The corruption that is now America is so widespread there is no recovery apart from total meltdown, reorganization and reconstruction. This country has a long history with injustices: slavery, immigrant exploitation, civil rights abuses, sexual abuses, internment camps, torture. Worst than that it has spent decades defending past abuses and only reluctantly changes. The arrogance that is America is breathtaking. America suffers from a pious view that it is a special place, abuses a vast military to invade sovereign countries, consumes disproportional shares of natural resources, and exports a greed mentality.
Corruption is rampant in every aspect of America life. There use to be an underlying spirit of America that was optimistic and believed that things would improve and good would overcome evil. No more. Evil has won in America. You can see it in the health care system where daily greed wins out over humanity. You can see it on Wall Street where the few are privileged over the many. You can see it in Washington D.C. in politicians like Shelby, Boehmer, and Bachmann. You can see it with Supreme Court Justices like Scalia. You can hear if on the radio with people like Limbaugh and Hannity. You can see it on TV by watching Fox News or listening to Dobbs or Scarborough. You can see it with the vast array of lobbyists and special interests who poison the food, water, and air for money. Corporations are exploiting natural resources in the name of capitalism and nobody can stop them. The legal system is corrupt and the prisons are bursting at the seams. The churches in America are evil marketing organization that only pretend to believe in higher principals. Schools and universities are ponds to corporate interests with dumbed down curriculum passing out certificates and degrees that mean little. Nearly half of all Americans make less than a living wage, corporations demand workers agree to greater concessions, and still outsource jobs overseas to maximize exploitation. Through it all, the vast majority of people in America only care about their own self-interests. There is no greater good — just more evil.
At this time in America who really cares if there is another terrorist attack? Why does it really matter? The entire system has to be purged of the evil that is America and new countries need to emerge. Most Americans would leave and move to other countries but they can’t. Nobody wants them. Why would countries want Americans anyway? They would just bring the greed first mantra and their own self-interests to countries which have fought against such abuses. Even countries like Germany where World Wars started, now have a more humane view of their people than America.
America is doomed.
When the final history of the collapse of America is written, it will be laid at the feet of the financial markets, citing both corruption and greed. For decades America has heard about the ‘entitlement’ programs and how people want handouts for not working. This is usually followed by a story about a poor minority on food stamps or some other type of public assistance. This is always told by a privileged member of society.
Yet, behind the scene the true “cheats” were not the people trying to survive, it was the entitled rich. The people who thought it was their right to make $MILLIONS in compensation on the backs of the disenfranchised. Truly, nobody is worth $MILLIONS when millions cannot even support themselves. Not only are 11 million Americans unemployed but another 20 million Americans are underemployed — working part time jobs. Nearly 50 million Americans do not make a living wage. Consider that — 50 million Americans do not make a living wage. There are only just over 100 million people employed in the U.S.
The U.S. needs to pay every adult a living wage because nobody should be allowed to make more than that until everybody makes the minimum. There is an intrinsic value to each person and a living wage is the validation of that intrinsic worth. The living wage must include all basic necessities: food, shelter, clothing, transportation, basic computing, education, and health care. At just a living wage, the person has no money for luxuries of any kind and certainly no money for taxes. If half of America makes just at a living wage, America won’t even work very well, because America needs their citizens to have considerable disposable income to buy the ‘nice to have’ items which, in turn, employs others.
Consider who actually creates the demand to employ others. It is not the rich person who “invests” in the latest hot start up as is the general wisdom. This is because the rich person is not able to create these investable dollars without the consumption of the masses. Thus, it is the masses that spend the dollars that allow the owners of the business to amass money that is eventually invested in new companies. If you take away the masses’ ability to consume, then you also take away the necessity to create new businesses and business ability to employ.
The economic recovery will only occur when demand is stimulated. You can stimulate supply forever and never generate real recovery. This was the lie of Reaganism — “supply side” economics. The idea that if you gave more and more money to the rich, it would trickle down. So, Reagan reduced taxes on the rich and this was continued in both Republican and Democratic administration, culminating with George W Bush’s infamous tax cuts. Ultimately, this supply side nonsense resulted in a collapse of the entire system. Yes, the entire system collapsed and it is only with $TRILLIONS of bailout that it is being propped up — for now.
However, until the demand is stimulated there will be no recovery. The only way that the demand is stimulated is to create ‘good’ jobs. A good job means one that pays at least a living wage and preferably twice that. It is a job that would traditionally be consider ‘middle class’. Middle class is simply a reference to a person who has disposable income after his basic necessities are met.
As the middle class was destroyed, businesses had to find “creative” ways to make money. For decades these creative ways have been financial gimmicks. In fact, all of the earnings growth for large companies for more than a decade in America have been financial transactions. This was not real growth it was manipulated growth. It involved mergers, acquisitions, and even risky bets on financial derivative products. Through it all ordinary Americans were laid off and even paid less as the life of the middle class was squeeze out. As the destruction of the middle class continued, Wall Street moved higher with fake earnings. Eventually, the system crumbled and it doesn’t really matter what pushed it off the cliff — something was going to eventually. Yet, even now the Republicans want people to believe it was giving loans to minorities that caused all the problems. It is laughable and scary to think that Republicans actually believe the nonsense, considering the implications of the lie. That is, if one believe this lie then the solution will not be to stimulate the demand since the argument is the demand was the problem.
The economic crisis could be solved tomorrow if the government announced that every person in America would be given a living wage. Companies would not be allowed to employ anybody full time for less than a living wage. Taxes would be increased on the people with the highest income and distributed to people at the other end of the spectrum. Public work projects would be formed to employ the millions who need jobs. Companies which were involved in basic necessities would be converted into non-profit companies. As more and more people started making living wage salaries, at a minimum, demand would increase. As demand increased companies would be formed to satisfy the demand, more people would be employed, and eventually higher wages would be required.
It is interesting that America is so invested in the supply side of economic growth that most of the decisions are to prop up the supply. This is seen by propping up failed financial institutions and insurance companies. This gives the appearance of saving the economy. However, this approach is satisfying in the short term as people think the system is being saved. Yet, it does nothing for the demand side of the economy. Until the demand side of the economy is stimulated, there will be no real recovery. At best it will just be moving around money similar to a game of musical chairs. Each chair being removed represents the continued destruction of demand. As more and more chairs are eliminated the people who are out of the game will organize to destroy the remaining chairs. Republicans will consider the people out of the game terrorists.
America is doomed.
Hopefully, the passage today of the punitive tax against bonuses of failed financial institutions, like AIG, will be the beginning of taxing the greed out of America. Clearly, this has to be passed by the Senate, signed by Obama, and nothing can be assumed. It is encouraging that ordinary Americans are outraged about excessive compensation. Unfortunately, this type of excessive compensation has been around a long time and still continues. Nobody should be allowed to take excessive compensation without it being subjected to punitive taxes.
Most people don’t understand there are many ways to compensate: salaries, bonusues, and stock options. I believe there should be a methodology that punitively taxes all forms of compensation once it is determined to be excessive. For me, anything over $1 million per year in total income is excessive and the rest should be taxes at 100%. On the other end of the scale, I wouldn’t tax anything less than a living wage which is roughly $30K per year in many areas of the country.
If you think about the U.S. tax code nearly all of it is not for ordinary Americans. That is, anybody who uses only standard deductions and personal exemptions, represent virtually none of the tax code. I am for eliminating the entire tax code and implementing a very simplified system based on cash accounting. That is, after everybody determines the amount of their annual income, they apply it to a tax table that is incremented by the living wage. There is no tax for the first bracket that represents income up to a living wage. In the second bracket, there is a very small tax. So, people can make twice a living wage and pay little in taxes. Each successive bracket, pays a greater amount of taxes. Once the income is above $1 MILLION, the tax is 100%. This is all very simple and fair. There is still plenty of incentives to make more money for 95% of the population who will never make a $MILLION per year.
Let Congress hand out tax credits to encourage specific behavior, e.g. like buying a fuel efficient automobile. There are no deductions at all. Instead, have a simple list of tax credits that are available published on the IRS web site. Everything clear and transparent. Even though this is a very fair system, it is unlikely it will ever be implemented.
America is doomed.
For profit companies are just plain bad for America, and today there is another example. Turns out that hybrid sales are down, rather dramatically. This is because hybrids are more expensive and gas prices are lower. First, why are hybrids more expensive? Because companies can charge more because these vehicles get better mileage. Yet, isn’t Americans driving cars with better gas mileage good for America? So, exactly why should should these vehicles cost more? Answer — capitalism and greed.
However, when gas prices were higher hybrids were sold for thousands of dollars over the sticker price. Why were hybrids even more expensive at exactly the time when people needed to be buying them. Answer — capitalism and greed. Thus, capitalism’s greedy mantra is resulting in exploiting ordinary Americans and causing exactly the wrong behavior. America needs consumers to be buying the vehicles with the best gas mileage in order to use less fuel, and not be buying automobiles with poor gas mileage. Does capitalism care about that? Absolutely not. Even if gasoline cost $10 a gallon, those vehicles with horrible gas mileage would sell for lower and lower prices while the cars with the better gas mileage would cost artificially higher prices. Capitalism always exploits.
Further, companies making big profits never results in more employment. It only results in better returns for shareholders. In fact, even extremely profitable companies will lay off employees in order to be more profitable. These companies are never concerned about laying off people and the implications toward the overall economy. For example, wouldn’t it be better if more people were employed and they would spend their wages on buying more goods and paying taxes? Of course, but this doesn’t matter to all the companies that want to make more profits.
Over and over again, capitalism’s greed interferes with people doing the right thing. The greed advocates call it ‘supply’ and ‘demand’. Instead, capitalism always leads to destruction, and government must assert itself to help people counter the greed forces of capitalism. For example, it should be illegal to sell hybrids for above the sticker prices, vehicles with poor gas mileage should not have lower prices, and high mileage vehicles should never have artificially high prices. All of these things require government to intervene, and the ‘private system’ will always do exactly the wrong thing.
Similarly, capitalism will lay off people in the name of profit at exactly the worst time. When the economy is struggling and it is important to have as many people employed as possible, capitalism will conclude this is the time to cut back on expenses — like people. These companies will cut back to the extreme. So far that it will take government to create ‘stimulus’ in order to create jobs — jobs that the ‘free enterprise’ system could never create because they are too busy contracting.
Even when companies completely fail, it will be government that has to save them. Had the government not intervened, then the entire U.S. banking system would have ceased to exist. This would have resulted in millions of people being unemployed. Plus, no credit would result in millions of others losing their job. In the end the government was the only thing that could intervene. Sadly, when government intervene they wanted to maintain the same old stupid system that caused the problem in the first place. All the banks should have been nationalized and the ‘for profit’ completely eliminated.
Capitalism is a failure. It is great at creating unsustainable ‘bubbles’ that ultimately collapse. Capitalism is great at enriching a few at the expense of the many. However, capitalism will never create a sustainable model without oversight — and government is the only oversight there is. Capitalism will always have people doing exactly the wrong thing. When things are in short supply, capitalism will punish the masses and favor the ‘rich’ — every time. When products are plentiful capitalism will crush suppliers and government will have to subsidize in order to avoid supply destruction, like subsides for farmers which have gone on for decades. The free enterprise system causes these anomalies and it is always government that has to intervene.
America cannot afford to have the boom and bust strategy when it comes to basic necessities — things that people require for basic living. Sure, let it boom and bust for the latest ‘nice to have’ consumer electronic, but not for food, housing, utilities, health care, and transportation. Basic necessities should all be nationalized and never let the greedy capitalists get their hands on that. It is inevitable, capitalism will be replaced.
Unfortunately, until things change there is going to be lots more pain.
America is doomed.
I applaud President Obama for his stimulus package and the practical things he is doing to help people who are suffering — the unemployed and the homeless. There are plenty of things I would have done differently, including not bailing out any banks. Yet, I am glad that after spending literally $TRILLIONS propping up the Wall Street crowd that a little money will be spent helping people stay in homes. All of these efforts are going to help but they are only the tip of a very big iceberg.
The American economy is still going to suffer greatly for a long time to come. The reason is simple — jobs and wages. People cannot exist in America without jobs and living wages. In fact, this is what makes this current crisis so much worse than any previous downturn. There have been plenty of downturns when people lost jobs. Yet, in the past once the economy recovered people were able to find jobs again so that they could support themselves. But things are really different this time.
This time there is long term destruction of jobs because of technology and outsourcing. Most of these jobs will never come back. For example, let say that somebody wanted to start a business today. With very few exceptions, a business would be able to utilize technology and outsourcing to reduce costs and would only employ a fraction of the people required in the past. This is extremely significant for the long term of America, because people who are losing jobs in this downturn will never get those jobs back.
At some point the ‘unemployment rate’ will decline because of the way it is calculated — just ignore it because it is a fraud. Once people stop collecting benefits they are considered employed — doesn’t matter if they are or not. Instead, follow the total number of employed to discover that people are not getting jobs. Plus, don’t forget that America needs to create about 125,000 jobs a month just to stay even with increases in population. Think about that in terms of the nearly 5 million jobs losses since this downturn began.
Likewise, wages are a big problem. For America to function it has to have a large middle class with plenty of disposable income. The disposable income can be used to buy things that will employ others. Reduce wages, reduces demand which results in more unemployment. More unemployment reduces wages because employers can pay workers less. This is a vicious and destructive cycle and the only thing that can stop it is government.
Why do you think that conservatives want their fake ‘free trade’ agreements? These companies want to pay workers less and maintain demand. Thus, they export their way to demand. American workers lose — and lose big. Plus, America hasn’t done such a good job at exporting goods and services to other countries. Instead, countries like China have flooded America with goods that can be produced at a small fraction of what it would cost in America. This is why WalMart sells all this stuff from China. Americans are consuming Chinese goods because their wages are low.
In the last decades and particularly since 2000, American business has been a sham. That is, these businesses have been making their profits on ‘financial transactions’ and not from their business. This is the reason there have been so many mergers and acquisitions and phony financial products like derivatives. This is the reason that all sorts of companies got involved in mortgages — it was a quick way to boost their profits — or at least they thought so. Why else would General Motors buy Ditech whose business is mortgages? GM was suppose to be in the business of making cars — instead, most of their recent profits came from banking. Also, businesses continued to reduced wages on Americans and even outsourced jobs overseas which reduce wages to Americans to zero.
This financial crisis is going to get much worse. It doesn’t matter if Wall Street has the occasional rally. Remember, Wall Street still has the same greed and corruption that caused this financial crisis running everything. They will figure out another idea or sham to inflate prices of some companies. They will inflate until they create another bubble and it pukes on ordinary Americans. Maybe they will need another bailout of the ‘too big to fail’ nonsense. Why not ‘too big to bailout’ instead?
The only long term solution to the problem in America is a capitalistic version of socialism. Specifically, any company that produces essential services (e.g. utilities, health care, news organizations, transportation) must be converted into a non-profit entity. These are companies that are required for the public good. There can be no shareholders in these companies other than American taxpayers. There must be new laws that require all workers be paid a ‘living wage’ — forget minimum wages which are less than half of a ‘living wage’. In addition, if unemployment persists then the government needs to limit the number of hours a person can work a week to something less than 40 hours. This needs to be reduced until there are enough jobs for everybody.
Education is important and it also needs to be targeted. The government needs to create incentives so that young people are pursuing education that will help the country. Sure, let people study whatever they want but give incentives to steer them in the right direction.
One good thing is that there is plenty of work that needs to be done in America — just look around! The problem is that private companies are not interested in developing businesses to perform this work because there just isn’t any profit potential in much of it. If there was there wouldn’t be 50 million people without health insurance. There wouldn’t be poor infrastructure throughout the country. There would be a thriving green economy. These are not businesses that American capitalists wants to invest in. Capitalism will always do the easy thing and for a long time it has been to hire lobbyists to manipulate the system and to create sham businesses like sub prime mortgages and derivatives.
After nationalizing all business that provides for basis necessities, there will be plenty of other things where entrepreneurs can apply their greed motive. In the process they will create some jobs.
If America continues with the same paradigm that has gotten us into this crisis, this crisis is going to last for decades. It will result in civil unrest. Unfortunately, this is what will likely happen.
America is doomed.
