Apparently, last night, something happened in Iowa. However, the big news hit this morning - the negligence economy has failed. Joblessness in America spiked dramatically as "Hiring practically stalled in December." Here is the report:
http://biz.yahoo.com/...
What this means for you - and more importantly, for your children - and why this development means that if America cares about its economic future there is only one candidate (from either party) I will discuss below the fold. However - caution, there is, unfortunately, discussion in musty marcroeconomic jargon and monetary minutiae and, worst of all a sobering look at reality.
The unemployment rate did not just inch up or adjust for seasonal factors. It did not reflect small trends in the economic fabric:
The unemployment rate jumped from 4.7 percent in November to 5 percent in December. Id.
Now, I know, you are saying to yourself - well really - just a small increase - what's the big deal, don't get all hyperbolic. However, the problem with being a Pollyanna is that we are out of options - there are no arrows in our economic remedy quivers. Traditional economic theory postulates that when the economy starts to sputter policymakers can use both fiscal and monetary palliatives.
Fiscal solutions involve the federal government (not usually any lower government entitites because most are bound by limits written into law and because they are tapped out anyway) going on a spending spree - i.e. massive infusion of demand for good and services via deficit spending. However, there is a problem - not to put too fine a point on it - but in terms a Republican might understand, we is broke. Actually - I was not being entirely accurate - we - that is the present generation have been broke for a while - Bush ran through our credit card a long time ago. No, right now, not only us, but our children and their children are broke. The policymakers don't have the money to rush into the economy.
The second arrow is the monetary solution. Ooops. Without making everyone's eyes glaze over, as I appreciate it, central bankers have infused economies with cash through a wide variety of mechanisms in the past - many arcane and inpenetrable: reducing the prime rate, opening the "discount window", lowering the interchange rate (I am sure that you are keeping track of movements with the LIBOR - no, trust me, you don't want to know). Sadly, here again, [phrased for Republicans]: we is broke. The Fed (and other central banks, in response to the "subprime" "housing" "financial markets" crises have been printing and spewing money into economies worldwide. The Fed has been slashing rates, opening discount windows and in the words of some economists (paraphrased) "implementing creative bailout strategeries" to basically just give your children's money (remember - you aint got none - we have done spent that) to bankers and investment gurus and high powered CEOs (yes, there was a few minutes there in November when the untold suffering of a CEO who might miss private jet junket to golf in Tahiti was acutally in peril - but, thanks, guys you came through and bailed them out - whew!).
So - here we are - the economy is tanking - jobs are slipping away, debt is piling high, foreclosures are hitting record rates, people are quite literally dying because most Americans can no longer afford health care (alot of them think they have something called "insurance" - but, it turns out, what they have is a piece of paper that gives a bureaucrat somewhere the power to literally decide your life and death. Don't worry there is a great time coming for you or a loved one - when you get that lovely form back - with it's great one word sentence:
DENIED
Wait, what did you say, you have a remedy at law if someone breaks a contract and wrongfully denies your claim. Once I thought that kind of naivete humorous - after recent events - I (and I hope you) appreciate it is deadly, quite literally, deadly serious.
Yeah yeah - but what does that have to do with the economy. Well, sorry, but we have to back up. How does a free market, free enterprise economy work? What is its goal? What makes the watch tick? The reason it works is that if you put the decision on the allocation of resources (whether capital, goods, labor) in the hands of the economic actor most interested in the outcome of the decision that actor will maximize the efficient use of that resource. Consequently goods and services are most efficiently allocated, create the most value and make the economy work.
Adam Smith, as I appreciate it (though one can find academic dispute regarding exactly what Mr. Smith meant) used the metaphor of the invisible hand. A resource would find its distribution and optimum use by an "invisible hand" because the person in charge of the resource has the most incentive to use it wisely. However - and this is the key point - along with being able to reap the rewards of this efficiency - that economic actor also bore the risk. This bears repeating - there was a time when free market theory held that capitalists (just like the rest of us) bore the risk associated with wrongdoing,
What risk did they take - well, there were a number, but the most fundamental was that if they screwed up and acted wrongfully they had to appear in a court of law and respond in damages. This is an absolutely fundamental prerequisite for our society to work. You build a better mousetrap you succeed. You build a defective mousetrap and you must respond in damages when your failure hurts others.
What is modern Republican economic theory? - it is this - negligence is a good, incompetence a virtue and cronyism laudable. While there is zero, none, nada, bupkus, zilch data to support that there ever were statistically or economically significant numbers of "frivolous" lawsuits - the Negligent, Indolent, Tortfeasors and Wrongdoers, Incompetents and Trespessars Society , aka NITWITS (or as you know them: Republicans) have sold the public a complete canard that "trial lawyers" (i.e. the profession of choice of our founding fathers and greatest historical figures) have hurt our economy. In fact, the precise opposite is true - and now - as the economy craters - you and your children have paid the price.
Although this is a story repeated throughout our Bush economy - one example will suffice. Currently CEO pay has grown from a ratio of 8 to 1 in the 1940s to over 400 to 1. Compared to other economies - which are outperforming the Bush economy - this rate of compensation is way out of balance. How can this happen, you ask, don't these executives have to answer to their shareholders??
The answer is that while you were being misdirected about frivolous lawsuits and evil "trial lawyers" - the corporatists and their wildly activist puppets in the courts systems radically weakened remedies available to wronged shareholders - think ENRON.
What does this have to do with the Presidential race. The answer is obvious - only John Edwards has a chance of stopping this runaway freight train. HRC is in bed with the insiders. Obama thinks like a Republican with respect to trial lawyers. Edwards understands that our hope is to use the American system to fight for justice as we always have.
So - there it is - sorry to tell you - but you are broke. You probably have not sat down with your children and told them - sorry - you spent their money also. So - if we care about the future you have two choices - you can support Edwards - or go have a long talk with your kids.