Monday, January 26, 2009
Hearts and Wallets
The Public Debate seems to be headed towards a climax rather rapidly. I don’t know if it is Fate or clever politics. Whichever it is, no one should doubt the stakes. We -- all of us, the entire world -- are “all in”.
If you watched Fareed Zakaria this weekend (as I suggest you do every weekend) you saw him open his show with the remark about our economy “teetering” on the edge. Mr. Zakaria is not an economist. He’s just really smart and talks to others that are too. Remember this from a post last week ?
NIALL FERGUSON, HARVARD UNIVERSITY AND AUTHOR, "THE ASCENT OF MONEY": We are now in a financial crisis that bears comparison with the Great Depression. Nobody should have any doubt about that.
Unemployment is currently 7.2%. Most projections expect it to reach 10%. During the Depression, unemployment hit 25%. That shouldn’t provide much comfort. The tipping point -- the point that seems to scare the experts -- is somewhere around 10% unemployment. I suspect that the various people doing these calculations know what they mean and can’t bear the thought of projecting 12% or 15% unemployment -- knowing what the consequences of those projections would mean.
And unemployment leads us to the central debate -- What do we do now ? What kind of stimulus do we provide to the country ? The two camps are divided into:
(1) Using government spending to create jobs.
(2) Providing tax cuts to spur economic growth (through consumption.)
In my mind, it’s the same debate we’ve been having. The tax cut side (the Republicans) have been winning the debate for 30 years. It has provided us with a crushing national debt, a culture of greed and a near Depression. I’m ready for something new and I believe the election of President Obama means the rest of the country is ready too. The Republican Party (of course) doesn’t see it that way.
President Obama made his remark about Rush Limbaugh last Friday. It turns out that Mr. Limbaugh and his ilk had been misrepresenting comments made by Robert Reich about a stimulus plan. Speaking of Mr. Reich, you’ll see his blog listed among my favorite links on the left side of the page. Today’s should read:
An Open Letter to Rush Limbaugh, Sean Hannity, and Michelle Malkin
I believe the fact that I have Mr. Reich listed and I don’t have any links to Mr. Limbaugh says all I need to say about that. And as to Mr. Hannity, I’ve already told you how I feel about him.
In addition to Mr. Reich, I have Paul Krugman’s blog listed. As my readers know, Mr. Krugman is a columnist for The New York Times. He weighs in on the larger argument with his column today also.
Bad Faith Economics
”Conservatives really, really don’t want to see a second New Deal, and they certainly don’t want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.
Some of these arguments are obvious cheap shots. “
You should read the whole piece. It’s a good, simple explanation of the choices we face with the economy. As an additional teaser, Mr. Krugman mentions air traffic control.
The Public Debate is in full swing. I believe it is obvious where I stand. I, like everyone else that participates, am trying to win hearts and minds. You should realize that your wallet is at stake too. Again, don’t forget the history of the last Depression. There was world-wide turmoil. From the crime wave epitomized by Bonnie and Clyde to World War II -- economic troubles led to social troubles. The decisions being made today are monumental. It is critical that we make the wisest possible ones.
I believe Rush Limbaugh is nothing more than a loathsome demagogue. Unfortunately, he is a very talented one. Still, with the fate of the world hanging in the balance, it’s hard to believe anyone would take him seriously.
January 26, 2009