I voted for President Obama. I thought he was the most sensible option. I still think he was the right choice at the time. But I’m disappointed, very disappointed. He’s letting the Republicans walk all over him. Much of the Republican agenda is dead wrong for the future of this country. Their blind reliance on fossil fuels, combined with their abject denial of the effects of global warming, are driving us off a cliff, environmentally, economically, and with respect to our international competitiveness and national security.
They continue to perpetuate massive debts that push more wealth into the hands of the super rich to produce jobs that don’t materialize, while they hypocritically chop away at the middle class and infrastructure investments in areas such as healthcare and education that are critical to our long-term viability as a nation.
And yet almost from the moment he was elected the President has allowed them to spread their propaganda about an agenda that is decimating the middle class and weakening the country. And he continues to do this without showing so much as a whimper of resistance. Ditto this for the Democratic leadership. And it seems to be only getting worse.
Take healthcare for example. The single most telling moment, in my opinion, during Obama’s live broadcast last year came when Eric Cantor announced that America couldn’t afford healthcare reform. Excuse me! Did I really hear that right?
As of 2008, on a per capita basis, U.S. expenditures of health care were $7,538, or approximately 2.7 times the 34-country OECD average, this according to the The Organisation for Economic and Co-operation and Development report OECD Health Data 2010. The Republican’s supposed pro-business agenda notwithstanding, the high cost of healthcare represents a major detriment to our economic strength. According to the same OECD report the US spent 16% of GDP on health care, compared to an average 8.3% of GDP spent by much of the rest of the world. This is hardly a solid basis for our long-term global competiveness.
(btw…another interesting tidbit of information is that the additional US health care expenditures per capita over and above the other 33 OECD country average [7.7%], multiplied by the 2010 US GDP of $14.66 trillion comes to $1.128 trillion. The current US 2010 budget calls for a deficit of $1.71 trillion. Hmmm?)
And so what do we get for our money? According to a 2009 study from the Urban Institute; “among 19 countries included in a recent study of amenable (avoidable) mortality, the United States had the highest rate of deaths from conditions that could have been prevented or treated successfully”. And the CIA World Factbook ranked the United States 177th in the world for infant mortality (1) rate (out of 223), and 50th for total life expectancy from birth (2).
We’re paying over double for our health care and that’s the best we can do? I respectfully suggest that Representative Cantor has it completely backward. What we can’t afford is the status quo. It’s killing us, and it’s only getting worse.
So how did our President respond to Cantor’s insanity? He said nothing, nothing at all. He allowed the Republicans to spew their hogwash stories about what we can and can’t afford. These outrageous lies have let them to take control of the most critical conversations today. Worse yet, instead of fighting back as they should, Democrats have mostly rolled over and acquiesced to this Tea Party-fueled insanity. Democrats are now falling over each other to see who can become the best Republican lackeys.
But the real crime is that the Democrats actually have far stronger arguments. Consider the economy. For nearly 30 years the Republicans have extolled the virtues of supply-side economics as if it were some kind of miracle elixir for economies in turmoil. But what they’re unwilling to admit is that different economic environments call for different approaches, and instead blindly believe that supply-side is a one-size-fits-all solution.
The fundamental problem with the current economy is weak personal consumption (demand) from the middle class. This single economic sector represents over 70% of GDP (3) and when personal consumption is down no amount of tax cuts, credits or reduced regulations are going to persuade businesses to hire any more people. As a result of the millions no longer collecting paychecks, U.S. corporations today are sitting on some $2.0 Trillion in cash (4), and Wall Street is booming. Unfortunately, Main Street isn't.
Unemployment, even with the recent improvements, still remains persistently high. And it's going to remain high until domestic businesses see strong, sustained domestic demand. Until consumer demand, personal consumption, is once again strong and sustained the so-called “job-creators” aren’t about to replace the jobs lost since this mess began. And this requires a strong middle class.
But the effect of thirty years of failed supply-side policies has been economically disastrous to middle-class America. The tax code implemented in the Reagan era has driven more and more capital to the richest Americans. On top of that, the all-out Republican assault on programs that had served to strengthen the middle class has now caused US economic inequality - the concentration of wealth in the top 1% of the population - to reach levels that were last seen in 1928 (5), and we all know what happened after that!
In fact, if I may indulge in a little history lesson, the Republican response in the 1930’s was to cut spending and let the economy right itself, or as Andrew Mellon infamously proclaimed the solution was to; “purge the rottenness out of the system” (6). This was the exact opposite of what the economy needed, and precisely why it took so long for the country to recover from the depression. Because as it turned out the solution that actually worked was a massive, but temporary, growth in Government spending. Yet for all the criticism he still gets from conservatives after more than seven decades, not even Roosevelt’s policies were sufficient to get us out of the Great Depression. Instead it took massive levels of spending forced on us by WWII to finally get our economy moving again. Between 1941 and 1948 the Federal debt as a percent of GDP skyrocketed to over 120% (7).
So did we end up with the Armageddon scenarios the conservatives are fond of predicting every time Government spending spikes? Hardly. Post-war expansion was stellar. Between 1947 and 1973 the U.S. economy expanded a total of 177%. But interestingly, in the same 26-year period beginning with Reagan’s tax cuts of 1981 and ending in 2007 just prior to the Great Republican Recession, the conservatives much touted supply-side era resulted in the economy expanding a total of only 121% (8). In other words, during the period of the great Trickle-Down experiment economic growth dropped by a third. Not exactly the resounding success the conservatives incessantly proclaim.
And on the issue of setting the record straight, consider the following. After WWII the Federal debt as a percent of GDP steadily declined to under 32% by the time Reagan took office in 1981 (9). In the succeeding 12 years of Republican administrations, debt as a percent of GDP doubled to 65% of GDP? The Reagan/Bush Senior era added some $3.5 Trillion to the Federal debt. Under Clinton debt versus GDP declined by about 14%, while under Bush it grew 22%. Nominally however, the federal debt grew $1.2 Trillion under the Clinton administration, but $4.3 Trillion under Bush. (NOTE: these numbers were arrived at by adding up the federal debt increases between the last year of one party’s administration, and the last year of the next party in office, then combining the administrations of the respective parties. (10))
In fact, since the end of WWII the Federal debt has grown from about $260 billion to $13.6 trillion as of 2010. But before the Republican’s start celebrating that the debt is so high under a Democratic administration, a little perspective is in order.
Of the roughly $13.3 Trillion increase in debt that occurred since the end of WWII, Democratic administrations contributed just over $5.13 trillion, while Republican administrations contributed slightly over $8.15 trillion, and that includes the first years of the Obama administration! Nor should we forget the interest paid by Democratic administrations on the additional $3.0 trillion in debt racked up by the Republicans. Kinda puts into perspective who created the economic disaster in the first place?
Oh, and to return to a previous point, the concentration of wealth in the top 1% is at levels unseen since just prior to the Great Depression. All this supply side-induced red ink has gutted the middle class, culminating in the greatest economic contraction of the post-war era, a legacy left by the failed policies of the Reagan and Bushes era. It is laughable that conservatives now act as if they are innocent bystanders in our current the economic troubles.
Maybe it’s time to borrow a page from President Bush senior and call this Supply-Side nonsense what it really is, Voodoo Economics! (12) Yet with all this evidence that not much is Trickling Down to the American public, Democrats still aren’t talking about the need for a strong middle class. Heck, they should be shouting. They should be out there everyday hammering the point that the key to our economic survival is a strong, vibrant middle class. But they aren’t.
And to make matters even worse the Republican’s now want to make drastic cuts to our investments in education (12), the very foundation of our national sustainability and long-term competitiveness. To blindly cut theses programs, even against the backdrop of the present deficit environment, makes about as much sense as expecting to reduce ones personal cost of heath care by chopping off body parts!
It’s gotten so bad that the conservatives have finally managed to position themselves as the most anti-competitive force in America today by continually attacking the middle class, the real engine of economic growth. In fact, about the only thing they are champions of these days are the interests of the ultra rich. Not households making under $250,000 a year (over 98% of income earners - (13)). Not small businesses that are the source of most new job growth and require a strong, domestic middle class to consume their goods and services. If conservatives were truly supportive of small business they’d encourage policies that shift wealth to the middle class whose increased demand will persuade businesses to start hiring again, instead of the super rich who keep most of their wealth locked up in equity investments thereby widening the gap between Wall Street and Main Street.
Even big businesses will suffer terribly in the long-term by our country’s anemic global competiveness, a circumstance caused by a conservative agenda hell-bent on destroying any attempt to sustain a strong, educated middle class. Of course, big business can just shift more jobs offshore.
So President Obama, why aren’t you talking about these critical issues? Why aren’t you screaming about them? After all, you were elected of a platform of “Hope and Change” to protect the well-being of people of this country, not the special interests of big money. We desperately need you to step up and take back America from the Fox-fueled orgy of economic insanity that is seeking to decimate our country’s economic health and international competitiveness.
Admittedly our deficits are unsustainable. So is our debt burden. Few would dispute the obviousness of this. Nor are all conservative positions untenable. In fact, some make a good deal of sense, such as justifiable concerns over runaway entitlement programs. But in the rational pursuit to put our house back in order we can’t risk killing off the middle class, the golden goose of our long-term prosperity.
What we need now more than ever is leadership and policy that brings our economic balance of payments back to earth, but does so without destroying our vital social structures and long-term competitiveness in the process. And for that we need strong leadership, not political slight of hand. And certainly not hypocritical games like those playing out in the halls of congress and across the country today.
What we need President Obama, more than anything else, is for you to stand up for the middle class of this country, to stand up for Main Street, not Wall Street.
References:
(1) CIA Factbook - Infant Mortality - http://1.usa.gov/...
(2) CIA Factbook - Life Expectancy at Birth http://1.usa.gov/...
(3) Bureau of Economic Analysis Historical Data. US GDP - Table 1.1.6 http://bit.ly/...
(4) Corporations Sitting on $2 Trillion in Cash. http://bit.ly/...
(5) Wealth concentration, now vs. 1928 http://read.bi/...
(6) A. Mellon “Purge the Rottenness.” http://en.wikipedia.org/...
(7) Graph, Historical Debt at % of GDP http://bit.ly/...
(8) BEA Historical Data. US GDP - Table 1.1.6 http://bit.ly/...
(9) US National Debt Graph. http://zfacts.com/...
(10) Debt Table - http://www.usgovernmentspending.com/...
(11) Voodoo Economics: http://en.wikipedia.org/...
(12) House GOP Presses for Deep Cuts to Education. http://bit.ly/...
(13) U.S. Census Bureau, Current Population Survey, 2007 Annual Social and Economic Supplement.