The horizon is not so far as we can see, but as far as we can imagine

Bernanke at the Jobs Summit

Apparently he is pushing for cuts in social spending, and opposing increasing taxes on the rich.

So far Bernanke has been succesful at making sure that the rich weren’t wiped out by their failures and retained their power.

Trillions were spent bailing out the rich, and no taxes were levied on them to pay for it.  Now what will happen is that in order to balance the budget, money which primarily helps the middle and working classes will be cut, while those same middle and working classes will be forced to bail out the insurance and health industries.

At the same time, military spending is up slightly under 100% in real terms from what it was in 2000 (267.2 billion in 2000 dollars in 2000, 490 billion today).  The US economy has militarized and financialized.  Virtually everything that isn’t attached to one of those two streams (and remmber, the housing bubble was ultimately about financialization) is withering on the vine.

The decision to escalate in Afghanistan won’t cost 30 billion dollars a year, it will cost that money plus all the money which could have been saved by withdrawing from Afghanistan and cutting military expenditures significantly.

Coming and going, baby.  Coming and going.  First they used your money and credit to bail out the rich, now they are going to make you pay it all back, not the rich.  Meanwhile banks aren’t lending, jobs aren’t returning and you are due for the 20 worst economic years of your lives.

This is a bipartisan project.  Obama is as on board with it as Bush was.  It’s not an accident that he wants to keep Bernanke or that he hired Geithner, the man who was supposed to watch Wall Street, as his Treasury secretary.

The world’s financial elites blew up the world’s economy.  Now the world’s schmucks (aka. ordinary people) are going to be stuck with the bill.


Addendum: Paperwight wrote about this in 2005 when it was Greenspan doing it. Plus ca change


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  1. b.

    “The decision to escalate in Afghanistan won’t cost 30 billion dollars a year, it will cost that money plus all the money which could have been saved by withdrawing from Afghanistan and cutting military expenditures significantly.”

    Plus veteran healthcare and other significant follow-up costs for the wreckage, although veterans might get increasingly less of the health care that will be paid for.

    Plus this:

  2. I think I’m beginning to understand why it’s so important that nobody, especially the poor, be “underbanked.”

  3. anonymous

    Damn my blood is boiling. Sometimes I just wish this mess would hurry up and collapse already, cuz it’s obvious nothing will get fixed until it’s too late.

  4. Celsius 233

    I don’t know whether to laugh or cry. The rich have just been bailed out by the taxpayers; who don’t happen to be the rich; they’re everybody else.
    Who’d of ever thought so much treasure could be stolen from people with no money; there is a form of genius operating here. It’s a sick form, a criminal form, and a cold-blooded form that should’ve brought a rebellion.
    I would love to see one million people march on Washington and every-man-jack one of them brandishing a pitchfork. God! What a sight that would be…

  5. b.

    “I believe that the Democratic base, as well as the Republican base and the independent base, is interested in jobs, jobs, jobs, jobs. I think the focus is so much more now on job creation, and that really is what we are all focused on as well.”

    I believe that this is the typically shortsighted swill Democrit loss-leadership is dishing out. Job creation is not bad, but in a country in which 3/4 of the GDP is driven by domestic demand, job creation requires that those of us who do not have a whole lot of money need to get more money. Given that increases in productivity (by definition), esp. if driven by automation or outsourcing, decrease the amount of work to be done against the existing demand, there are limits to how much additional work demand can ge generated by (unsustainable) grwoth of existing demand, or even demand from markets currently absent or weak (domestic infrastructure, education etc.).

    In other words, there are hard constraints on how many “jobs” we can create, how lasting those “jobs” are, how well they pay etc. Further, it cannot be a healthy objective for a society that as many of its members work as many hours as legally possible in as many jobs as they can find, just to get by, at the expense of themselves, their families, and society at large. To increase productivity, corporations will always strive to press as much overtime as possible out of as many employees as they can afford to turn over.

    Whatever can and should be done about job creation, the most important issue is changing income equality. For some reasons, we have let ourselves be convinced that there is much less that can be done here – in a country that used to have a top income tax bracket of 95% on income over some 2 million inflation-adjusted dollars? How timid we have become in the face of unfettered greed, how ineffectual our clamoring to limit “executive con-pensation”.

    “Jobs, Jobs, Jobs” is not a call to take back your country from a dysfunctional oligarchy that is destroying it. It is stagnatist bleating from apparat-chicks that are focused on restoring the status quo ante at any longterm cost imaginable.

  6. b.

    By their sponsors (Daschle, Lieberman) and associates know them…

    Hence priorities as this: “Putting Americans Back to Work”

    Or is that “Putting America’s Back To Labor”?

    Jobs get a Summit, War gets a Surge.
    Shorter Obama “Jobs-plus-War” Day message:
    *Afghanistan* gets us the biggest bang for the buck.

  7. anonymous

    Funny how in 2001 Greenspan was testifying about dangerous surpluses as far as the eye could see in order to help Dubya pass his tax cuts for the rich (a complete about face from his deficit scoldings to the Clintons and Dems), when clearly the primary point of the tax cuts (enriching his cronies immediately was only a secondary, but welcome objective) was to recreate an entitlements crisis, because after Clinton they were losing the deficit as ammon against Soc Sec.

    Now that we have a financial crisis/asset bubble fueled in part by all that excess, idol money (oops, freudian slip, but I’ll leave the error) in the hands of the rich, it is wiser in the Fed’s view to cut our old age cat food rations than to reinstate the modest tax regime on the rich (tax rates under which the economy prospered before, but cannot be foreseen ever to prosper under again, and even speculating on raising taxes on the rich would be IRRESPONSIBLE).

    I don’t care if there isn’t anybody better out there than Bernanke to put in charge of the Fed right now. Any right thinking Senator needs to take this guy’s head for his arrogance, criminality, and complete partisanship on behalf of capital at the direct expense of labor.

    And I am very disappointed in Krugman for his muted criticisms of his old buddies.

  8. Every now and then the people of the United States need to take an incompetent little bureaucrat and throw him up against a wall just to prove they are serious.

  9. Ian Welsh

    The WSJ came out against him. Since they actually agreed with his policies, that means they’ve decided his credibility is so burnt up they need a new front man.

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