The Real Job Creators

We hear a lot out of Washington these days about the “job creators.” We can’t raise taxes on the wealthiest Americans, or on small business, because they are the job creators. Income tax rates are the lowest they’ve been in decades, but that hasn’t resulted in many jobs being created. So, who are the REAL job creators?

The US economy is driven, ultimately, by consumer spending. And more importantly, by middle class spending. When middle class incomes have remained stagnant over the past generation, consumers were faced with the choice of going without or purchasing on credit. But credit purchasing cannot continue permanently. Eventually, the bills must be paid. And when the bill collector comes calling at the same time that housing prices tank, spending on consumer goods grinds to a near halt. It’s not surprising that when credit tightened in the fall of 2008, consumer spending ran off a cliff. And when consumers quit spending, employment fell precipitously as the entire economy contracted.

Businesses won’t resume hiring until they have a market for the goods and services they produce. And consumers can’t resume purchasing until they have money to spend. So, if we truly want to help create jobs, the best and the only solution is to get more money into the pockets of the middle class. We cannot expect the 1% to carry the economy. Sure, they have a lot of money to spend. In fact, they have more money than they can possibly spend. Putting even more money into their pockets won’t have the needed stimulative effect on the economy. Putting more money I to middle class pockets, on the other hand, will create demand for consumer goods. And increased demand will mean more hiring. So, in reality, it’s the middle class who are the real job creators. It’s time that Congress got the message.

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Required reading

I came across this piece from the Financial Times, which has replaced the Wall Street Journal in many quarters.  In it the author spells out the short-term political advantages for the GOP of “trickle-down” economics that come at the expense of potentially disastrous long-term consequences.  It sheds some light on the current attitudes of some members of Congress who see no problem in the deficits caused by extending the Bush tax cuts while at the same time decrying unemployment benefit extensions.  Do politics trump what’s best for the country and the entire global economy despite what most responsible economists caution?  Seems so.

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8.5% or 15.6%?

The official unemployment rate in the US is 8.5%.  But that figure tells only part of the story.  Back during the recession that occurred early in Ronald Reagan’s first term, the Labor Dept. played what I call “Calvin Ball.”  They didn’t like the way the game was going, so they changed the rules.  Two categories of workers were excluded from the new definition of unemployed.  Under the new rules, workers who had become discouraged and quit looking for those elusive jobs no longer were considered unemployed.  These were people who wanted to work but had been unsuccessful in finding work.  And anyone who was working at all was no longer considered unemployed.  No matter if they had only been able to find part time work and wanted full time work.  They were working.  That means that if you were working 20 hours a week or even 10 hours a week, you were considered “employed.”  No matter that you couldn’t feed your family or keep a roof over your head on that meager part-time job, you were employed and therefore not eligible for unemployment benefits.  Remember, Reagan was also the president who claimed that people were homeless by choice and that ketchup was a vegetable for school lunches.

We know that when Reagan changed the rules of the game, unemployment was over 16%.  That made it politically difficult to justify his voodoo economics, also known as supply-side or trickle-down economics.  But cut that rate in half, and it doesn’t sound so bad on the nightly news.  The problem is that it was smoke and mirrors.  Changing the definition doesn’t change reality.  And that has been characteristic of the way we’ve done business ever since, regardless of which party is in power.

So, if we were to go back to the old way of counting people as unemployed and include those people who want full-time work but can’t find it and include those people who truly want to work but have given up looking in sheer frustration, the REAL unemployment rate is 15.6%.  See this article in the LA Times for more detail.  And do take time to read the comments… including the one from the man who lost his six-figure executive job and is now working for minimum wage.  He’s no longer considered “unemployed” but how many people can honestly say he’s fully employed.   And in some ways, he’s a lucky one — he found someone who was willing to hire him even though he was clearly “over qualified.”

The administration says that unemployment is likely to hit 10% before things begin to turn around.  That means that the REAL unemployment rate is going to be more like 20%.  Remember that during the depths of the Depression, unemployment hit 25%…  So, perhaps this recession is simply a long and deeper than usual one.  Or perhaps it’s really a depression, masquerading as a recession because of the rule change.

[The term Calvin ball comes from the game of ball played between the comic strip characters Calvin and Hobbes.  When Hobbes began to win, Calvin simply changed the rules — generally without telling Hobbes.  Yes, in the case of the unemployment definition, the rule change was announced, but that was nearly 30 years ago, and many people today aren’t aware that the official rate is only a portion of the real rate.]

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Too tightly wound to unravel

We’re learning a bit more about the “unprecedented powers” that President Obama and Sec. Treas. Geithner are seeking to deal with instability that exists in the financial system. But to understand what’s needed going forward, it’s important to see how we got here.

In the 1920s, commercial banks were selling stocks to their customers in addition to making loans and taking deposits.  As stock prices rose, buying on margin became the way to leverage money into larger gains.  For example, you could buy 100 shares of stock, pay a portion and borrow the rest from the bank or brokerage house.  That worked so long as the prices continued to climb.  But as prices started to fall, the banks insisted that buyers cover their loans.  If you didn’t have the cash, you had to sell some or all of your shares, thus forcing the price even lower.  Not only were individuals speculating, but so were the banks themselves, and when the banks were no longer able to cover requests for withdrawals, panic ensued.  There had been previous panics, but nothing like what happened at the start of the Depression. Over 4,000 banks failed. Deposits were not insured.  If your bank failed, you were out of luck.

In 1933, the government passed the Glass-Steagall Act.  It established the FDIC to insure deposits and provide for an orderly take-down and resolution of failing banks.  (Banks pay into the FDIC insurance fund, and the taxpayers make up any overages.) We take the FDIC for granted, knowing that as depositors we will be made whole (currently up to $250,000) if our bank fails.  But that security came with restrictions and regulations for the banks.  To limit speculation, Glass-Steagall also separated financial institutions — commercial banks, investment banks, and insurance companies — based on the type of business they did.

All went well until we forgot the lessons of the Depression, and once again the siren song of laissez-faire economic theory took hold.  The Depository Institutions Deregulation and Monetary Control Act of 1980 allowed banks to merge.  It also gave banks, rather than the Federal Reserve, the power to set interest rates on deposits.  Two years later, the Garn-St. Germain Depository Institutions Act deregulated the savings and loans, and adjustable rate mortgages were allowed.

Within a decade, the savings and loan industry in the United States collapsed.  The cause of individual failures varied, but a common factor seems to have been the combination of reduced regulation, a lack of oversight, and the introduction of new and unproven financial instruments.  Loan underwriting got sloppy, and there were home equity credit cards.  Again, so long as prices climbed, all was well, but when other economic factors caused a slump in real estate prices, those credit cards resembled the margin buying of the 1920s.  The number of savings and loan failures swamped FSLIC, the S&L version of the FDIC, and The Resolution Trust corporation was established to dispose of the failed institution’s assets, i.e., the loans on their books and the bank-owned properties.  Many of these institutions were purchased by banks so that for depositors, life went on.

Despite all this, the pressure for additional deregulation continued.  In 1999, Congress passed and President Clinton signed the Gramm-Leach-Bliley Act.  It repealed that portion of Glass-Steagall that prohibited the mixing of commercial banks, investment banks, and insurance companies.  A series of mergers followed, and a new raft of exotic financial instruments was born.  It was a perfect storm, and the consequences were completely predictable. In fact, Senator Byron Dorgan (D-ND) was eerily prescient at the time, predicting the timing as well as the need for massive government bailouts and putting a lie to any who claim that nobody could have foreseen the current crisis.  One simply needed to remove ideological blinders and look at history.

When word first came that the administration was seeking new regulations, I hoped that they repeal Gramm-Leach-Bliley along with some of the other deregulatory actions and reinstitute Glass-Steagall.  But alas, it seems that the effects of Gramm-Leach-Bliley will be as difficult to undo as are those credit default swaps that sank AIG.

If financial institutions have combined into these new hybrid, uber-institutions, then it makes sense that to have regulations that apply to all aspects of their business.  And it also makes sense that we need a mechanism to ensure an orderly take-down should they fail.  FDIC works well, and it can serve as a model for any new mechanism.  I still hope Congress will re-think the wisdom of permitting a corporation to become so big and so entwined in the financial system that it cannot be allowed to fail.  “Too big to fail” sounds like it is a prescription for taking excessive risk — for looking at short-term, easy money.  While FDIC insures deposits, that’s not to say that the failure of a bank comes at no cost to the taxpayers.  The recent failure of Indy Mac cost the shareholders as well as the taxpayers.  The shareholder losses came as a result of Indy Mac ceasing to exist.  The taxpayers had to pay the administrative costs of disposing of the bad loans and foreclosed properties.

I don’t begrudge some people making more money than others.  But I wonder if anyone is worth 350 times the salary of the average American worker.  And I don’t begrudge bonuses, but shouldn’t there be some relationship between a bonus and performance?  Between a retention bonus and the recipient actually still working for the corporation?  I’m a big fan of stock options as a bonus, especially if there is a time lag between the time they’re awarded and the time they can be exercised (at the stock price at the time of the award).  That time lag ensures that employees will continue to perform; there isn’t much incentive to exercise the option if the stock value has declined.  I’m all for regulating to contain greed as greed (combined with the relaxation of regulation and oversight) was a major cause of the current situation.

Clearly we are part of a global economy; solutions need to to be developed in concert and cooperation with other nations.  And consumers need better protection from the rapacious ways of the economic Masters of the Universe.  These elements are also part of Geithner’s proposal.  There are still powerful forces who, despite the current situation, are disciples of laissez-faire economic theory.  They will fight any and all regulatory attempts.  And because Congress counts on them to fill their campaign coffers, Congress must be reminded that they represent the people, not just corporations.

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A solution to the AIG bonus outrage

For the purposes of argument, let’s accept current AIG CEO Liddy’s argument that the company is contractually bound to pay out the bonuses AND that their employees are the brightest bulbs in the pack — the only ones who can unwind the esoteric financial instruments that sent them into the financial toilet.  Yes, it’s a stretch, but stay with me for a minute.

If both those premises are true, put the bonus money into an escrow account, managed by some independent agent, payable when (and if) these folks have managed to right the AIG ship.  If they can do so, they will have proven that they are in fact deserving of reward.  If not, the company should be forced to sell off its remaining assets, the staff fired, and the escrow monies returned to the taxpayers.  At that point, let them sue — the former AIG will have no assets with which to pay them back, and these so-called experts will have been revealed as frauds, undeserving of bonuses.

Of course, both premises ring hollow.  The government was able to wring concessions from the UAW in exchange for federal loans — changes in a contract.  And loans (a form of contract) can be re-negotiated.  We’re told that the money the Fed and the Treasury (through TARP) gave to AIG is in fact a loan from the government.  So, why can’t concessions from non-union AIG employees be a part of the deal? The second premise — that these executives are the only ones capable of understanding the intricacies of AIG’s finanacing and that if the bonuses aren’t paid, they’ll leave — is also faulty.  Imagine trying to dance around your role in AIG’s failure on a resume or in a job interview!

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Possibly unrelated items – updated

As I scanned the news tonight, several items caught my eye.

First was this list of the 15 states having the highest percentage of $200,000 plus earners.  Interestingly, only one of the states listed, Texas, voted for John McCain last November.  The others voted for Obama, even knowing that their taxes would go up should he be elected.  Among these states was New York, home of Wall Street and the investment bankers.  Those of us who’ve been around the block a few times remember the term “limosine liberal.”  It refered to those people who, despite or perhaps because they were wealthy, understood that they had a responsibility to the rest of society.  And that sense of responsibility has consistently tended to indicate a set of political values that can be termed liberal.  One of the favorite epithets used by conservatives towards liberals is “elite” or “elitist.”  I would venture that most people earning more than $200,000 a year probably have a college education.  On the other hand, the GOP traditionally was the party of business.  Yet its influence is more prevelent in those states and those parts of states that tend to have a lower overall level of education — people whose interests are often polar opposite of the monied portion of the population.

Another thing that caught my attention is that the FDIC is reporting its first loss in 18 years.  Hmmmm, what was happening in the banking sector 18 years ago?  Ah, yes, the savings and loan mess — the last time we tried deregulating the financial institutions.  The president behind that was Ronald Reagan and his treasury secretary Don Regan.  I saw the consequences of that up close and personal.  I was working for the Resolution Trust Corporation, specifically dealing with cataloging the records of two failed institutions.  I saw the records of the bad loans the institutions had made, and they were nothing less than shocking.  In many instances there were multi-million dollar loans that were written off as total losses — not one payment had been made on them.  And the same relatively small group of individuals were the recipients of many similar loans.  At the time, such a practice was known as a bust-out, an operation that amounted to robbing a bank but which was legal in that it involved loans rather than an actual heist.

The last item was a report on the CPAC conference.  From the line-up and the issues of concern, it’s clear that the GOP is intellectually completely bankrupt.  They were an anti-Bush, anti-McCain crowd to be sure.  They seemed convinced that Hawaii was not part of the United States in 1961 when Barack Obama was born there, and that Joe the Plumber was the best qualified person to show them the way out of the wilderness.  How pathetic!  The economy of the country and the world is swirling around the toilet bowl and this is what they’re fixated upon?  If it weren’t so horrifying it would be laughable.  We need more than one political party in this country, but if this represents the GOP, it’s not only the party of no but the party of know nothing.

UPDATE: And it continues… this morning I read that John Bolton, that hardest of hardliners, the guy who couldn’t get confirmed as UN Ambassador but who Bush kept in the role as long as possible via other means, “joked” at the CPAC convention about how a nuclear bomb detonating in, say, Chicago, might be instructive to our president’s views on foreign policy.  And as if that weren’t only one more sorry episode in his history of ill-chosen remarks, the room erupted in laughter and applause.  Sick.

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Catalyze. He said catalyze!

More evidence that our new president is an educated adult.  Not only that, but he thinks we’re adults, too.  When President Obama used that word last night, I whooped with joy. Not only that, but he pronounced nuclear proliferation correctly, without even the hint of a stumble.  So nice to have an adult in charge.

Listening to Gov. Jindal’s pathetic response was painful, not that anyone would have relished going on right after President Obama.  David Brooks got it right.  The Federal Government is the only entity with the resources right now to get us out of our current mess.  To tout smaller government and lower taxes is truly a form of nihilism.  And it does not bode well for the future of the Republican Party.  If that’s the best they can offer, they deserve their fate.

For most of the last three decades, we’ve been force-fed a diet of, “government = bad; taxes = evil.”   We’ve watched as the fabric of the social contract has deteriorated into an attitude of, “I got mine.  You’re on your own”  as the top 1% pushed their way into the life boats and smacked down the rest of us as they pulled away from the sinking ship.  To hear them shriek, you’d think the proposed tax hikes on the top few percent were akin to robbery.  In reality, it represents a return to the tax rates of the Clinton administration — a time when we were all better off than we are now.  We’ve seen the impact of de-regulation on the airline industry, telecommunications, the banking system (twice!), and energy.  And as a nation we are less safe, less efficient, less prepared to compete in a 21st century global economy, and poorer as a consequence.  It is truly time for change.

Yesterday, Capt. Sullinberger, whose skill as a pilot is directly responsible for saving 155 lives, testified that his wages have been cut 40% and that his pension is virtually non-existent thanks to “cost cutting” efforts by his employer.  He uses is off-days, when he should be recouperating from jet lag, to work as a consultant to make up for his pay cuts.  And that all happened before the latest economic crash, during the so-called “good times” of the Bush administration.  Is that the way to attract and maintain skilled professionals — people we entrust our lives to each time we board an airplane?  We see teachers denigrated as part-time workers and paid accordingly.  How many parents do you know who urge their kids to become teachers these days?  Yet they are responsible for educating our kids, the people who are the future of our society.  We are a contradiction as a people.  We want the services that government provides, yet we are unwilling to pay for them.

Last night we listened as our president laid out his plan for the future of this country.  His vision is one where government should be measured, not by the amount of money it spends, but by the results that spending achieves.  No more “off the books” accounting tricks that haven’t really fooled anyone.  Transparency, accountability, responsibility, effectiveness — the qualities we expect from our government but which have been sorely lacking for years by the Congress and the Executive Branch regardless of the party in control.

Perhaps most importantly, he recognizes that there are linkages between seemingly unrelated policy areas that all affect our economic health as a nation.  Education, energy, healthcare, banking, housing, industry, national security — they are all related to our ability to survive our current economic crisis.

He also recognizes that there are things that government does better than do individuals on their own — especially things that require a massive investment of capital.  We’ve seen a decade’s worth of private wealth evaporate over the last six months.  And those with the capital seem intent on spending it on themselves and on a lavish lifestyle, not in those kinds of projects that build or maintain the infrastructure that will serve us well over the coming decades.  Their ideology says that lower taxes and privatization leads to smaller, more efficient government.  But if the past eight years are an indication, the result is more debt, more corruption, almost no accountability or oversight, and less efficiency.  Spare me the discussion of how the Democrats were in control of Congress for the past two years.  The previous 12 had GOP majorities.

President Obama’s call for personal responsibility — including saying that dropping out of high school is doing your country a dis-service — is music to the ears of all Americans, regardless of political party.  But the difference between President Obama’s view and that of his conservative opponents, is that personal responsibility is paired with empathy — another American value.  He understands that if we ignore those in need, we all suffer.

He believes that budgets should and do reflect our national priorities.  He understands that the so-called “movement conservatives” represent a fairly small minority — that when you begin to consider values, most people want government to serve all the people, not just the privileged.

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Ongoing stimulus debate

A commenter suggested that the funds allocated to the American Recovery and Reinvestment Act (aka the stimulus package) would be better spent by handing out checks to each person.  The final package comes to a bit less than $800billion or just under $2300 per person, not the $25,000 suggested in the comment.   The commenter also suggested that my preference for government administered stimulus funds indicated that I didn’t trust the wisdom of individuals to spend the money wisely.

The State of Alaska, flush with oil revenues last summer, provided funds of approximately $1200 per person to help their citizens pay for winter heating.  After some discussion, it was decided that rather than pay directly to the fuel providers, the funds should be transferred into people’s personal checking accounts.  The weekend the funds were in people’s hands, there was a run on wide screen TVs.  Few people actually spent the money as was intended — on winter heating costs.  How many of those people are now having to choose between food and fuel?  How many of those TVs were made here in the US?  Given that we Americans make relatively few things any longer, spending on “goodies” would likely create only retail and transportation jobs in the US while creating manufacturing jobs abroad.  What would be the long-term benefits to our country?

On the other hand, infrastructure projects create jobs in design, materials, transportation, and labor — the majority of them right here at home.  Information technology modernization projects provide jobs in installing, configuring and maintaining the systems, and in entering and verifying the data.

We’ve heard a lot of talk recently that the New Deal didn’t end the Depression — that World War II did.  I recognize that WWII was a necessary war to fight, but I cannot conceive of a larger government “make work” project.  Millions of people served in our active duty forces, paid by the government.  Millions more worked to build the planes, jeeps, tanks, guns, artillery pieces, and ammunition necessary to fight the war  — jobs that, while in the private sector, were paid for ultimately by the government, i.e., the American taxpayer.

People need to examine the changes in the unemployment rate beginning in 1932 with the introduction of the New Deal.  The rate dropped each and every year from 1932 to 1941 (the pre-war years) save the one year that FDR cut back on government spending.

We as a nation still benefit from many of the public works projects that came out of the New Deal — Hoover Dam, the Golden Gate Bridge are two that come to mind immediately.  A second massive, government-funded infrastructure project was our interstate highway system, begun during the Eisenhower administration.

Despite what conservatives want you to believe, tax cuts provide minimal stimulative power.  Infrastructure projects are far more stimulative, producing more jobs and thus income that can be re-circulated throughout the economy.

Finally, the commenter suggested that the bill should have contained defense spending.  The argument as to why is unclear, other than that defense spending is constitutionally mandated spending.  The current budget (FY2010) is crammed full of defense spending and the President has indicated that spending levels will remain high — if for no other reason than to repair and replace the materiel that has been consumed during our two current wars.  Certainly there are defense programs that could be trimmed or even eliminated, but the overall need for defense spending remains high.  Indeed, demands on our economy to provide the needed and promised care for our troops injured in Iraq and Afghanistan will continue to increase.

Then yesterday, a day after President Obama announced a plan to try to slow the number of forclosures in this country, a pundit went ballistic on the air, calling it a plan to bail out “losers.”  Given that the practices of mortgage brokers, lenders, hedge fund managers, and investment bankers are a significant cause of our current mess, I can only wonder if he would consider the TARP a case of bailing out losers as well.

The economic mess in which we find ourselves has several components — the near meltdown of the financial system, the housing crisis, and the crisis in consumer confidence that has led to a near halt in demand and the subsequent loss of jobs.  The economy cannot and will not recover if we fail to identify and address the problems in each of those components.  The TARP attempted to address the problems in the financial sector; the stimulus addressed the jobs component; and the housing plan addresses problems in the third leg of the economic stool.  It will take astronomical amounts of money to solve the problems.  But leaving it to the markets to find their level would likely find the United States reverting to a third world level economy.  None of us want that to occur.

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For want of a single vote

California, the eighth largest economy in the world, is in crisis.  Not only because of the general economic downturn, although that plays a role.  No, California’s crisis is in part self-inflicted.  The state has been without a budget since October 1.  Why?  Because of the rigidity of the positions in the state legislature.

Meanwhile, the state’s bond rating has been lowered to junk status.  The unemployment rate is approaching 10%, severely affecting revenue from state income taxes, and the unemployment insurance fund is broke.  One in every 25 homes in the state is in foreclosure.  Home values have plummeted 50% and more in some areas, putting a further crunch on the revenues coming from property taxes,  Housing construction has ground to a halt. Tax refunds have been suspended in favor of IOUs.  Consumer demand has dried up, affecting the revenue stream from sales taxes.  Public works projects — yes, infrastructure jobs — are being halted, adding to the ranks of the unemployed.  Our roads and levees are in need of critical repairs.  Over the weekend, the legislature tried to bridge the $40 billion shortfall with a  combination of reduced spending, temporary increased taxes, and borrowing.  The reduced spending will hit hard.  Education will be particularly hard hit, as will Medical (California’s Medicade program).  But after a 30-hour marathon session, the budget came up one vote short.  One Republican vote.  One vote from the minority party, in the State Senate.  Sound familiar?

The state has cut back on hours for most offices and imposed mandatory furloughs two days a month to trim expenses while the budget battle continues.  School districts are facing hard choices — laying off staff, closing schools, cutting services.  Today, layoff notices will be sent out. Ten thousand today, going toward twenty thousand.  And public works projects, including ones in process, will be canceled–even though there will be additional costs incurred in canceling them.  Not surprisingly, our governor is one of the GOP governors who support the stimulus plan.  As I pointed out in a recent post, California sends more money to Washington that it gets back. And California can cover only $6 of every $10 that is obligated.

Some thirty years ago the infamous Proposition 13 was passed by California voters.  Sold as a benefit to tenants by apartment building owners, it essentially freezes assessed valuations of property for tax purposes until the property is sold.  The result is a wildly skewed system.  People who’ve owned a piece of property since before the initiative’s passage are essentially paying property taxes on the value of the property a generation ago.  So, the taxes on the house I sold in 1990 quadrupled at that point.  A family member whose home is worth at least twice that of my current home pays just over 10% of my property tax burden.  And despite the fact that my own home has lost value to below its original purchase price six years ago, this year’s tax bill was higher than last year’s.

The leadership of both parties in both houses of the legislature say that the proposed package makes the best of a bad situation.  Both sides give up some things to get other things they want.  But apparently that isn’t good enough for some members–Republicans who have taken a no-tax pledge.  Compromise isn’t a part of their vocabulary.  Nobody wants to have to pay higher taxes, especially in the face of a serious recession.  But there are constitutional requirements that place restrictions on budget deficits as well as on tax levies without voter approval.  There are several senate Republicans who have decided that it’s better (at least for them politically) to continue their no-tax pledge.  Their leadership has told them they’re simply not going to get a better deal — that the proposal on the table is the best way to solve the crisis. But, rather than recognizing the dire straights in which California finds itself, accepting reality isn’t acceptable. They prefer engaging in a state-wide game of chicken.

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Stimulus vote post-mortem

Each week my local paper encourages readers to have their say on a particular issue.  While it’s certainly not a scientific survey, it does provide some amusing and maddening reading.  Many of the same people voice their opinions on a weekly basis, and given the frequency with which their comments appear, I figure there aren’t many others who write in or their views are in concert with those who select the letters.  This week’s question asked how they would have voted on the stimulus package.  Nearly 80% of the respondents would have voted “NO.”

But their reasoning (or lack of it) is illustrative of where they must get their news.  They parroted the misinformation about earmarks in the bill–there were none.  They parroted the misinformation that it wasn’t stimulus, it was spending–this in an economy where consumers aren’t spending, where credit is virtually frozen, and where the lack of demand is leading to increasing unemployment.  They parroted the misinformation that the New Deal didn’t work–despite the fact that unemployment was 25% when FDR took office, that the only year where it increased was the one year when he cut back on spending.  And they complained that the bill wasn’t searchable–it is.  They even complained that the package would cause the country to slip into a depression–implying that our current economic troubles are the fault of our current president, who took office only four weeks ago, despite the fact that the collapse has been occurring and accelerating for over a year.  All these lies are what the GOP has been feeding to its faithful followers via Rush and Fox News.

Yet, much like the national Republican party,  there’s a definite lack of alternative ideas.  The message seems to be “just say no.”  Oh, there is the tired dogma of lowering taxes, along with the mantra that government doesn’t create jobs.  I suppose they get that from the astounding statement from RNC chair Michael Steel that work somehow doesn’t equate to jobs.  If you remember, he tried spectacularly unsuccessfully to convince George Stephanopulous that while government might create work, those people don’t have jobs.  And then there was John McCain’s straight-faced accusation that the stimulus package was “generational theft.”  How he can make that claim after supporting the Bush tax cuts and financing two wars on borrowed money is quite remarkable.

But what both amazes and concerns me is that the GOP is claiming victory.  They see their almost unanimous lack of support as a positive thing–not for the country but for the future of the Republican Party.  It is one thing to oppose a piece of legislation.  It is quite another not to offer positive alternatives.  Oh, they whine about not being a part of the process–another bit of misinformation.

Clearly, the American people rejected the Bush economic policies.  Nine of every ten Americans believed that the country was on the wrong track.  President Obama’s victory was decisive, unlike Bush’s own self-proclaimed mandates.  Even in my own area, President Obama carried both cities of any size (about 150,000 people each)–the first time ever that a Democrat has carried both in the same election.  But I have yet to see anything coming from the Republicans that offers any new ideas.  Given that all they have to offer is the old tired, rejected policies of the past, all they have left is to try to obstruct.  How sad for them and for our country.

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