After hearing Obama's press secretary slam the radical left, I felt compelled to post my thoughts to one of the Atlantic Magazine's blogs.
I'm a loyal, yellow-dog Democrat. I do neighborhood canvassing, precinct organizing, phone banking, you name it. I'm also a victim of the latest economic downturn that treats 50 year-old IT Architects like radioactive Plutonium. And I'm at my wits end with the present administration.
Interesting that Mr. Gibbs chooses to go off on the "Liberal" (formerly centrist) Left, but has little to say about loyal members of the opposition. I think this speaks volumes. To me its indicative of an administration that is thin skinned when it comes to internal criticism, but will readily turn the other cheek when bitch-slapped by Republicans/Blue Dogs.
If Mr. Gibbs would like some real bile, he can step out of the DC bubble economy and take part in our next local phone banking operation. There he can hear first hand the frustration of Democratic voters. After wards he can call me, and I'll paint a picture of the long-term middle class unemployed; of the innuendo of being called a welfare queen who only wants to stay on unemployment, of the incredible frustration of trying to get mortgage relief through the HAMP process, of not being able to pay for my kids college education (not that a degree would help much at this point), (etc.).
The political class in Washington are predominately a product of the Public Sector. Very few of these folks have ever had to meet a payroll or a monthly tax payment. But that's OK - FDR took on the wealthy class, and welcomed their hatred. The (Ivy League) "Meritocracy" of the Obama administration has lost touch with middle American. Which I guess is a misnomer, because to lose touch you need to first have it.
Here in the "Provinces" the pressure is reaching a breaking point. Folks with little to lose have little fear.
I think the real issue here is class conflict. The "Liberal Left" has the audacity to question the ideas of their betters in Obama's Administration. In a powerful article, Jack Sparrow writes about the Corporate strip-mining of wealth out of the American Economy. Key quotes are:
In the same way that mining companies will descend on a region with heavy equipment and chemicals, brutalizing the land until nothing is left, corporations large and small are doing the same thing with the goal of extracting profits rather than minerals, to the long term cost of the U.S. economy itself.
A recent Economist chart tells the story:
"Corporate profits are back within a whisker of the all-time highs achieved before the downturn in late 2008″ The Economist writes. "American profits are already back to 11% of GDP. Corporate America is reaping the rewards from cutting costs, especially in capital investment and labour, through an unpleasant mix of redundancies, reduced hours and lower pay. The great squeeze cannot go on forever, of course, but it shows no sign of slackening."
It is this corporate "strip mining" process, along with a failure of stimulus funds to actually stimulate, that is responsible for the great top down / bottom up disconnect we have pounded the table on repeatedly (see "Sunny With a Chance of Earthquakes" as recent example).
The logic chain goes something like this:
* The spigot of cheap money from the Fed buoys the fortunes of U.S. corporations.
* Investors are happy to lend to blue chip borrowers, but not to small businesses.
* Public companies keep profits up by ruthlessly slashing costs (i.e. jobs).
Wall Street then cheers the numbers as three self-reinforcing trends are sustained:
1. Strength begets strength on the bottom up outlook for public companies.
2. Weakness begets weakness as American jobs are "strip mined" for profit.
3. The Fed’s easy money stance is sustained by persistent economic malaise.
In the medium term, the "strip mining" model is a recipe for continued strength in equities. It is very hard to resist a combination of robust profits and cheaply available credit (for the right borrowers) in a zero interest rate environment.
In the longer term, though, this cycle is yet another example of glaring short-termism on Wall Street, of precisely the sort that portends ultimate disaster for the U.S. economy (and for slow-footed investors who fail to cash out before the guillotine drops).
The trouble with the whole strip mining model, after all, is that the practice is not sustainable. Once you have taken what can be taken, there is nothing to be done but abandon the area and leave the land for dead – perhaps to start up another mine elsewhere.
Similarly, the notion that corporations can ìstrip mineî for profit indefinitely, even as they hoard rainy day cash in the same manner as the banks, is not remotely feasible.
And for those unaware of what’s happening, by the way, here is a little light reading:
* Weak pivate hiring shows recovery on the ropes (Reuters).
* The Long Term Jobless: Left Behind (Businessweek).
* Wary US employers keep hiring plans on hold (Reuters).
* The grimness of US unemployment (FT Alphaville).
* The Biggest Lie About US Companies (Yahoo).
* Michael P. Fleischer: Why Iím Not Hiring (WSJ).
* The crisis of middle-class America (Financial Times).
Our economic insecurity, eroding standard of living, and crumbling infrastructure are all rooted in this financial strip-mining. All the talk about "globalization", "free trade", and "free markets" are just a smoke screen for Corporate rapacity and greed.
This is what America is really anxious about.
And once the Middle Class has been mined out, the only thing left to pillage is our social security "entitlement". (Funny. I didn't know that something you paid for became an entitlement when you redeemed it. But then I'm not a Stock Market expert...)