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A Proven 80-year-old Plan for Recovery

September 5th, 2010 · No Comments · Corporations and Industry, Economics, Labor, Media, Politics, Wall Street

The American People, according to polls, have now floundered their way into a strong majority willing to literally destroy their lives and those of their children. The latest polls show many Right Wing Republicans ahead in the polls.

This is beyond stupidity. If the Republicans were advocating a return to moderation, one might think that, well, the Democrats can’t get it done. Maybe maybe the Republicans will be more efficient. That is not what is happening. Take, for example, the people that the Neocon Republican Party is nominating.

Sharron (two “r’s”?) Engle of Nevada wants to do away with Social Security. So if she is elected, she will be another voice for “doing nothing” because the AARP, plus all those on Social Security, plus all the people between 40 and 65 who want to retire themselves with the Social Security will not allow it. They have been paying into Social Security since they were 18-years old and will not accept–during near-Depression economic conditions–how they will manage on an under-funded 401K and savings. Especially since their equity will have been depleted by the continually climbing costs (if Republicans get in) of private health care insurance.

Even if you were to make the cut-off date for changing Social Security those who are now age 45 or under, there is no way to keep the system going because the Republicans borrowed all the necessary surpluses for wars and tax breaks. The government can’t just stop paying Social Security Benefits. Even the Republicans with their total control of the media would never be elected again to so much as dogcatcher in the lifetimes of anyone now living. So it will be more deficit spending. Sharron Engle, to put it bluntly, is a dope and a dupe.

Even so-called “moderates” in the Republican Party are not really moderates when you examine them more closely. Rep. Mark Kirk of Illinois, running in a largely Democratic state, voted against a $26 billion bill to keep teachers in their jobs this fall as states all over the country are feeling the same pinch as the Federal Government. He has voted universally against all Progressive policies and in favor of both wars and both Bush tax cuts. Now–running for Senator in a very independent state, he has suddenly become a “born-again” moderate. Why?

Kirk needs money. In the Republican Party, that means appealing to the sugar daddies…the huge billionaires and the corporations who fund everything. Kirk needs them and he will always vote with them. More established, real, but barely moderate Senators like Susan Collins and Olympia Snowe don’t. They voted responsibly this time, in favor of keeping teachers in schools. We can only imagine what Kirk will vote against if elected. Zip up your pockets and keep your picture-ID with you at all times. And, if Kirk is elected, be very careful of what you say on the telephone and on line. He’s hard core on “patriotism.”

Former Attorney General of Colorado, Ken Buck, now in the national spotlight, running for Senator…from which position his ideas or lack of them, will adversely influence legislation on women’s rights, Social Security, Medicare and Medicaid. He calls Social Security, which is hands-down the most efficient government program ever, a “horrible system” and vows to dismantle it.

He is in favor of repealing Roe v.Wade, which will turn back the clock to the back-alley abortion era. He wants to bring the Christian religion into government…assuming that what he means is the Christian Fundamentalist religion. He wants to cut government spending and keep the Bush tax cuts for the rich. He wants to support the policies of a Senator that he says he admires above all, the arch-obstructionist, Neocon Senator Jim DeMint of South Carolina.

His hero DeMint has said that he wants to destroy Progressive policies. DeMint is in the pockets of every major corporate lobbying group and believes that the health insurance industry will save you while Medicare…which he would abolish…will not. DeMint is Buck’s leader and Buck will help him return the country to the Bush era, what DeMint considers great government.

So how do people like this, people who are totally irrational get into national politics rather than merely terrorizing the local school board or parks department? It may be the result of our poor educational system. A few years ago high school students were polled about who was the first President and many of them said Lincoln. Others were asked to find Washington D.C. on a map. They couldn’t. So can you imagine what would happen if these same people were asked questions on economics? They were, recently.

Economics is not an easy subject even for college graduates to understand. But if you take that strong minority of those polled as high school graduates who could not even find Washington, D.C. on a map…how do you suppose they would fare? They would get it wrong.

Slavishly following the Right Wing media and the crooked Neocon politicians, these dumber-than normal Neocon sheep say in polls that they would cut government spending rather than stimulate it. They don’t understand that there is no private economy and thus no workers and there for no income and therefore no income tax. Without jobs there is no spending and without spending, there is no economy.

Suppose you told the Tea Party members who think that “American Idol” or “Are You Smarter than a Fifth Grader” is really television entertainment, that we once, 70 years ago, had the same economic conditions we have now. Explain to them that the dire economic conditions lasted for many years. Despite some efforts at creating jobs, not much was done. The government of those days believed—not having been through it before–that the economy would soon return to normal on its own.

In the meantime, however, in the 1930s, people who could still find Washington on a map were marching there because they were starving, losing their homes, finding themselves suddenly as part of an enormously growing underclass.

Before the country knew, every fourth person that Americans saw walking on the street was out of a job. Nothing was working to create jobs. Then, in 1932, Franklin Delano Roosevelt was elected President. He began to create jobs. And as he created jobs the unemployment rate began to fall.

Over the four years before FDR became President, unemployment grew from 3.2% to 23.6%. After FDR took office, he created four million jobs in 2 months. In four years unemployment fell from 23.6% to 14.3%. But in 1937, FDR acceded to the demands of conservative politicians on both sides of the aisle…who had never experienced such deficit spending. Against his judgement and that of many economists, he cut the budget. In 1938 the unemployment rate soared to 19%.

In addition, despite Neocon assurances that raising taxes will be disastrous, Congress raised taxes in the teeth of the worst part of the Great Depression from a top rate of 25% to one of 63% and the economy did not falter, but actually grew by an average of 7% in 1934 and 8% in 1935. So in the 1930s before we asked the American people, its young men, to sacrifice 500,000 lives, we asked them and the wealthy to simply chip in to help restore the economy. They responded, as democratic societies should, and FDR began to turn things around.

Then came the preparations for war and the war itself. The war became the stimulus that we had needed all along. Of course not quite that large but much, much larger than early 20th Century economists (or apparently early 21st Century Neocons) could understand. The war provided an enormous stimulus that combined with the number of men and women on active duty, about 16 million, dropped unemployment to less than 2% in the middle of the war years.

The U.S. spent 123% of GDP on the war. Today that would be as if we spent about $21 trillion in 4 years. Actually George W. Bush came pretty close. Only his spending went to corporations and individuals who pay less than a third of their income in taxes and who simply became richer and richer and objected more and more to even paying taxes.

Some of those very rich people, like the Koch family and Rupert Murdoch and others who spend millions against Obama and the Middle Class like to stay even farther under the radar for fear of retaliation. After all, when all else is exhausted and the people really get mad…real citizens, not just nutty, racist Tea Party members…get really mad, then the guns and bombs come out. They always do eventually in revolutions. They let the stooges, like Bush disciple Dick Armey take the first bomb or bullet. That’s what they pay stooges for.

We paid off that earlier national debt in about 35 years. We would have done it sooner but the country continued to take on debt for subsequent needs beyond budgeting parameters, things like the Viet Nam War. There was large scale spending even after World War II in order to re-establish a peacetime economy. But even so, we had less than a trillion in debt before Reagan.

In 1932 when Roosevelt came in, he had two different philosophies, really. The Public Works Administration run by Harold Ickes identified projects and built them with private contractors. It was a construction-focused agency. For example, they built the Triborough Bridge.

Civil Works Administration on the other hand was a direct agency. People were hired directly and went directly to work improving roads or airport runways, sewer and water systems, and many other projects. Four million people were hired in two months. Of the money allocated 89%, of $1 billion ended up in workers hands immediately and was spent on increasing the economy immediately. Less than 2% was spent on overhead.

Today that amount would be about $16 billion and those 4 million jobs would be about 10 million jobs today. But you can’t make direct comparisons. That amount of money wouldn’t be enough today. It is a simple calculation to see that 5 million jobs at $40,000 per job (for one year) is $200 billion. That would be the amount we need to jump start this economy again. And only 5 million because we have mostly a service economy now, and 5 million would all go directly to spending on services which would create an almost one-for-one increase in employment. What is the difference if we pay unemployment or pay salaries for work.

This isn’t a Communist country. In normal times you could not find one out of a hundred men on the street who would say that they want the government involved in jobs. We ALL want the government out of jobs. The reason is simple. It costs us all money.

A year ago the President put the stimulus plan into effect, the American Recovery and Reinvestment Act (ARRA). It was flawed but it worked. At the time the President was planning it, the Bush-Cheney “escaped-thieves” plan was costing the U.S. Economy 700,000 jobs a month and had already lost about 2 million additional jobs in the previous (2008) year.

The President foolishly tried to get the Republicans to help the people in the stimulus plan. So he agreed to one-third of the entire stimulus in tax cuts. Tax cuts! A total waste of money. So we all got virtually worthless tax cuts and the stimulus was reduced in effectiveness by one-third.

Some of the stimulus went right to the states so that they didn’t have to face massive layoffs at that desperate time. They were able to keep teachers, nurses, firemen and policemen. But despite studies by the CBO that prove that tax cuts do not stimulate the economy (reports published under Douglass Holtz-Eakin in the first Bush Administration) they continue to support tax cuts for the rich…their patrons.

So we kept about 2 million more jobs from being lost, but we could not bring job growth up to a couple of hundred thousand a month, which is what we need. We are doing only about twenty percent of that or so each month and sometimes a little more.

Private industry and private banking are doing nothing. And the reason is that the huge corporations are backing the Republicans who have filibustered 400 jobs bills by now in the Senate to keep any jobs from being created. So, while $1.8 trillion sits in cash in big banks…banks that we as citizens bailed out…their Republican Senators and Congressmen complain about “too much regulation” and too much “uncertainty.” They blame the President who sends them the bills for jobs and then they vote to keep the bills from coming to a vote.

It is time that we decided who is going to run this country—the bankers or the People–and take the consequences. In 1930, a full forty years after the advent of electric power to cities, only ten percent of farms had electricity! The reason was that the decision was made by the private electric utility companies who said that it was unprofitable. They simply refused to go into rural areas.

So, today, making the same kind of analogy with the private health industry, if it would be unprofitable for the health insurance industry that you live, they would simply deny service to you. They would simply say that they were sorry but some sacrifice has to be made to profit. This is the difference between the United States since Ronald Reagan.

FDR said to hell with that and he ordered the enactment of a law that set up the Rural Electrification Administration in 1934. It set up rural cooperatives to do what the power companies said that they could not afford to do. In less than ten years, 90% of all farms had electric power. That’s the kind of President who will earn respect and get things done. Take on the vested interests.

In our era we need to do the same. For example, we need to say to AT&T, Comcast and the other Internet access providers that we need to be able to freely access the Internet without huge delays or slowdowns. It’s called Net Neutrality…not favoring big corporations over the average person who has paid his tab to an Internet service provider to be a part of the Internet community.

We need to say to big oil:get on board with green energy. We are sending billions to the Middle East where terrorists are being sponsored by oil sheiks in the same way as Tea Party members here in the U.S. are being bussed to rallies by the big corporations. Remember, the idea that green energy will cost jobs is simply a Neocon talking point from their sponsors, the oil companies. If you think rationally, you will see that coal, oil and other natural resources will pay a little premium, but we will create something like 1,000,000 jobs without an expiration date because the need for renewable energy will never diminish but only increase.

We need to say to big international corporations…keep your jobs and your headquarters here…period. If you do not, we will treat you as a separate category of foreign entity with no privileged status on bringing products back into this country. We need to say to big corporations…no more wholesaling jobs to Asia.

We should tell these corporations to start keeping these jobs here. Maybe they will have to be lower paying jobs, but keep those jobs here and keep them above the minimum wage. We should say to them that if they don’t support American workers they can’t accept American workers’ money for their products.

If we have to buy from China, we could set up U.S. quasi-government cooperatives to buy our own products directly from China and cut out these corporate middlemen. Then we could take whatever profits we make and use them to fund domestic manufacturing for green energy jobs or those products that we cannot get from Asia or products that we can make profitably here to serve the domestic market and perhaps the EU countries, where our wage equivalence gives us an opportunity.

Massive job creation is not something new. In the 1930s, Harry Hopkins spent a billion dollars and created 4 million jobs in two months, mostly in construction at first. But the CWA and later the WPA created jobs in accounting, in architecture, documentation, design, policy, statistics (IT), even in the arts. The Republicans work for the international corporations. They do not want jobs here. They want jobs in Asia, where they can make something for fifty cents and sell it to us for $10.00 and put the huge profits into the pockets of a CEO who is now making 400 times what the average worker makes. (400 x $43,000.)

We could take about 200 job descriptions and cover everything we need, hire people immediately, using existing government departmental payrolls (Hopkins paid people out of the Veterans Department) and spend a fraction of the money spent on the first stimulus. We can put 5 million people to work in less than 90 days using the same formula that Hopkins used.

The idea that we can’t do this is nonsense. The only people holding it back are the same people, the Neocon Republicans who are out stumping for the wealthy and rich corporate CEOs. The Neocon Republicans think that they have control of the airwaves….a thousand radio stations…an entire cable television network, one of the big three television networks, and literally hundreds of talk show hosts on radio and television who are paid to attack the Obama Administration on a daily basis.

You have to decide whether you will sit back and let these major corporations run this country the way it was run in the 1920s, with no regulation. We did that starting in 2001…until they did exactly what they did in 1929 once again in 2008…cause the entire economy to collapse. That has cost us more in tax revenue already than it would cost to make Social Security solvent out to 2050…when the population statistics will already have changed back and there will be a huge surplus. That’s right. They don’t tell you that, do they? Of course, if we elect Neocon Republicans they could steal it all again.

But it is even worse than that. If we do not return a Democratic majority in the House and Senate at a minimum, here is what the Neocons have said that they will do: try to repeal health care reform and go back to the old health insurance plan of 15-20% rate increases per year, coverage dropped, legitimate claims not paid. Go back to high insurance rates, usurious payday loans, complete deregulation of hedge funds, securities, and mortgage backed securities. They want to start over.

They have already said…Michelle Bachmann has said, Eric Cantor has said, Darryl Issel has said…that they will hold pointless investigations, one after the other…whatever is necessary to prevent legislation. They want to shut down government! They are open about it.

They want Clinton-era style non-stop investigations, witch hunts against Democrats for…who knows what? There are no issues about which Neocons have any legitimacy to talk about starting “investigations.” They simply know that it worked to try to bring down Bill Clinton. It is clear to anyone with eyes and a brain that they want to bring down the Administration of Barack Obama. He scares them and well he should. He is smart and he understands how to get legislation done. The only thing that they can do…since their backers want less government and more tax breaks…is try to hold investigations.

All they want to do is…according to their own spokespeople…tie up government and prevent it from enacting any spending measures. The only spending they want to increase is military spending. They have considered another war, this time with Iran. They want to get into all kinds of personal situations like banning abortion and gay marriage. They want to end valuable scientific research on embryonic stem cells for use against Parkinson’s, childhood diabetes, and various kinds of cancer.

Who wants this? People like Rupert Murdoch, the alien turned citizen by dint of his connections with the Republican Party. Glenn Beck, on Murdoch’s Fox News Channel, was so horrific a host that 200 sponsors canceled his show. That is something like…at least.. a million dollars a week. Probably more like $10 million a week. But Murdoch makes up the difference out of his own pocket.

Why? Because Glenn Beck, like the Lonesome Rhodes of “A Face in the Crowd” has the ability to tell anything to hicks and make them believe it. Anyone who knows the spectator numbers at NASCAR races knows how many million hicks there are in our society today. Murdoch knows that Beck will do anything for money, say anything Murdoch and Roger Ailes tell him to say and he persuades himself and others that he really believes it.

It is approaching Labor Day, a sacred day in which miners and construction workers and automotive workers and millions of others have given their lives and economic well-being to struggle against corporate power for a strong Middle Class. The corporations not only would but have already begun successfully to tear it down.

You must join, organize, act and support financially the Democratic Party through your local organization or your local union. This is the most crucial year our society has faced since 1941 and it is time we stood up as men and women and fought it out to victory.

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