In the days following Barack Obama’s ascendance to the U.S. presidency, right-wing media mullah Rush Limbaugh was reported as saying that he would rather see the country fail than Obama succeed. He reiterated that sentiment recently, saying, “I still want Obama to fail, lest their be any doubt.”
In a nutshell, it’s a driving force behind Republican congressmen playing a dangerous, savage game of brinksmanship in refusing to co-operate, at least to this point, in raising the legislated maximum of U.S. debt. The government has two weeks to do so or it will begin to default on a variety of payments and create a threat to the world economy that could make the sub-prime mortgage meltdown look paltry in comparison.
Republicans are using the opportunity presented by the looming deadline to recite their favourite mantra — less spending and no tax increases. It’s a familiar refrain, of course. We’ve been hearing it since Ronald Reagan was president. The song has been sung so long and with such fervor that even otherwise bright Americans have come to believe that there exists in their country some sort of magic, alternate dimension mathematical formula in which debts and deficits can be fought with decreased tax revenues. An elementary school student could surely find the fatal flaw in an economic approach that says we can live beyond our means, bring in less revenue and still reduce debt.
I find it endlessly fascinating that the American people stood back and watched eight years of Bush government wade into Afghanistan, Iraq and other nations and at the same time obsess about security measures, all without the slightest discussion about costs. Similarly, after Obama-led bailouts of the banking system in recent years, there has been a steadfast resistance to address the underlying problem that led to the economic meltdown — deregulation which, once again, has its roots in Reaganomics. You remember Reaganomics, that kindergarten economic belief that cutting taxes on the wealthy would have a trickle-down effect, the ultimate result being that huge wads of money in fewer pockets would eventually fall out and float down into the hands of the great unwashed?
It is remarkable about how complacent we have all been as we have watched for more than a quarter century our governments sell out our economies in exchange for artificial solutions to problems. How bizarre is it that Canadian and American economies are fueled by consumption, yet we have had governments that encouraged the elimination of manufacturing — all so that we the consumer can benefit from cheaper labour in other parts of the world? Henry Ford knew that to have a market for his Model Ts he needed to pay his workers enough so they could afford to buy them. Good luck finding someone with any political or economic influence who displays such wisdom today.
Interestingly, the American public seems curiously disengaged by the whole debt ceiling debate. Perhaps it’s because they have more important concerns, like a systemic unemployment problem that may not be resolved for decades. (Sure, the retirement of baby boomers should be opening up the job market, but where, other than the need to change our diapers and spoon-feed us our Pablum, are the jobs coming from?) We have placed an enormous amount of faith on the digital world, but only a tiny percentage of on-line businesses actually make money and those that do tend to be enormously successful, again putting lots of money in very few hands, leaving us once again to hope that this time the trickle-down theory might actually work. Don’t count on it.
There is ample evidence that the divide between the wealthy and the working class continues to grow, and that the average North American is working more to earn less, if he or she is working at all. A politically motivated economic meltdown could actually have the unintended effect of fuelling anger and dissatisfaction, pushing ordinary people to challenge a status quo that says they just aren’t very important to our politicians.
Lorne Eckersley is the publisher of the Creston Valley Advance.