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Economy - Time for a Plan B, ASAP

by nb41 Mon Sep 27th, 2010 at 11:13:52 AM EST

Here's another eye-opener on the cause of the Great Recession, and one of the reasons why appeals to private industry to employ people with their hordes of cash ($1.8 TRILLION last heard of) will lead to naught. Industry really no longer cares about employing people, as "social contracts" now appear to be so "yesteryear" ....

http://www.dailykos.com/storyonly/2010/9/27/905593/-Krugman,-Morgenson-Nail-Wall-St.-Jobless-Lies,-M ortgage-Fraud-

So, if oodles of tax credits and tax breaks won't employ people at a rate that is SOCIALLY REQUIRED, maybe it's time for Plan B. Maybe the Federal govt needs to directly employ a few million people for a few years doing necessary things, like building passenger rail at a prodigious pace ($100 billion/yr type rates). This is something that will directly replace petroleum used in cars and airplanes, and private industry is incapable of operating passenger rail in this country (or just about any country).

Remember, the U.S. emits more CO2 pollution via burning diesel, gasoline and kerosene (jet fuel) than from burning coal, and by a considerable amount. And the U.S. exports about $330 BILLION/yr just to import petroleum and petroleum cuts; this is the largest single import item, and it is definitely a major "bleeding" of money from our economy. And less demand for oil means lower prices, too.

Other ways for direct governmental expenditures would be for governmental (Federal, State, local) OWNERSHIP of some renewable energy generation projects such as onshore wind farms. Instead of bribing huge companies (often foreign companies, too) and/or really, really rich people with tax credits and tax deductions, just cut out the middle man/speculator class out of this altogether.

And of course, then there is the Feed-In Law approach, which is tailor made for all sorts of private investment (local government, too). This is because Feed-In Laws lead to a stable investment climate by taking away the completely valueless added gambling that goes on when electricity prices are based not on the cost of production, but one how much can be extracted from customers. Feed-In Laws actually lead to lower installed costs for renewable energy by lowering the risk premium associated with unknown future electricity prices - often unknown and unknowable due to unknowable fossil fuel prices. See http://wagengineering.blogspot.com/2010/09/hardscrabble-wind-fram-bit-of-mystery.html . Cut the costs of running a renewable energy system with bribes to big companies/rich people, by eliminating the need to bribe them.

Anyway, a hint to the Obama administration. If they (Corporate America) won't do it (create jobs, start hiring millions of people really fast), somebody else will HAVE to. Whoever does will get really popular, really fast (though they will be hated by the rulers of Corporate America - tough). And until the Federal Government steps up to fill in the gap left by Corporate America, they will remain pretty unpopular among the Democratic Party base. Maybe because it is NOT the time to wimp out.

What's so difficult to understand about that?


What's so difficult to understand about that?

The thing most find difficult to understand is how they will get elected/re-elected without corporate contributions to their campaigns. It is a bi-partisan problem with two corporatist parties. Marshall Auerbach characterized it thus in naked capitalism:

The corporate elites in this country saw Bush driving the country off a cliff, so they concocted an allegedly "post-racial" moderate Democrat to stabilize the system and obtain Democratic buy-in on issues like perpetual war, and a government as feeding trough, which has facilitated ongoing corporate predation. The same elites began to use the media to focus on distracting non-issues like Obama's birth certificate, Muslim mosques, and the like to divert attention away from the only real issue: the political economy of the garrison/predator state, ignoring the manner in which Obama has consolidated it with bipartisan buy-in.

Likewise on domestic policy, we spent months focusing on death panels in health care, ignoring the more salient fact that the White House never wanted a public option in the health care bill, which explains why Rahm said so early last summer. Why? Because the big insurance companies did not want it, so Rahm did not want it. End of issue.

Financial reform has been similarly disappointing. Any private investor who had put as much as the government has put into faltering banks would have far more supervision (board seats, probably regular operational reports) and would also have replaced the CEO, with an understanding that he could clean house if he saw fit. Getting a new CEO in is usually standard operating procedure with distressed organizations, but the Treasury and Fed have continued to write checks and frustrated any serious attempt to make inquiries. Cover-up has been the hallmark. Why else implement a financial reform bill without at least exploring the cause of the crisis in the first place? Look at the contrast with the treatment of GM and Chrysler, which were asked plenty of tough questions and required to submit turnaround plans that could be rejected or be revised under duress.

Leaving aside the economic and political costs of the policies undertaken by President Obama, there is a much more profoundly corrosive social effect at work here. There is a pervasive sense that people who have played according to the rules are being persistently jobbed by this Administration - this has begun to perpetuate a feeling of "they've got theirs and now I want mine." It's hard to quantify the impact of this growing mentality, but it is the kind of phenomenon often manifests itself via widespread tax evasion and a corresponding loss of political legitimacy on the part of a government in other countries.

This will only change when enough people both refuse to vote for either corporatist party or any candidate that is not pledged to take down the current corporatist dominance and when there are such credible alternatives for whom to vote. This could be a Reform party pledged to change the existing system regardless of threatened consequences or it could be separate left, center and right wing parties who collectively are pledged to the same goal and who cooperate legislatively to accomplish that goal. The goal could be brought about by a blocking minority who would prevent the next big bailout and allow the current system to collapse. That may be the only way real change happens.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Sep 27th, 2010 at 12:29:19 PM EST
Employing people ? It's so un-american

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Sep 30th, 2010 at 07:29:35 AM EST

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