Boundless Stupidity July 8, 2010Posted by Dwight Furrow in Dwight Furrow's Posts, politics.
Tags: Barack Obama, Ronald Reagan
Obama may be the first President in history to face three simultaneous disasters: the economic crisis that may plunge us into a depression, ecological disasters, in the short run caused by the BP oil spill and in the long run by climate change, and the perpetual wars in the Middle East that waste our human and financial resources.
The most immediate threat to our welfare is the call for governments to reduce budget deficits during a time of sluggish growth, extremely high unemployment, and moribund housing and financial markets. Budget deficits are bad if they cause investors to demand higher interest rates or they cause inflation to increase substantially. But there is utterly no evidence that interest rates are increasing—interest on government bonds is at record lows. And no inflation is in sight. In fact some economists are predicting deflation, which will be devastating to the economy and is more likely if governments stop spending. Calls to reduce budget deficits are nothing but right-wing ideological claptrap.
The effects of the oil spill will be felt for decades on the Gulf coast and will be followed by the gradual collapse of our ecosystems around the world as the effects of climate change accelerate causing massive economic and social dislocation. Meanwhile we dump billions of dollars into wars without purpose and with no end in sight.
Jonathan Taplin recently posted a summary of how we got into this mess that is spot on:
…since Ronald Reagan, a conservative mentality has gripped our country that rejected Nixon’s embrace of environmentalism and ignored the laws liberal Republicans had helped pass to protect the planet. Since Reagan a Neo-conservative foreign policy elite has rejected the warnings of Dwight Eisenhower and built a war machine unprecedented in world history and projected American power throughout the Arabian Gulf region at a cost of $1 trillion per year. And finally a conservative group of economists (The Chicago School) has empowered a group of Bond Traders (the Vigilantes) into threatening our government (and others around the world) to slash spending at the very moment our economy is poised to plunge into a depression.
The Bond Vigilantes Taplin is referring to are global investors (the people who caused the financial mess) who now claim that unless governments reign in their spending they will stop buying government bonds. As the record low interests show, this is bunk. Investors seem to like U.S. bonds just fine. But it is influential bunk—the public as well as the business community have bought into the idea that government spending is inherently bad. If we act on their recommendations it will send the U.S. economy over a cliff.
As Taplin notes: “And ironically, when you look at the chart above, it’s so clear what caused the deficit—the Bush tax cuts and the wars in Iraq and Afghanistan.”
Here is the chart Taplin refers to:
The share of the deficit caused by Obama’s attempts to stimulate the economy are miniscule when compared to Bush era military spending and tax cuts.
This has to be the biggest con in human history. Conservative policies nearly destroyed this country and the public blames Obama while clamoring for—more conservative policies. The utter stupidity of the American public is boundless.
We deserve what we get.
For political commentary by Dwight Furrow visit: www.revivingliberalism.com