It takes two types of people working together to cause a depression: a poor dumb person who borrows more than he can pay, and a rich dumb person who loans him money without checking that it can actually be repaid. Neither one can cause trouble on their own. It takes a conspiracy of fools to pull it off.
In our country, a whole herd of rich dumb people loaned money to a whole herd of poor dumb people to go buy McMansions they couldn’t afford, and our economy crashed as a result. Someone’s going to pay, the only question is who. Given that both the rich and the poor were collectively dumb, in a fair world the “stupid tax” would fall equally on both of them. In a fair world, but not in this world.
Unemployment primarily hurts the poor (the rich live off their wealth, not their income), and inflation primarily hurts the rich (because it reduces the value of their wealth; poor people don’t have any wealth to hurt). The Federal Reserve has a mandate to minimize both. But it isn’t.
Today we live in a world with 9% unemployment, and 1% inflation, and neither one have budged much in 2 years. The poor are paying the price, not the rich. Inflation has rarely been lower; unemployment has rarely been worse.
Yet politicians have spent the past two years (and I’m primarily looking at you, Republican party) fretting about inflation instead of jobs. it’s only within the past few weeks, as the public realizes we’re on the verge of another recession (and politicians realize that we’re on the verge of another election), that politicians has started begrudgingly talking about jobs. Not actually doing anything yet mind you, just talking.
This goes against decades-old textbook economics (apparently our politicians don’t hold themselves to the same standards as the typical college freshman). Today our government can borrow for up to 7 years at *negative* real interest rates because savers are so scared of the economic outlook that they are *paying* our government to hold their money. Meanwhile, we have millions of unemployed sitting around doing nothing but collecting unemployment (assuming they haven’t run out yet).
Textbook economics says borrow a lot of money while it’s cheap (making the savers happy), hire a lot of unemployed people (making them happy), and use them to rebuild our crumbling infrastructure (highways, bridges, schools, water, gas, sewer). Take people and money that are sitting unused, and put them to work while they can both be had cheap, and make investments in our country that will pay off in the long term.
Fix the Internet, please. Our country *invented* the thing. Today we’re the laughing stock of the developed world. DSL came out 15 years ago, but my parents still have to use dial-up. Right now our country’s Internet network is ranked *27th* in the world. We’re behind such economic titans as Bulgaria and Romania. We need to step up. Let’s hire unemployed people to install high-speed Internet connections everywhere. It helps stimulate our economy today, and gives us a return on that investment for generations.
There’s a saying that you should never attribute to malice that which can be explained by ignorance. But as the years pass without action, as the poor continue suffering while the rich prosper, as our politicians continue collecting record campaign donations despite failing the majority, it’s becoming impossible to explain Washington’s actions as anything other than throwing the public good under the bus to pander to the rich. The only time the average person seems to matter is the few months leading up to elections, after which politicians get right back to full-time pandering.
Please note that I am not a wild crazy-haired hippy saying this. I’m a moderate Republican with an MBA from Vanderbilt. But I’m honest enough to call a spade a spade. It is time that our government worked for all of us, not just the people with the fattest wallet. Forget Wall Street. Let’s Occupy Washington instead.