Upside Down Conventional Wisdom

Some things are impossible. (0.00 / 0)

1) It's not possible to spend $800 billion responsibly in one year.  That's why the stimulus is a multi-year endeavor.  Let's remember that the 7-8 year Iraq adventure only cost about $200 billion more.  Which is not to say that spending slowly guarantees responsible spending, only that time is significant.

2) Since the total annual federal budget is about $3 trillion, we're looking at an increase, between 25% and 30%, of dollars that have to be supervised by a presumably eviscerated federal bureaucracy.  Grants to states presume that state supervision will be adequate.

3) Our private non-financial corporations are now sitting on/hoarding something like $837 billion to $1.5 trillion in profits, instead of investing, hiring or filling up their pension funds to keep the money circulating.  When private corporations are siphoning off the equivalent of half a whole year's federal expenditures, there's no way that an infusion of federal dollars can compensate.  What Washington has been doing is the equivalent of topping up the oil in a car which a prankster is draining over-night.  The prankster has to be stopped.

4) How much money financial corporation are sequestering seems to be unknown, perhaps because they don't have to provide data to the public, unless they're in financial trouble.  Goldman Sachs regained its "liquidity" pretty damn quick when the Treasury wanted to have a look at the books.

5) I think our private corporations are playing a game of chicken with the public one.  If you look at the data compiled by the Federal Reserve Bank in St. Louis a couple of things stand out:
   a) U.S. Government Demand Deposits and Note Balances have collapsed to 1960s levels.
   b) the velocity of money, the number of times a dollar changes hands, resembles molasses
   c) deposits from foreign commercial banks are as high as the previous high in 1982 and demand deposits from foreign governments are coming down from an all-time high at the beginning of this year.  I don't know what it means, but it suggests that foreign entities have confidence in the U.S., but our government is withholding money from our commercial banks and depository institution, from a high of $58 billion in 2000, they're now down to $5 billion.  

President Obama said the other day in Ohio that, if corporations don't invest and hire, they could, at least satisfy their pension fund obligations, which haven't been met because the corporations counted on earning between 8% and 10% to make up for their lapsed contributions.
It's my sense that the Social Security discussion is an opportunity to focus on other pension programs which the private sector has allowed to collapse.
But, you can't make corporations pay more into the private funds by threatening to cut the public program.  Corporate managers just don't care.  What they do care about is autonomy and power and that's why they resist paying taxes.  Somehow they've gotten the notion that the public corporations which create them want to do them in.  It makes no sense.  But then, neither does the son who argues he'd do just fine if dad would hurry up and die.

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by: hannah @ Sun Aug 22, 2010 at 09:12:27 AM CDT

This is important (4.00 / 1)

Our economy is not working.  At least not for the rest of us.  We are being blackmailed by the corporate sector.  Not a good place from which to move into a challenging future.  
I fear for my grandchildren.  

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by: Lucy Edwards @ Sun Aug 22, 2010 at 10:01:44 AM CDT

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Don't be afraid. (0.00 / 0)

One thing about the greedy individualists is that they're not very good at passing on their values to the next generation.
The people who predicted that the youth vote would be significantly different in 2008 were correct.

The Sesame Street generation want to be connected.  They're not traumatized and self-centered like the baby-boomers.  I don't know what did it, but I remember in 1962, when the first post-war crop arrived at college, they were significantly different, somehow not eager to be connected--and this was in a Catholic college for women in Western Pennsylvania whose population might be expected to be rather conventional.  
And, definitely, it was the class entering in 1962.  Our "little sisters," who came in in 1961 were just like us, the 1959 class.  The class of '66 came in non-compliant.  They're now 65.

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by: hannah @ Sun Aug 22, 2010 at 11:42:21 AM CDT

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