Government by Default

Corporate leaders, right-wing media moguls, speculators, bankers and hedge fund managers were all cheering as the election returns rolled in. Oh, they had their little disappointments, both in California and New York. The oil companies suffered the most, having spent well over a $100 million to repeal California's global warming law: their proposition failed.

Generally, big business won, defense won, and the American people were sold a shoddy bill of goods. What did the people vote for? Kicking the bums out. According to Pew's polls, the economy, i.e. jobs, was by far the most important issue (to 61%): what people wanted was more of them. Repealing health care reform, or substantially changing it was important to only 21%.

However, John Boehner, new Speaker-designate, vowed that a health care repeal bill was the first order of business. And what will Republicans propose as stimulus, to create jobs? Cut taxes, or specifically, make the Bush tax cuts permanent, including tax cuts for those poor mites who earn more than $250,000 a year, and even for those heroes of enterprise who earn a $100 million or more. That is supposed to create jobs, but corporations are already rolling in money, even as they lay off more employees.

The Fed's response is to go big ($600 billion) on Quantitative Easing, or creating money. Fed chief, Bernanke, nearly pleaded with Congress for greater fiscal stimulus, but he could see that Congress isn't going to pass one. Ironically, it may increase the deficit by cutting taxes and pushing for a more aggressive defense policy. Cutting "waste" is a fraud, and even Republicans know that.

So, how are Republicans going to solve the jobs issue? They can't; they will make it worse, so they will continue their diversionary politics--and blame all our troubles on Obama.

Meanwhile, the corporations are getting exactly what they paid for. Stalemate in Washington means: no interference, unilateral control over their own multinational estates and their pursuit of maximum profits, everywhere.

What corporations really want? Government to concern itself only with protecting them and their assets, both at home and abroad, but certainly not to concern itself with the people's welfare: ultimately, corporations want to control that, too, for a profit.

How would workers fare under unrestrained corporate rule? Forget about minimum wages, maximum hours, safe working conditions, or safe food and drink. Forget about a chance to "make it rich," an American dream that fools many into supporting the corporate agenda. Only a tiny elite will "make it," and most of them will come from the already elite. Everyone else will be overworked and underpaid, or cast off to survive however they can, including crime. Security companies should thrive! So should private prisons.

America's Roman Senators just took a giant step towards our equivalent of the Fall of Rome.

Robbers (Almost) in Charge

You really do have to wonder, with a Democratic House and Senate--stalemated by a Republican minority--how a bill to retroactively legalize faulty foreclosures could slip through just before Congress went home. It legalized wholesale larceny! It didn't become law, because there was one honest man who could stop it: President Obama refused to sign it, a pocket veto.

And then there's the prospect of quantitative easing (QE2=printing money) by the Fed. Responsible economists agree: the economy needs more stimulus. The stimulus we've had was only enough to keep us from falling off the cliff. To get out of the high unemployment doldrums, a massive amount of money must be spent. There are two ways to do so. One is to invest in the nation, to increase everyone's wealth--green jobs and industry and updated infrastructure: a second fiscal stimulus. However, with political stalemate, it would be DOA in Congress the minute Obama mentioned it.

So, the other option is for the Fed to print money. This will probably stimulate some people in the economy--the bankers, already rolling in dough! QE 2 would create more money to buy up mortgage-backed securities, so that banks would then have money to--loan more money to the hoi polloi to stimulate the economy? Hah! How about gambling on Wall Street and the commodity exchanges, or investing in booming countries elsewhere? The Fed doesn't require the bankers to spend their new money domestically; they can spend it wherever.

That's one reason why a Fed stimulus is much less effective than a government stimulus; it has what economists call significant "leakage," like heating a house that's full of holes. Further, a Fed stimulus would exacerbate inequality, already at its highest level since 1929. The Fed would be giving banks trillions of dollars and saying: get even richer!

Would this 'stimulus' help ordinary folks? If it creates jobs, but fewer would result than you'd expect for the trillions of dollars created. If QE2 succeeded economically, homeowners might be able to stay in their homes; foreclosures might stop. Ultimately, that could create jobs, as the real estate market rebounded, but it would take awhile. How much of the stimulus would ordinary people see? Not much. QE2 could also unleash inflation, although deflation now is the greater danger.

What it really looks like: gangsters are in control. Not Mafia. No, these gangsters aren't so honorable. They're the bankers, investors, corporate leaders and politicians pillaging the nation, driving the American empire into poverty, while reaping windfalls. How else do you explain Congress passing the Interstate Recognition of Notarizations Act, legalizing illegal foreclosures?

How much can one man (Obama) do to stand up to organized crime on such a scale?

The prescient have already abandoned ship for places like Taiwan, or Belize.