Splitting the Difference Between Myth and Reality Is Not Good Economics

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Common Dreams

Splitting the Difference Between Myth and Reality Is Not Good Economics

Told You So – The UK's Double Dip Recession and Ours

So now can we run our country on facts, not myths?

In the runup to the 2008 financial collapse, many progressives and even a few inside players warned against Wall Street’s house of cards, accurately predicting that unregulated hedge funds and widespread use of derivatives would result in a catastrophic crash.

But the folks in charge of our economy were a bunch of Ayn Rand acolytes who believed the market was infallible and government intervention and regulation was always bad and would stifle economic growth. 

Well, we saw how that turned out.

But we didn’t learn. 

Thanks to Democratic perfidy, instead we got an instant replay. 

And even after Obama’s stimulus program created or saved more than 3 million jobs we doubled down on the very anti-government philosophy that helped cause the recession in the first place.

People who taught our children; policed our streets; picked up our garbage; put out our fires; built and maintained our parks, libraries, and roads for a living wage became the scapegoat for the impoverishment the private sector imposed on workers.  Instead of organizing to win back their own living wages and lost benefits, people were convinced that taking away those of government workers would somehow make them better off.

Republican policies that should have been deader than a vampire in the middle of Death Valley at high noon with an oak stake through its heart, lurched to the fore again, and a robust economic recovery that could have been, never was.

Somehow, government – after creating jobs – was found incapable of creating jobs.

Somehow, big corporations – after exporting jobs and sitting on over $2 trillion in profits instead of investing in job creating expansions –became the “job creators.”

Somehow, lower taxes became the solution to the problem they caused -- debt.

Somehow, like Lucy duping Charlie Brown, we bought into the whole trickle down idea again.  It was as if we hadn’t noticed that it simply doesn't work.  Never has.

It was as if we hadn’t watched the wealth get concentrated into the upper 1%.  It was as if we didn’t know that this concentration was one of the main causes of the Great Recession of 2008, just as it contributed to the Great Depression in the 1930’s and the Depression of the 1890’s.

Somehow, we fell for the Republican’s "starve the beast" con again.  Somehow, we bought into the whole “government is the problem” cant, even after it had been revealed to be a bogus pretext for turning power over to the plutocracy.

Somehow, after stripping worker’s rights, exporting jobs, and lowering wages in the private sector, the solution to the increasing inequality between the uber rich and the rest of us became gutting state and local governments, and taking away public employees’ right to bargain – the very things that allowed the private sector to exploit workers. 

Somehow, firing people with jobs became the Republican strategy for job creation.  People who taught our children; policed our streets; picked up our garbage; put out our fires; built and maintained our parks, libraries, and roads for a living wage became the scapegoat for the impoverishment the private sector imposed on workers.  Instead of organizing to win back their own living wages and lost benefits, people were convinced that taking away those of government workers would somehow make them better off.

Divide and conquer politics.  The politics of fear, hate, greed, envy and spite. The race to the bottom.  Orchestrated by plutocrats, executed by conservatives, allowed by Democrats.

And so austerity and deficits were raised up like bogeymen and used to achieve -- through budget cuts, that which the American people would never agree to on principle – the gutting of all the government programs that had made the US a prosperous, just and civil society. 

And here’s where the I-told-you-so’s come in.

Every economist and policy analyst worth his or her salt warned against adopting austerity measures in the midst of a jobs crisis.  They also noted that deregulation had been a root cause of the 2008 collapse – in fact, many of them were the same ones who’d correctly predicted the 2008 collapse. 

Of course we must eventually deal with the deficit.  But the example of Britain and Europe show that austerity in the midst of a jobs crisis is a form of insanity. It ultimately makes deficits worse and leads to economic stagnation and double dip recessions.

But in a political world dominated by myth, and with a press given to putting “balance” before accuracy, truth and reality, and with a Democratic Party whose main tactic seems to be preemptive capitulation, no one listens to facts, no one argues against myths and no one gets credit  -- or credibility -- for being right.

But now we have Britain – a country which had no real debt crisis,  and which had been experiencing a modest recovery until conservatives took over and imposed their magic elixir of extreme austerity to cut deficits – slipping into a double dip recession. 

This of course follows the abysmal performance of Spain and Ireland both of which had budget surpluses before their economies collapsed under the weight of excessive speculation, and both of whom followed the austerity mantra of conservatives.

Of course we must eventually deal with the deficit.  But the example of Britain and Europe show that austerity in the midst of a jobs crisis is a form of insanity. It ultimately makes deficits worse and leads to economic stagnation and double dip recessions. 

We have an election coming up.  It should be a clear choice between a Party that wants to run the country on myths and one that favors reality. Unfortunately, Obama and the Democrats have decided to split the difference between reality and myth.   

So can we now, finally, drop the destructive right-wing myths and listen to the ladies and gentlemen who got it right before the recession, and who are calling it right now?

John Atcheson

John Atcheson is author of the novel, A Being Darkly Wise, an eco-thriller and Book One of a Trilogy centered on global warming. His writing has appeared in The New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News and other major newspapers. Atcheson’s book reviews are featured on Climateprogess.org.

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