Even as a hopeless Congress and a misguided president drove the country off the fiscal cliff of totally unnecessary sequestration tax hikes and spending cuts, the U.S. economy was ignoring their incompetence and rebounding very nicely, thank you very much.
The stock market greeted the bad news of the sequester by sending the Dow Jones Industrial Average to an all-time high. The Standard & Poor’s 500 jumped back close to its pre-2008 high. Unemployment dipped to 7.7 percent. The federal budget deficit, which President Obama has cut by $300 billion, was down 50 percent as a percentage of gross domestic product.
Still, the delusional denizens of Fox Nation continued to plan for economic meltdown and armed rebellion, convinced that the government is going to confiscate their assault weapons and attack them with unmanned drones.
Despite the best efforts of the tea party reactionaries of the GOP to drag the U.S. back in time and down in crisis, we’re back. Retail has rebound enough that L.L. Bean just gave its 5,000 employees 7.5 percent bonuses. Yes, we have a lot of room for improvement, but when the Maine Mall parking lot is so jammed on a sunny Saturday in March that you have to circle for a place to park and the stores are so full of shoppers that you’d think it was Christmas, you begin to get the idea that the recession is over.
That’s the good economic news. The bad news is that nothing has been done to address the root causes of the economic collapse – corporate greed and risky and illegal behavior by banks and investment companies.
The bailout worked once, but if Congress and POTUS start applying the same brinksmanship style of crisis management to the economy and financial markets that they do to the budgeting process, we’re going to be in permanent bailout mode.
Yes, the $16 trillion national debt is a serious problem and the economy is not growing fast enough (thanks in large part to government layoffs), but the more fundamental problem is the growing economic inequality in this country. The rich get richer, the poor get poorer. That’s why Romney got stomped. And that’s why we need the social safety net that conservatives seem so determined to unravel and remove.
According to the Center on Budget and Policy Priorities, a non-partisan think-tank founded in 1981 to study the impact of budget choices on low-income Americans, “the share of before-tax income that the richest 1 percent of households received has been rising since the late 1970s, and in the past decade has climbed to levels not seen since the 1920s.”
Can you say “Robber Barons?”
The CBPP also found the wealth gap to be even greater than the income gap, reporting in late 2012 that “the top 10 percent of the income distribution received a little less than half of all income, while the top 10 percent of the wealth distribution held almost three-quarters of all wealth.”
This concentration of the wealth of the nation in fewer and fewer hands is not earned, not deserved, and not right, but it is the deliberate and predictable result of tax policies and financial regulations written by the rich to favor the rich.
If average Americans of whatever political stripe want to take back this country from the bailed-out big-buck merchants of greed then everyone from Occupy to the tea party is going to have to get behind a few major reforms.
At the very least, we need tighter regulation of financial markets; sanctions on companies that hide assets and profits offshore to avoid taxation; higher taxes on unearned income such as inheritance and investments; and campaign finance reform to prevent corporate fat cats and plutocrats from buying Congress, the courts and the White House and continuing to rig the system in their own favor.
The double standard is all too obvious. When tax policies and financial regulations result in the redistribution of wealth upwards, that’s called capitalism. When public policies result in the redistribution of wealth to help the less fortunate, that’s called socialism.
Given a choice, I’d choose socialism, but the truth is that the system we have is a mixture of both. It is a managed economy with an element of free market economics. But when you come right down to it, the American economic system is a crap shoot in which who wins and who loses has nothing to do with who works hard or who deserves success.
We, the people, have turned our economy around by dint of hard work, perseverance and sacrifice. Now it’s time to tell Congress, especially the know-nothing, do-nothing tea party obstructionists, to get out of the way since they are clearly unwilling and unable to lead.