Friday, February 22, 2013

Ed Asner And Towers of Money

With a flaw or two, Ed Asner tells it (mostly) like it is with a little help from animators:

It contains an oversimplification or two. It overly blames "rich people" without mentioning ignorant and misinformed people. And the video fails to mention that there are a number of "rich people" who weren't complicit -- at least not actively -- in that problem. And it seems there are some "rich people" who actually want to do the right thing. The core flaw with this video is that it paints rich people as a monolithic block of villainy, an impression that isn't generally correct.

However, such flaws aside, it does do a fairly good job of generally describing the breakdown in the economy. In a consumer society, one does not create prosperity by shoveling more and more via tax breaks to those who already consume all that they care to consume. In a consumer society, one creates prosperity by strengthening those classes of consumer that do not already have the income to consume all that they care to consume.

Wednesday, February 6, 2013

Jobs Versus Budget Cuts: It's One Or The Other

So many still seem to be missing this basic point:
"Right now the central challenge is to reignite the economy — getting jobs back, improving wages, and restoring growth.  
Deficit reduction moves us in the opposite direction. That’s because most consumers (whose spending is 70 percent of economic activity) are still losing ground, and businesses won’t expand and hire without more consumers." 
- Robert Reich in "The Economic Challenge Ahead: More Jobs and Growth, Not Deficit Reduction"
At least, so many among the Republican movers and shakers and apparently in the Oval Office too. Why? One can only presume that they're still taking it on faith that reducing the deficit is the most important thing ever, despite all the mountains of reason to believe otherwise.

One data point in that mountain, as Reich puts it,
"Likewise, cuts in government spending, such as occurred in the fourth quarter of 2012, cause the economy to contract — as it did in the fourth quarter."
In order to move the country in the right direction, policy needs to get the basic problem correct. So long as they figure deficit reduction via budget cutting is the order of the day, they'll continue to hurt. Everything. Including the deficit.
"For 60 years (!) the pattern has held. When unemployment drops, the deficit as a percentage of GDP drops. When unemployment rises, the deficit rises." 
- Joe Weisenthal in "There's Only One Way To Fix The Deficit — And Actually It's Totally Painless"
Sure, we could possibly have jobs despite their budget cutting. After all, we've had some recovery so far, if a rather anemic one. But that's despite their budget cutting. The whole economy -- including the debt/deficit picture -- would be better off if deficit hawks weren't hamstringing us with their fixation on budget cutting.

Monday, February 4, 2013

Still A Huge Surplus Of Savings

Still a huge surplus of savings:

Gross Private Savings minus Gross Private Domestic Investment

We're still very firmly in the situation where we could add lots and lots of deficit spending into jobs programs as well as more QE without a snowball's chance of spurring inflation.

Sunday, February 3, 2013

Why Getting Back To Progressive Would Be A Win For The Wealthy Too

"Not even the very wealthy can continue to succeed without a broader-based prosperity. That’s because 70 percent of economic activity in America is consumer spending. If the bottom 90 percent of Americans are becoming poorer, they’re less able to spend. Without their spending, the economy can’t get out of first gear. ... Get it? It’s not a zero-sum game. Wealthy Americans would do better with smaller shares of a rapidly-growing economy than with the large shares they now possess of an economy that’s barely moving."

- Robert Reich in "The Non-Zero Sum Society"