June 23, 2011

Turn on the bubble machine

I like reading Paul Krugman's blog, "The Conscience of a Liberal," because it's so unrealistic and out-of-date that it offers the anodyne pleasures of watching the original "The Twilight Zone" on Netflix, which is something else I do for the sake of nostalgia. The Krugman blog is often the first draft of the columns that appear twice-weekly in the New York Times, but it's on the blog that Krugman can give vent to his prickly, invidious and arrogant nature. He's constantly calling people "stupid," deluded, et cetera, particularly anyone on the political right. A lot of fun.

I don't think Krugman makes any sense whatsoever. His economic "models," as I suggest above, seem based on an American economy which existed during my (and Krugman's) youth, when America was a manufacturing, job-creating powerhouse, which it certainly is not anymore. As David Stockman keeps pointing out, the actual number (not percentage) of employed people in the United States is less now than it was over ten years ago, despite population growth of about 30 million people during that time. Another way of conceptualizing the same kind of data is to look at the Fed's chart of percentage of the civilian population with jobs. I'm not quite sure how the data translate to an unemployment rate of only 9.1%, but I suppose that's what Hilda Solis gets paid the medium-sized bucks for: to help her boss with his reelection chances, and a UE rate with a single-digit handle is certainly better for those.

I don't really blame Mr. Obama for much of this. He inherited this mess and there was not much chance he could make substantial inroads on the manifold ills of the Amerian economy in 2-1/2 years. What doesn't help, however, is that he's surrounded himself with learned, Keynesian-oriented economists and advisors, and these people believe in only one thing: growth in GDP. Resource constraints, global warming, destruction of the oceans, overpopulation, environmental degradation, animal habitat destruction - all of this is quite beside the point. One thing matters, to Krugman and all the rest: if you take our phony GDP (artificially inflated because the formula includes government spending, which in the case of the federal government includes a budget comprised of 42% borrowed money), the only relevant question is, can we get that GDP to grow by 3% this year so we're "succeeding?" Also never mind that GDP, that most indiscriminate of measurements, includes all the trash we call an economy: credit default swaps for gargantuan amounts written for bettors with no conceivable interest in the outcome of the success or default of the "insured" party other than a gambling motive; commissions "earned" on the sale of utterly worthless bundles of crap mortgages; and all the rest of the stuff. It all counts toward GDP, including the manufacture of the latest generation of Predator Drones so that Arabic-speaking people can be incinerated from the air conditioned comfort of offices in the San Joaquin Valley.

It's been said a million times by others, but it's true nonetheless: the political perspective always needs to focus on the next election cycle, which means that "solutions" are only considered if they have some effect within two years, at the very outside. My greatest, single disappointment with Barack Obama is that he decided to play this game and become simply another shuck-and-jive politician, fiddling with statistics, lauding nonexistent "recoveries," and shaping his policies toward the creation of election-ready "images." Thus, tough on Terror, strong on defense, conservative on the social agenda (religion, gay rights, abortion, marijuana laws) and all the rest of the illusions which helped to get us into this quagmire.

In other words, simply another run-of-the-mill, uninteresting, frankly dull, utterly useless generic politician. I am, indeed, amazed that it came to this, but that's where it is. When he talked about Change, I thought there was a chance, however remote, that for once a national politician with the wind at his back might take a shot at really leveling with the American people. I mean, that graph up above - as the navigator tells Major Kong in "Dr. Strangelove" as the fuel leaks out of the B-52 after the missile attack, "I'm sorry sir, but those are the numbers." We're trying to run the same old "growth" economy that Krugman is still writing about (last extant in the 1960's) despite the arrival of peak oil, of international labor arbitrage, of offshoring of factories, of 90% depletion of the world's oceans, of dangerous levels of CO2 in the atmosphere, of food shortages, of epidemic illness from industrialized food production, of endangered supply lines because of competition from Asian nations for the world's remaining readily-accessible petroleum reserves. In other words, there is no talk of Adaptation to a changed environment, even though the American people, taken as a whole, would welcome such talk And a species which does not adapt to environmental changes goes in one direction only - toward extinction.

Obama surrounds himself with legacy advisors from legacy industries and institutions, all the people (like William Daley from the Chicago political machine and JP Morgan as his Chief of Staff) who simply tell him ways to keep the old system staggering along, just long enough to get Barack to November, 2012, and let Obama cross the finish line of reelection, just like the two previous Presidents before him. In other words, reelection for the sake of reelection.
It's an amazing incongruence between the American people and the "image" of the American people that must exist inside the Washington, D.C. Beltway. I actually think that most average American commoners have figured out what's going on in our economy, about why it's in such dire shape. If 42% of the adult (older than 16) American population (again, see above) does not have a job, you have a tremendous cohort of people who would be pretty willing to try anything, don't you? Let's paint every roof in America white, as Steven Chu suggests. Let's retrofit every house with double-pane windows and insulation, and place solar panels on every conceivable location. Sounds good to us! We have the manpower, we've got the idle workforce, we need to conserve all of the energy we can. Let's build bike lanes as they do in Holland, let's build high speed rail as they do in China. Let's move toward localization of food production and get rid of agribusiness and cattle feed lots. Let's do all that, here in America, instead of worrying whether we can protect Europe's 1.3 million barrels per day from Libya so that Europe doesn't begin encroaching on our imports.

It's why two-thirds of Americans oppose the Afghanistan war - the populace is beyond caring whether AfPak, or whatever, is of "strategic importance." What Americans know is that the war's a waste of money we don't have, as a vast part of the military budget is a waste of money we don't have. Yet Obama is convinced, because he's fallen under the sway of the Fun House Mirror used in D.C. to figure out what people "actually" think, that unless he acts like George W. Bush and wins "his" war, as Bush "won" Iraq, then he can't win reelection.

There is, in other words, no actual plan. Maybe someone can dream up another Bubble. The dot.com boom bolstered Clinton's terms in office. Then it burst and we had a recession and falling tax revenues. Then Bush engineered the housing bubble. It burst, we entered a Depression, and tax revenues fell even further behind the unrealistic spending built on serial bubbles. And now, with neither a Bubble nor Lawrence Welk on the horizon, it's back to Plan A: fake it till you make it to reelection.

No comments:

Post a Comment