their election campaigns.
That’s how the original Fascists came to power; that’s how the Tea Party Neo-Fascists have done it.
Although things are looking up, there are still over 2 million Americans who have been out of work for over 2 years and 700,000 who have been out of work for over 3 years.
In 2007, 405,000 people lost their homes were actually foreclosed on and tossed out. In 2008, that rose to 861,644. In 2009, 918,000 homes were seized. In 2010, 1,050,000 homes were foreclosed on. And in 2011, the number dropped finally to a mere 804,000. That means that since 2007, when the foreclosures started to come at a record pace…3,978,000 people have actually lost their homes, and it is probably actually a little more. That does not include all foreclosure filings. Those are the number of people who actually lost their homes. It is a national disgrace.
But things are getting better slowly, just as with everything else. The Republicans are fighting hard to avoid anything that would cost money that the super-rich or the mortgage bankers or the six big banks with assets equal to half all the country’s assets might have to pay for.
The President was able to have the Justice Department start the process by threatening jail to a lot of these crooks and the result was the first step…$26 billion in reparations which comes to something like an average of only $2,000 per homeowner involved. But, according to the Attorney General, there is more to come.
The economy is moving in the right direction. For example, no industry is more important to moving things ahead than our largest, the auto industry. General Motors announced a $9 billion profit for 2011, a huge profit, the largest in GM history, which caused a sharp spike in their stock, which means a higher return on investment for the government.
The other automakers similarly had very good years last year. Things are moving again in Detroit, with more and more factories being filled. No thanks to the governor of Michigan, who would have been happy to let the entire industry go down.
The auto industry is not the only category in U.S. business looking toward a good year. The U.S. apparel manufacturers see a good year, the robotics industry, travel industry, home improvement industry, food, metals, lasers….all kinds of businesses, including commercial construction which depends on increased business activity and new leases for its business to grow.
What could happen to slow things down? Congress. Republicans are hell bent on cutting back on government right now, rather than spreading cuts over a ten-year window as most economists recommend. Nobel Laureate Dr. Joseph Stiglitz is adamant that we not cut heavily into our government resources for the development of business until we are certain that we are on a strong upward path. Nobel Laureate Dr. Paul Krugman maintains that we should be stimulating the economy to ward off the possibility that many who have been out of work a long time do not lose touch with the working environment.
The important thing is that the economy is growing, slowly but surely, and what we need to guard against now is what we should have been guarding against in 2007. We must be sure that someone is watching Wall Street to insure that the new rules in stock trading are observed and that banks follow the rules and that the investment community does what it was designed to do…help stimulate the economy through prudent loans to business.
Your job is to be vigilant. You must watch for signs of corruption, shaky investments and an unreasonable reluctance to lend money to small businesses. These are signs that we could fall back into a double-dip recession.
While things are not growing fast enough, the bigger problem would be if they were not growing at all…but receding. That would be a big problem.