Which is it gonna be? That’s the question. President Obama and the Democratic Party have come out in favor of using basic economic theory of the kind you learn in a college Macroeconomics 101 course to pull our country out of the Bush Recession. Their response to the economic crisis is the American Recovery and Reinvestment Act of 2009.
The Republicans throwing filibuster hissy-fits in the Senate have decided to use the economic wisdom of Samuel Wurzelbacher, aka "Joe the Plumber". After throwing trillions of dollars of taxpayer money at the war in Iraq, and gleefully throwing 700 billion dollars more to banks under TARP, all of the sudden, they’ve become deficit hawks and have started howling about all the big government spending. They seemingly follow the advice of a man who isn’t an economist and isn’t a plumber.
We have our choice. Do we follow the economic advice of Nobel-Prize-winning economists like Paul Krugman, or do we continue the same disastrous policies of George W. Bush, now being sold by a plumber turned country-singer turned war-correspondent turned economic-guru?
Just how stupid is this country? Looks like quite a lot of us are stupid enough to happily eat horse manure. Keep reading...
College Economics
Really, it all comes down to math, and the math just isn’t that hard. Check it out on Wikipedia.
C + I + G + X - M = GDP
Where:
GDP = Gross Domestic Product. In other words, America’s total economic throughput.
C = Consumption. Consumption is way down right now - that’s why GDP is down.
I = Investment. Take a look at the Dow or NASDAQ indices. Investment is in the tank too!
X = Exports. We’re not exporting much. Well, we’re exporting jobs to China and India, but I don’t think that’s what John Maynard Keynes had in mind.
M = Imports. Note the minus-sign preceding M. It’s counterproductive for us to outsource all our manufacturing capacity and import cheap plastic junk and melamine baby formula from China and other countries. The end result is known as a trade deficit. In an ideal world, we’d bump up tariffs a notch (just a notch, don’t go all Hawley-Smoot) to discourage imports and encourage domestic production, but that doesn’t appear politically possible yet.
What’s left? What is there left that we can do something about?
Oh, yeah, G = Government Spending. If you want to raise the GDP and get the economy working again, you need to maximize G. Part of Keynesian economics is countercyclical fiscal policy - when the economy’s doing great, that’s when you minimize G - you trim the government fat, you pay down the national debt, and raise taxes to keep the economy’s roller-coastering under control. When the economy’s in recession, that’s the time for the government to spend! They call it stimulus for a reason - when government money propogates through the economy, it encourages people to spend their own money, thus for every dollar of government spending, you get a return that is added to the GDP. Not only is the total GDP increased, but the stimulus causes C, I and X to increase, further boosting GDP. Those smart edumacated folks at places like Moody’s Economy.com even calculated the effects of various types of stimulus. I posted this chart before, but let’s see it again.
Really, it’s not that hard. I cruised through Macroeconomics class with an A back in college, and I slept through half of it. It’s basic algebra at best - we’re not talking about differential calculus or rocket science here. I only needed a couple Ross Perot flipcharts to show how it works. The eggheads know exactly what needs to be done to get this economy to right itself - get the government to spend a lot of money on stimulus.
Joe The Plumber Economics
But let’s take a look at the wisdom of the Republican party’s latest economic advisor, Samuel Wurzelbacher, aka "Joe the Plumber". That’s right, he’s going to be a featured speaker at the GOP’s latest pow-wow, and he’ll be talking about the economy. Specifically, he thinks the stimulus package is a bad idea, and a waste of money. He would have our government use its resources on tax cuts instead. Of course, in order to be given the great honor of imparting his great economic acumen to the Republican Party’s elite, Joe the Plumber must have earned his stripes. Did he earn a Ph. D. in economics? No. Did he win a Nobel Prize? No. Did he even take a college macroeconomics course? As far as I can tell, it doesn’t look like he even went to college. When he confronted Barack Obama on the campaign trail, he got his facts wrong - with his stated income, his taxes would have gone down under Barack Obama’s plan. Of course, that’s assuming that his stated income and profession was correct - he isn’t even a real plumber.
No. Joe the Plumber is not an economic authority, he’s an idiot. Specifically, he’s the Republican Party’s useful idiot - his job is to peddle their economic agenda. That policy comes under many names - Reaganomics, supply-side economics, trickle-down economics. George H. W. Bush famously called it "Voodoo economics" when he ran for President against Ronald Reagan. But my favorite name for the Republican’s economic practices, which I heard mentioned on Thom Hartmann’s radio show, is the "Horse and Sparrow theory." In other words, if you feed enough oats to the horse, some of those oats come out of the horse’s rear end and feed the sparrows.
In other words, Republican politicians would funnel all the money in this country to their rich billionaire golfing buddies, and leave the rest of us to eat shit.
The late, great George Carlin said it better than I did.
They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.
They don’t want that, you know what they want?
They want obedient workers, obedient workers. People who are just smart enough to run the machines and do the paperwork and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it.
And now they’re coming for your social security money.
They want your fucking retirement money; they want it back so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later because they own this fucking place. It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to believe, what to think and what to buy.
That’s the secret. The Republicans are not interested in protecting the middle class at all. In fact, their political interests are best served if the economy stagnates for years. When Rush Limbaugh said "I hope Obama fails!" he meant it, and yes, he hopes all of America fails with President Obama. That means they can heap blame on the Obama Administration, take back the Presidency and Congress in a few years, and go right on screwing us. It’s class warfare, and we’re losing. The rich interests that back the Republican Party do not want a big middle class in this country. They want what makes the most money for them. In other words, they want us all to be impoverished, desperate, dependent serfs. They want us in a position where they can dictate how much money we can make from our work, what kinds of benefits we get if any, and they want us in an environment where we can’t escape, where everywhere we look is just as bleak as where we are. They want us all working for less than minimum wage. They want us to quit bitching about things like health care and workplace safety. They want us indebted to the company store.
There you have it. You have your two options. Do you follow the learned advice of our academic elites who did all their research, checked all their math, and concluded that the government must spend money to stimulate the economy, or do you want to follow an uneducated con man who’s showing us a plate of horse shit and telling us it’s chocolate?
Make your choice.
(This diary originally appeared as a post on my personal blog at http://www.meldroc.com/...)