Saturday, July 9, 2011

Regarding what's "on the table"

The June job figures show employment continuing to crash, even as corporate profits increase. Is anybody surprised? The profits are coming mainly from overseas, although "productivity increases" here at home (automation plus increasing worker exploitation) aren't hurting at all.

In his column in yesterday's Times, Paul Krugman pointed out that the president is running very low on economic advisers, and wondered if the political advisers — who, like Obama himself, seem to know very little about economics — might be exerting too much influence. Given the quality of the economic advisers he used to have, I suspect there's not a hell of a lot of difference, but I'm hoping somebody can communicate some sense to him.

First of all, somebody has to pound it into his thick skull that we are not dealing with supply-side problems. It doesn't matter how many tax cuts and tax advantages government tosses at business — they'll just take the money and sit on it, or use it to buy back their own stock or take over other businesses (with concomitant staff "consolidations") or distribute it as dividends to shareholders. None of it will be used to create jobs in the United States as long as Americans can't afford to buy their products.

(The political advisers, of course, will point out that some percentage of "independent" voters have swallowed the supply-side line, and will encourage Obama to "get out ahead" of the Republicans. Obama once said he'd rather be a good one-term president than an ineffective two-term president, but I suspect he was either lying or self-deceiving at the time. I don't have a lot of confidence in Obama — or any of our current political elite — putting the country ahead of their own ambitions.)

If we disregard political ambitions and corporate contributions (har de har har), it makes absolutely no sense to give the corporations "tax amnesty" for bringing overseas profits back to the United States. We tried it back when Bush was president, and all it did was create a great deal of moral hazard, inevitably leading to the current proposal to do it again.

It also makes no sense to cut entitlements, which would serve chiefly to further reduce demand, and make our employment problems even worse. If Obama really has Social Security and Medicare "on the table" in the current talks with the Republican leadership, let's hope he's feeding them a line of bullshit no less stinky than the line they're feeding him about the possibility of increasing tax levies on the plutocrats.

Shit, nobody in either party wants to tax the plutocrats! They are the plutocrats! (Where's the IWW when you need it? We need it now.)

No comments: