Monday, September 12, 2011

Another September anniversary

The one the right wing in America wants you to forget

Where were you the morning of September 15, 2008? What did you do, as you watched the markets spiral downward in one of the biggest drops in the history of the Dow Jones? What did you think, as you watched the employees of Lehman Brothers filing out of the office tower with their possessions in cardboard boxes? Or have you already forgotten how we got into this mess?

Three years ago, the collapse of Lehman Brothers and purchase of Merrill Lynch over one September weekend represented the scariest moment in the financial meltdown. The announcement that there would be no bailout for Lehman and the corresponding bankruptcy filing set off a chain reaction. Lehman's collapse was followed the next day by an $80 billion bailout of AIG, and the passage of the Troubled Asset Relief Program on October 3rd. Lending seized up, housing values plummeted, and the economy ground to a halt, losing over 500,000 jobs a month for the rest of 2008.

By the time Barack Obama took the oath of office in January 2009, the economic tailspin had resulted in over 2.6 million lost jobs in the previous year. The Recovery Act was passed with only 3 Republican votes in February 2009. That same month we lost another 651,000 jobs. By then, the first time anybody had done anything to boost employment, the U.S. had already fallen a staggering 6.2 million jobs behind what was needed to maintain 2007 levels of employment. At the beginning of 2009, we had 11.1 million unemployed people in the U.S. As of August 2011, we have 14 million. That's nearly the combined population of New York City, Los Angeles and Chicago, America's three largest cities

Over 6 million of those have been unemployed for over 6 months. When you include all people who can work and want to work full-time but are not so employed, 16.2% of the U.S. working age population is unemployed or underemployed. That's nearly one in six American adults. This is a crisis. Worse, it's a crisis with a genealogy that has been denied and obscured by the same people who are its progenitors. The DNA of this crisis is a right wing agenda of deregulation and tax cutting abetted by Democrats who too often share the belief that regulation and taxation are the problem. 

Consider Michele Bachmann's 9 point plan in her response to President Obama's job speech:

1)   Repatriate American business dollars earned from overseas,
2)   Massively cut spending and the size of government,
3)   Repeal Obamacare, which is the government takeover of America’s healthcare system,
4)   Cut taxes, including corporate taxes,
5)   Repeal Dodd-Frank,
6)   Repeal job killing regulations,
7)   Increase exports by finalizing free trade agreements,
8)   Spur new investment in America, inspire innovation,
9)   Provide job creating energy solutions, including decreased regulations on developing new energy supplies from our abundant domestic energy resources.

Far from being short on cash, American corporations quickly returned to profitability and are now sitting on the largest pile of cash in recorded history. Unregulated credit default swaps, junk mortgages packaged as AAA bonds, and years of blind faith in a self-regulating financial sector caused the financial collapse. Tax rates had never been lower in my lifetime than they were in September 2008, and they are even lower today. Dozens of Fortune 500 including giants GE, Exxon, IBM, and Yahoo pay little or no corporate income tax since 2008. The number of local government workers has fallen by 550,000 since its peak in September 2008. Despite ratifying free trade agreements with 11 countries during the Bush presidency, we saw labor shift overseas. Despite 8 years of a Texas oil man in office, with all of the corresponding access and subsidies, gasoline averaged over $4/gallon on September 15, 2008. Or have we forgotten that too?

We do not have an over-taxed, over-regulated market place. There is no shortage of corporate cash or corporate profit. The "job creators" have never had lower tax rates on their capital gains or their income. We have "freer" trade than ever. We have fewer government employees, and continue to slash their wages and benefits. Real wages for American workers have been falling for a decade, and American labor productivity is incredibly high. 

The bottom line is that the economy will not recover until we have more people working for higher wages and with more job security. So far, conservatives have successfully played on the fears and divisions of American workers to advance their political ambitions while rewarding their corporate donors. And at its best, President Obama's triangulation strategy blunts the worst of the GOP agenda while accepting the premise that taxation and regulation are the problem.   

The transformation of the people who caused this crisis into victims of a "gangster government" will go down as one of the greatest PR campaigns in history. But we are reaching the nadir of this message, if only someone has the courage to articulate a response.

This response starts by remembering September 15th.

Follow me on Twitter @aaronklemz

(Photo: Wikipedia)

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