Tuesday’s data suggested a nation struggling with expensive gas and devalued homes, where people are fearful for their jobs and wary about where the economy is headed.
Any positive signs that economists and forecasters may have cited need to be thrown out the window. Even with the consumer confidence index at 50.4%, down a whopping 7.7% from May, the worst may still be yet to come. This report should be a wake up call to legislators across the country on behalf of a nation in desperate need of more help.
As the economy worsens, more and more key players are getting on board with the idea of a second economic recovery package. But not everyone's where we need them to be to get something done in time to matter. For example Rep. David Obey (D-WI), powerful chairman of the Appropriations Committee free associated to Congress Daily (subscription only) and revealed that he doesn't quite get how urgent doing something to stave off this recession is:
"People use all kinds of terminology; I don't care if you call it a second supplemental or a second economic [stimulus] package -- to me there are all kinds of things that we need domestically -- but we need finish this job [war supplemental] before we can start thinking about the next one"
This pains me. Not only are House Democrats punting on telecom immunity, they're putting war spending ahead of domestic spending.
As I wrote on myDD, Bush's first economic stimulus package just didn't work. We didn't get the big sweeping surge of economic growth we were promised. Even what good news we've gotten was drowned out by a chorus of story after story of bad economic news. The costs of living are growing rapidly as employment becomes harder to find. Food is getting more expensive as food bank lines grow longer. The longer Congress waits to act, the worse things will get.
And the states can't wait for the aid that Democratic leaders say must be included in a second stimulus package either. State spending is the last prop holding up the economy and is at a tipping point. More than half of the states are facing crippling budget shortfalls that total $48 billion for the upcoming fiscal year. In the absence of aid from the federal government, states have been forced to cut vital services for many of our most vulnerable citiznes. The Center on Budget and Policy Prioritiesgives outlines the chopping block:
At least 12 states have implemented or are considering cuts that will affect low-income children's or families' eligibility for health insurance or reduce their access to health care services.At least 10 states are cutting or proposing to cut K-12 education; three of them are proposing cuts that would affect access to child care.
At least 11 states have proposed or implemented reductions their state workforce. Workforce reductions often result in reduced access to services residents need.
And when states are forced to do things like cut their state workforce, the economy suffers even more. According to CNN/Money:
With falling revenue from sales and income taxes, and property-tax declines looming, states, cities and towns have already laid off tens of thousands of government employees. Many expect more job cuts ahead as public officials struggle to balance their budgets.Economists say that cutbacks in jobs and spending by local governments could be a major drag on the overall economy.
It's cool that Obey recognizes the need for a second stimulus package. But he also needs to understand that each day he lets pass without doing something means the economic hole we're in is that much deeper and is going to require that much more federal spending to help us get out of.
It would be great if we forced our Congress to earn and live by the standards of the median income so that they actually know what it feels like to be "Middle America." Whatever the median income is, that is what they should earn.
Maybe then they will have a better understanding about how most people live.
The top tier, that is, the super-wealthy and globally oriented super elite are still doing very well and this is reflected in those "statistics," which primarily measure that in which they are interested. The economy of the (formerly middle-class) plebes or commoners is not. We have had earlier hints of this development in the confusion shown by politicians and a few economists when they were confronted by the recent "jobless recovery," i.e., the aborted recession of 2001 which was artifically stimulated by Greenspan's pumping excessive liquidity into the world economy... that same liquidity which is now coming back to haunt us in rising, doubtless uncontrollable inflation.
What we have here, thus, in my opinion, is not only the first few chickens coming home to roost from the drive toward what some call "globalization," but the leading edge of a fundamental change in the social-economic landscape of the future, a new phase developing in the way human beings organize themselves. I call this change Corporate Feudalism, for want of a better name at this time. There will be the international super elite or Super Class (see David Rothkopf's Super Class), many of whom are unimaginably wealthy and most of whom owe little more than lip service patriotism, if that, to the nation of their origin... and the rest of us, the worker bees all across the world whose sole function is to support this system. Oh, there will be a middle management level of the new nobility, to be sure, those who aspire to be super class, small business owners, the fringe apologists, the military commanders who control physical force and run the wars the Super Elite find useful, and there will be some lingering remnants of middle class lifestyle in (mostly Western) geographical areas, but on the whole we can expect to see a return to the standard historical division of society into the thin upper veneer (less than one percent of the total population) and the vast sea of plebes/peasants/commoners/lemmings.
Hopefully, the overall standard of living for this underclass will be much higher than that of, say, the peasants in ancient Egypt or the medieval serfs, pulled along by the entrepreneurial inventiveness of the rising super elite, at least at first, entertained by huge sports extravaganzas which are less bloody than Roman circuses...
Seems to me Democrats should begin a concerted attack on the conventional wisdom of Harvard Business School's basic philosophy and rigid orthodoxy (short-term profits uber alles, over-compensated entrepreneur also uber alles) is not only not God-given and righteous, but is wrong and is not "natural," but that it is, in fact, little more than one more aberration in humanity's slow climb to a civilized way of life for everyone. I do not mean that capitalism is wrong, but that the present form of it is corrupt, a kind of "jungle or disaster capitalism" that is not sustainable in its present form.
I fear that, if we do not quickly establish this point of view, the right-wing apologists will co-opt the discussion and make sure we learn the wrong lessons from their disaster, creating (as they do so well) an alternate reality which, instead of reforming the system, will entrench it even more.