Posted by: David Offutt | November 13, 2010

The Return of the Plutocracy: The Elections of 2010

The economic meltdown and the loss of jobs were only part of the multitude of crises left to Barack Obama by George W. Bush, but the creation of jobs was probably the most important.

In times of crisis, Americans have traditionally rallied behind our president in a spirit of national unity. After Pearl Harbor and after 9/11, even Franklin D. Roosevelt’s and George W. Bush’s opponents wanted each of them to succeed. However, after the September 2008 economic catastrophe and the subsequent massive loss of jobs, there has been a concerted, sociopathic effort to prevent President Barack Obama from being successful. We need to ask “What’s going on here?”

George W. Bush’s finest hour as president was his approval of the Troubled Asset Relief Program (TARP). Although he bailed out a bunch of greedy, irresponsible banks and bankers, he also prevented a global economic meltdown. Fortunately for Mr. Bush, amnesiac voters blamed President Obama for his bailouts. Obama did bail out General Motors and Chrysler, and he’s hated for that, too. Much of the bailout money has already been repaid and, so far, we’ve avoided slipping into a 2nd Great Depression. Sadly, many voters and politicians have acted as if they really want us to have another Great Depression.

Everything done to prevent the Great Recession from getting worse has met a constant response from the Fox “News”-Republican-TEA Party: “Don’t do anything!” The stimulus bill in early 2009 was the first priority, but it had to be extremely watered down just to get a couple of Republican votes. The Restoring American Financial Stability Act of 2010, which is intended to prevent another Wall Street meltdown and bailout, was passed in spite of a Republican filibuster in the Senate.

One of the most frequently repeated Big Lies is the one about “the failed stimulus bill.” True, it only created or saved 3.3 million jobs when we needed at least 10 million. Yes, it prevented a lot of states from laying off many employees and teachers, but some states still cut too many positions. But it definitely helped stop the bleeding, and where would we be without it? When you see construction sites with signs stating “Project Funded by the American Recovery & Reinvestment Act,” how many of you are aware that that’s the stimulus bill at work?

The stimulus bill and the American Recovery & Reinvestment Act are the same thing.

I personally benefit from three such stimulus projects: (1) Ever since I began my daily commute to Camden in 1994, I have lamented the inadequacy of the El Dorado By-Pass – now, the 4-laning of Hwy 7 around El Dorado is finally going to be completed! (2) The Adult Education Center of SAU Tech where I work is currently located at the Ross Center, which is also used for large community events. Thanks to the stimulus bill, a parking lot suitable for such a facility was completed last summer. (3) SAU Tech acquired a building in downtown Camden to be the future home of its adult education program. Thanks to the stimulus, the renovation project should be completed sometime in 2011.

Other than not being twice the size it needed to be, a criticism by economists of the stimulus bill was that nearly one third of it involved tax cuts instead of a greater number of job-producing projects. For many, the tax cut came in the form of less taxes being withheld from their paychecks. When it first kicked in, everyone asked, “How much more did you get this month than you got before.” In my case, the extra amount almost matched the increase in my monthly El Dorado Water Utilities bill that went up at the same time. Therefore, I didn’t get to add to my local purchases, which was the primary purpose of the tax cuts.

Incredibly, a recent poll found that only 8 % of the American people are aware that 95 % of us got the Obama tax cuts! This is carrying the amnesia defense to an extreme! Economists, like Paul Krugman, were right: the tax cuts were nice (although forgotten), but greater spending on our deteriorating national infrastructure and more aid to states would have produced and saved more jobs.

So why has the Fox “News”-Republican-TEA Party been so determined to prevent spending that would save and produce a huge number of jobs and revitalize the nation? The answer may lie in the results of the mid-term Elections of 1934.

The Republican guru of trickle-down economics in the 1920’s was Commerce Secretary Herbert Hoover. As president, he presided over the first three and a half years of the Great Depression. When Hoover left office in March 1933, Democratic President Franklin Roosevelt inherited an economy that had hit rock bottom.

FDR and the Democrats inherited the Great Depression from Herbert Hoover and the Republicans and replaced despair with hope.

FDR and his Democratic majorities in both houses of Congress initiated the New Deal, which was a massive three-pronged program of Relief, Recovery, and Reform. FDR was despised by the plutocrats (the very rich) because they had to pay more taxes, but he didn’t cower from their attacks. By the time of the Congressional Elections of 1934, the people were so encouraged that the Democrats actually gained 9 seats in both the House and the Senate, which is contrary to tradition! Because of the New Deal, Democrats held the Congress until 1946 and the presidency until 1952.

When Bush-Cheney left office in January 2009, the nation was in such a mess that we needed another FDR. If Obama and the Democrats succeeded, the Republicans and their plutocratic constituents knew what that could mean. This time, the plutocrats were ready. The Elections of 2010 would be no repeat of 1934! Zillionaires like Rupert Murdoch with his Fox “News” and the Koch Brothers with their Americans for Prosperity sprang into action promoting TEA Parties and town hall hysteria. The five Republican justices on the U.S. Supreme Court chipped in with their “Citizens United” ruling that gave corporations the right to contribute anonymously to election campaigns! The plutocracy certainly succeeded in preventing the Democrats from creating the number of jobs expected, and the party of “Hell No!” regained control of the House.

The Republican leader in the Senate, Mitch McConnell, has publicly stated that making Barack Obama a one-term president is their primary goal. Look for an extension of the Bush tax cuts for the wealthiest 2 %. Those tax cuts for plutocrats will prevent both job-creation now and deficit-reduction in the future. That should lead to a long-term “Great Jobs Depression,” for which they could blame Mr. Obama. If that works, the radical-reactionaries should accomplish a takeover of the Senate and White House in 2012.

For dozens of years, many voters who had lived through the Great Depression had a hard time voting Republican because of Herbert Hoover. If President Obama can also be equated with “depression” in the same way, the plutocracy – rule by and for the rich – could be in power for years to come. Karl Rove – “Bush’s Brain” – may get his dream of a “permanent Republican majority” yet.

by David Offutt
A version of this essay was published November 13, 2010, in the El Dorado News-Times as a letter to the editor.

Advertisements

Responses

  1. You stated: “George W. Bush’s finest hour as president was his approval of the Troubled Asset Relief Program (TARP). Although he bailed out a bunch of greedy, irresponsible banks and bankers, he also prevented a global economic meltdown. ”

    Did the TARP prevent a meltdown ? What would have happened if we had merely let the banks fail, as Iceland did ?

    Would there have been a 1930’s style run on the banks ? Not likely, since deposits are insured by the FDIC (one of the few New Deal banking regs that Clinton left in place).

    Would more banks have failed ? Yes, but again, deposits are insured, and Joe Average would not have been hurt. Rich people who invested in the failed banks would have lost money, but isn’t that how capitalism is supposed to work ?

    Economist John Maynard Keynes never advocated bailing out investment banks and then rewarding their CEOs with big bonuses.

    Don’t we need banks to make loans to consumers and businesses to stimulate the economy ? Yes, but despite the bailout, loans have fallen off a cliff. Instead of using the bailout money to make loans to businesses and consumers, banks have been using the money to play the stock market, or to speculate in derivatives, gold, oil, and other commodities. As a result of bailout money being used to speculate in commodities, we’re paying more at the supermarket for basic food items ! ! !

    New Deal laws prohibited banks from using deposits to make risky investments, until mangy Blue Dog Bill Clinton did away with Glass-Steagall and other proven regulations. Despite the disaster that has unfolded since deregulation, Glass-Steagall still has not been reinstated ! ! !

    You stated: “so far, we’ve avoided slipping into a 2nd Great Depression.”

    Have we ? Bear in mind that mangy Blue Dog Clinton changed the accounting rules for unemployment statistics, to make unemployment numbers look better than they really are. The official unemployment is around 10%, but using the pre-Clinton accounting rules, real unemployment is around 22% — about the same as the Great Depression ! ! ! You can find the pre-Clinton stats at http://www.shadowstats.com/alternate_data/unemployment-charts.

    Thanks to what’s left of the FDR-LBJ safety net, people aren’t starving yet, though we do have people living in tent cities, or, in the case of Las Vegas, living in the sewer tunnels beneath the casinos. This is what you’d expect to find in a 3rd world country, not the U.S. ! ! !

    Economics is a complicated subject and I can’t explain our current mess in one paragraph, but we identify the root causes. 1) a financial bubble whose roots lie in Clinton-era deregulation. Banks loaned too much money, people borrowed too much money, now there has to be a correction, as people reduce their debts and banks increase their reserves. A correction is not optional, it MUST happen, and it could easily take a decade to play out, as it did in the 1930’s. 2) destruction of the middle class by de-unionisation and free trade. Manufacturing has moved offshore. There is no plan to bring those jobs back, none whatsoever. 3) shift in wealth distribution to the very wealthy, due to Reagan/Bush/Obama tax cuts, cuts in domestic spending, and the decline in manufacturing. Wealthy people spend only a small percentage of their money, while the rest of us have less to spend, so overall demand is down. It’s 1929 all over again.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: