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Web Letters | The Nation

Web Letter

In the face of a ruling conservative coalition in Congress and a raft of companies that practice legal bribery in order to get legislation to benefit those companies or to block progressive legislation, we progressives need to take the political fight to these companies that fund and legally bribe conservatives in both parties in Congress.

If people view this website, you can learn how to organize huge consumer boycotts against major companies that give money to conservatives and demand real progressive legislation from these companies or they will lose a lot of progressive people's money.

I have a saying that I created a few years ago: The conservatives in both houses of Congress appear weak and vulnerable at the cash registers of those companies that give them money.

Thank you for reading my views.

Dennis Baer

Bethpage, NY

Nov 28 2009 - 5:00pm

Web Letter

How to get out of the morass we're in when the banks don't lend and unemployment is high?

These are signs that the economy is stuck--basically, it's spinning its wheels. When business won’t invest, someone else has to take up the slack, or else the economy nosedives. The only "someone else" is the government. And just as the government printed trillions of dollars to help Wall Street, it must do the same for Main Street. Anything else and we face the abyss.

Howard Kaplan

Belmont, MA

Nov 27 2009 - 1:55pm

Web Letter

I don't get the claim that more debt will get us out of our miserable financial bind. With or without jobs programs, we owe more than we ever have before, much of it to China. Inevitably, debts lead to inflation, as interest rates must rise or we can't to borrow more--just to pay the interest already owed, for pity's sake.

No one buys US government bonds that pay little or no interest. Average Americans can't afford to, even if the bonds paid double-digit interest. We're too broke paying either health insurance, health bills or both--plus housing costs that take an average of half our income, not the required third to make us solvent. Foreign governments don't want to buy our bonds, when they can make more speculating on other investments. So governments want inflation/higher interest rates, to get other countries to buy their/our debt as an "investment."

Once interest rates rise, inflation once again cripples our economy and poverty rises exponentially. We can't reverse that until our wages match inflation. Right now, we can't even get government to admit there's inflation left over from before interest rates for banks fell to zero!

So what kinds of jobs will we demand, and get, and at what wages? Current wages are simply making average Americans fall farther and farther behind. Building the infrastructure would be nice, but if the jobs are non-union with private contractors, will those inadequate wages even help?

There's no will in our bought-off Congress to reduce the waste in healthcare by cutting off profiteering private insurers. Nor to stop wasting billions on two wars and countless military bases and mercenaries to undermine countless countries' democracies if they support labor.

Lousy wages for corporate profit left millions of households drowning in personal debt. Well, that, and the "I've gotta have it now, even if I end up paying twice as much with interest later, what the hell, my thirty-year balloon mortgage investment will triple someday before I retire without a pension" mentality. Add the stranglehold of the health, financial and military industries on our Congress, and we're simply sunk.

Capitalism is an endless cycle: profit, debt, inflation, recession, depression, demands half-met with higher wages, more inflation to capture those higher wages for the usual suspects' usual "investments": land, resources, war.

We need a green peaceful industrial base, organized labor (what the hell happened to the Employee Free Choice Act?), affordable housing (not even discussed by progressives anymore, rather than home-buying as an "investment" for tax-shelter and profit), and singlepayer health care, or nothing changes. Anything less is merely rearranging the deck chairs on the Titanic.

And we get nothing we need so long as we have an Imperial Senate, where bought-off senators of states that total a whopping 10 percent of the nation can destroy any of those policies.

Virginia Velez

Bainbridge Island, WA

Nov 25 2009 - 3:28am

Web Letter

It is the credit easing by the Fed and guarantees of the liabilities of key financial institutions, not fiscal stimulus, that has saved the economy from the abyss and which is critical to recovery going forward. Stimulus might temporarily lower the unemployment rate, but the funds are more efficiently spent on the social safety net or investments in nuclear power plants or other green assets that pay future dividends.

Our problem is that we cannot continue an unsustainable debt-financed consumption binge, both by government ($1 trillion in debt added in FY 2008, before the crisis hit hardest, and $1.9 trillion in FY2009) and consumers (nearly $5 trillion in home equity extraction 2000-2007 plus record credit card debt).

Take that unsustainable borrowing away and you have an economy with GDP of around $12 trillion, instead of the bubble peak $14.5 trillion we seem to be aspiring to again. Unfortunately, that means about a 15 percent unemployment rate, which is the true "China price" we paid for all those cheap imports.

We need a real economic strategy. Without that, our government will continue to face record deficits and ultimately commit a generational theft unprecedented in world history, by stealing from the prosperity of future generations and leaving them weaker, with massive interest payments.

We simply must balance the budget over the next five to seven years and take the bitter medicine now.

The key steps to resolve the ongoing foreclosure and banking crises are to essentially recognize that many consumers and banks are bankrupt. We can then take the appropriate remedy, which is bondholder haircuts for the major banks (so they become solvent again, like we did with GM) and conversion of debt to equity for homeowners, by reducing mortgage balances to the appraised value of the home.

Those are the real solutions. We can do that now, or face an uncertain future with massive deficit spending each year.

Hopefully, our leaders will listen to experts like Stiglitz, Roubini, Ferguson and Taleb, who make the above argument to anyone who will listen.

David Doney

Chicago

Nov 25 2009 - 12:10am

Web Letter

President Obama is following exactly what President Hoover did. Hoover raised taxes, signed into law the Smoot-Hawley tariff increase (protectionism for the uneducated) and expanded government spending (after all, Social Security was an idea that saw the light of day during the Hoover administration). How many times do we have to go down this path?

Ronald G. Gross

Lexington, KY

Nov 24 2009 - 8:49pm

Web Letter

"Cleaning up the balance sheet afterward"... So far we've heard a lot about more borrowing, but it's not clear whether that borrowing is meant to sustain or to stimulate the economy. If the latter, it has not worked particularly well. And it's nuts to think the economy can be sustained with borrowing by governments and consumers, which are already drowning in debt.

Even more worrisome is that there has been no indication of how the balance sheet will be cleaned up. Obviously, the government will need increased revenues. Why aren't we hearing about where that revenue will come from?

To call for more borrowing without any indication of how it will be repaid does not inspire a lot of confidence. There seems to be an assumption that the depressed economy is merely suffering from a "psychological" setback, that once consumers feel better about prospects for growth they'll unleash spending again. The facts argue otherwise. People have stopped spending because their credit has run out and their wages have fallen. That is the root cause of the recession, which is not being addressed.

Bud Ilic

Bloomington, IL

Nov 24 2009 - 8:26pm

Web Letter

The national debt serves as an income-transfer program, transferring income from the ordinary taxpayer (not just today's but those for generations to come) to investors--generally the wealthy, large institutions and foreign countries. It is a reverse Robin Hood program.

The massive deficits under Obama (and Bush before him) serve to increase income inequity. In addition, they put pressure to reduce social spending due to the amount debt service takes in the national budget. (Unfortunately, in the US, military spending is treated as an idol to be worshipped, so it is unaffected.)

Obama was criticized for not really taking a human rights position in China. The reason is really quite simple. The US owes them so much that we have to be obsequious.

Progressives should regard the national debt as basically evil over the long run. One can only avoid the negative consequences of deficit spending if it is balanced by surplus spending in good times. However, the US has had only brief periods of budget surplus (the last one under President Clinton) in many decades, and is in a dangerous debtor status.

Bill Samuel

Silver Spring, MD

Nov 24 2009 - 2:45pm

Web Letter

Good analysis! Regardless of one's economic philosophy, the fact is that 70 percent of the American economy is supported by the disposable income of ordinary workers. There is no economic recovery without a jobs recovery. You cannot get a jobs recovery when you are outsourcing the industries that support them for cheap labor. The disappearance of jobs means the disappearance of the American market and the disappearance of wealth.

We are now seeing China raise wages to build a consumer base that supports their economy. It was reported today that more cars were sold in China than in the US this year. However, a portion of this economy is still dedicated to trade with failing Western markets that are no longer supported by the disposable income of outsourced jobs. Trade between China and the US has fallen 13 percent. There were layoffs of Chinese workers, because the purchase of imports was reduced. Reliance on weak trade partners puts their jobs at risk. Japan's reliance on trade had been even more catastrophic because its economy was more dependent on trade.

Looking at China and past experience in the US, the lesson is that internal economic development produces more economic growth than foreign trade. China has trade barriers, and the US needs trade barriers to redevelop industries, jobs and the American market.

Pervis James Casey

Riverside, CA

Nov 24 2009 - 2:41pm

Web Letter

The author of this article is no historian. He needs to read The Forgotten Man, by Amity Schlaes, and get his facts straight. Hoover's downfall was too much government intervention, as was FDR's. FDR only prolonged the recession with experimentation. Overplaying government's role in the free market is the worst thing that can happen. Tax and spend = government takes money from the economy and wastes it on more government. The government has never run anything efficiently, and it doesn't take a rocket scientist to see why Obama's pork-barrel spending has not helped the economy. His stimulus package was nothing but a payout to his friends and special interest groups--and holds no promise of stimulating the economy or the middle class.

John Nielsen

Sykesville, MD

Nov 24 2009 - 2:25pm

Web Letter

As I read this, I am developing a disheartening and sicking sadness. There seems to be an almost incredulous disconnect between both the available and all-too-present current economic realities we are facing (and the historical perspectives we have available) and the diametrically opposed and clearly ineffective actions by the administration and the Congress. I am forced (at the moment) to understand it all in only two ways.

The first, concerning the president, I can only grasp as it is explained in this essay. While this may appear harsh and "excruciating" (to use the author's word), it is also a perspective with which is very difficult to quibble.

The second, as regards Congress, may best be understood by simply observing the nonsensical dawdling by that body on health care and the curious non sequiturs we get from the likes of Ms. Pelosi, who spoke this morning of "pulling our punch" with jobs and the economy. This means what, exactly? And accomplishes what by its utterance?

The president is operating from a completely different sphere of influence than is the rest of the nation, and the Congress is operating in a manner clearly driven more by showmanship rather than by electoral servitude of any kind.

In any case, the disconnects are so alarming because either party could pay attention to the likes of Mr. Greider and we would all be so much the better. Sad, indeed.

Ivan Hentschel

Austin, TX

Nov 24 2009 - 2:09pm

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