by Jan Baughman
(Swans - January 28, 2008) While the terror talk of the last six years has succeeded at brainwashing a now fear-stuporous populace into thinking War is Peace and Shopping is Patriotic, no amount of hyping a strong US economy could make it so, what with unfettered military spending, tax cuts for the wealthy (weren't they intended to stimulate the economy?), the subprime lending crisis, the increasing trade deficit, rising unemployment, increased energy costs, to name a few. So once again it's time to get creative and make a swift, bold, preemptive attack on recession, pretend a quick fix is all we need, take advantage of the opportunity to give more tax breaks to corporations, and of course, throw a few bones to the working-class dogs.
Recall April 2001, even before the War on Terror fully opened the drain that's sucking the lifeblood out of America, when the economy needed stimulating? Credit card debt had skyrocketed, threatening a slow-down in consumer spending, so the Bush administration began promoting a $1,600 per tax-paying family refund that it boasted could cover two months of mortgage; or a year's tuition -- at community college, of course; gas for two cars for a year (gas averaged a quaint $1.70 a gallon and oil $23 a barrel back then!); or two years' worth of electricity. Or, according to my recommendation, one could invest that money in 45 shares of Lockheed Martin. By the time the political wrangling was settled in July, that $1,600 had become a paltry $600 for the kids' school supplies, or 16 shares of Lockheed Martin.
Despite the trickle-down voodoo economics, from the 2001 emergency fix to 2006, consumer debt rose 67%, compared to an increase of only 20% in corporate debt -- suggesting that as the people shop themselves into a hole, there remain some instances in which corporations are still better off as corporations than as individuals; for example, when it comes to trickle-up economics... Meantime, had we invested in those 16 shares of Lockheed Martin, our $600 would now be worth $1,696 -- a 183% increase in value in less than seven years!
Instead, we've seen our dollars shrink, incomes stagnate, cost of living skyrocket, as we (the people) carry more and more of the economic burden of funding our country's operations. How much more can be siphoned from the poor and middle class? Why not just cut out the middlemen, give workers a fixed stipend, and seize their "discretionary" income directly rather than filtering it through overhead-heavy scams such as fake economic stimulus refunds, lotteries, and casinos? Here in California, the February Primary ballot is stuffed with propositions to increase the number of slot machines at four Indian Gam[bl]ing casinos, and direct more of their profits (known to the gam[bl]ers as "losses") to the state for education and the like...
Meanwhile, San Francisco is proposing a $1 toll increase to the already $5 cost of crossing the famed Golden Gate Bridge in order to counter a $91 million shortfall in the transit district budget. Coincidentally (or not), every news report on the matter points out that the toll in 1937 was $1, extrapolating that by today's standards it would be a whopping $14.06 in order to make us feel like we're still getting a bargain at $6 a crossing, yet also failing to mention that wages have not kept up with inflation, and in fact, over 10 years, the average worker pay has declined 7% while CEO compensation has risen 45%, or that in the Bay Area, the cost of living index is 177% compared to the national average... On top of it, we pay handily in auto repairs and new tires, increased fuel cost and decreased fuel efficiency, for the privilege of driving over pothole-pitted streets to get to and from our shrinking jobs that are further and further from the houses we can't afford. That's the sheer brilliance and ultimate beauty of the American Myth -- it truly is only a Dream: The majority breaks its back and its bank to keep the system functioning, while the minority reaps the profits that the system generates!
So on to the current "stimulus" package that was again introduced by Mr. Bush at $1,600 per family (which, ironically, would have purchased sixteen shares of Lockheed Martin in mid-January!), but was soon whittled down to $1,200 in order to reach more families with less money (i.e., those who would be most likely to spend it most quickly). "Letting Americans keep more of their own money should increase consumer spending, and lift our economy at a time when people otherwise might spend less," our learned president advised, without explaining how we can keep our cake and eat it too. The two parties are congratulating themselves for reaching a swift compromise in their differences, and agreeing to this bold package before it's too late and before the next congressional holiday. The Republicans are happy because "extraneous spending" on silly things like food stamps, unemployment, and infrastructure was omitted; or as Speaker Pelosi characterized the deal, it helps not only the middle class but "those who aspire to be in the middle class." Who knew that $1,200 was the price of a one-way ticket to the middle class -- or do those $1,200 simply provide aspiring middle-classers a one-time taste of a middle-class shopping spree?
Here is a suggestion: this is the perfect opportunity for 117 million households to vote with their wallets and lobby en masse without an insider ticket. Let's really do it this time -- let's skip the trip to the Mall and boycott the government-mandated, instant-gratification spending spree; instead, invest the money just like the big boys would. Put it away for a rainy day. Let's buy those 11 shares of Lockheed Martin, and beat them at their own game. I'll bet you one share (locked in at $106) that if 117 million or so of us refuse to shop with the refund, it won't take another seven years for the next stimulus package to appear. Perhaps the next one would provide some genuine, long-term benefits to the economy, and to the majority of us that suffers its inequities.
Forty-five Shares Of Lockheed Martin, Jan Baughman, April 16, 2001
Sixteen Shares Of Lockheed Martin, Jan Baughman, July 9, 2001
President Bush Discusses Economy, Growth Package, January 18, 2008
Credit Market Debt, 1997-2006
United for a Fair Economy, 08/29/2007
Cost of Living Index -- http://www.infoplease.com/ipa/A0883960.html
"Tentative Deal Reached on Stimulus Plan," New York Times, January 24, 2008
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