I’m no economist, but it doesn’t take a Ph.D. to see that there is a lot of nonsense being peddled to assure the people of the U.S. that the recession we’ve been in since April or May will go away quickly.
“Many economists” are cited as believing that the recession “will have a V shape.”
In other words, we will crash hard but rebound fast. Why a “V” shape? What suggests that shape is more likely than a “U” shape or a “W” shape, or even the dreaded “L” shape?
We are told that the latest government statistics for the third quarter have already taken into account the negative impact of the terrorist attacks, but that this was more than offset by the overtime paid to police and firefighters.
How paying overtime to one group of workers makes up for the layoffs of another is something that can only be explained by analysts focusing on macroeconomics rather than real human beings.
A similar “blinders on” prescription for ending the recession (when will it become a depression, or has that word been banned?) is to encourage the people of the U.S. (read: workers) to spend more.
We are told over and over that “consumer confidence” is “responsible” for two-thirds of the country’s economic activity. No doubt this is true. Workers make up the vast majority of people, and in the aggregate spend billions on food, gas, rent, mortgages, refrigerators, cars, etc. But how can people who have been laid off spend more? The hundreds upon hundreds of thousands of laid-off workers and their families have a whole lot less to spend, and that has nothing to do with confidence, it has to do with not getting paychecks!
Is it really prudent for those who are worried about getting laid off soon (no doubt a realistic concern for millions) to go further into debt?
Sen. Patty Murray (D-Wash.) is proposing a sales tax holiday to encourage more spending. “Let’s go shopping,” she is quoted as enthusing.
While anything that gives workers an economic break is good, will increasing the amount of consumer debt (already way up in the trillions, bigger than the annual gross national product) really be good for the economy?
The unemployment rate is shooting up; layoffs in the thousands and tens of thousands are announced daily; Argentina may be forced to default on billions in loan repayments. The Japanese economy, in recession for a decade, is slipping further. New York City faces a possible additional 100,000 layoffs by the end of the year.
The nine Federal Reserve Bank interest rate cuts thus far this year haven’t made a dent in the downturn. Nonetheless, some pin their hopes on the next expected interest rate cut to turn the economy around. Why will the tenth have an impact that the first nine haven’t?
Let’s put the blame where it belongs, not on workers but on corporations, the super-rich, and reactionary politicians who craft national economic policy to benefit the few at the expense of the many, to put profits before people. Real patriotism requires that we deal with reality, the reality tens of millions of workers deal with daily.
Put people before profits. Bail out workers, not corporations. Increase unemployment insurance, and change the rules so more than 40 percent of the unemployed can get it. Pass an emergency public works jobs bill. Invest in rebuilding the infrastructure of our country – bridges, schools, parks, mass transit, housing for the homeless.
Eliminate taxes for the poor and unemployed. Pass the economic recovery proposals from the Progressive Caucus and the AFL-CIO. End the war on Afghanistan and bring the troops home. Rebuild the public health system to increase real security.
While it won’t help the economy, for goodness sake stop talking as if “consumer confidence” going down was a mystical phenomenon—people are worried about layoffs. That’s not loss of confidence, that’s realistic budgeting and planning.
Consumer spending may account for two-thirds of economic activity, but paychecks are responsible for 100 percent of workers’ “consumer spending.”
– Marc Brodine
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