Mid Term Thoughts, Tax cuts and Quantitative Easing

Sorry for the absence.  My new job is a major stress, and grad school is kicking my ass.

Ok.  Disappointment.  Given that the Republicans will not add ANYTHING to the debate for the next two years owing to a strategic necessity to get a Republican into office in 2012, I despair.  Not for partisan reasons, but that means that the suffering of the middle class and the poor will continue for at least another six years, if not worsen.  Already displays of racism, and calls for insurrection, and secession abound, what else is in store?

Tax Cuts.  We've discussed this a great deal in my tax class, and even though my tax professor has argued against letting them expire, the only argument he can offer in support is that "you don't raise taxes in a bad economy."  Which is exactly the opposite of the truth.  Taxes are predominantly raised during bad economic times.  Why else?  Government revenues are up when people are employed and making money.  And government automatic stabilizers need funds during the down times.  That said, I think the best graphic I've seen yet on this was in the Rachel Maddow show (god bless her).  Deficit concerns aide, do 98% of Americans really want to underwrite that massive bloat, for rich arseholes who did more to contribute to the recession than any other demographic?

Quantitative Easing.  I love this term.  I want to write a song about it.  Or a poem.  We keep a bottle of Quantitative Easing under the nightstand.  There's a lot of on air blather about this out there, but there a couple of things you should know.  The main concerns are inflation, capital flight, and deficits.  The fears of inflation are irrelevant right now, inflation is at all time lows.  One of the commentators linked to above insists that the Fed can directly increase inflation by creating money in bonds.  This is the Fed's job, they do it everyday, and the fed uses the same metrics to calculate inflation regardless of how they choose to do it.  If inflation gets too high, the Fed can simply retire the debt.  This is ordinary monetary policy, what's unordinary is the fantastic amount of money they're planning on creating.  Capital flight fears are more interesting.  They suggest that the new money coming into the system won't be used in this country at all, it will be used in growth markets like China and India, where GDP is going up 10% a year.  This seems a more reasonable critique to me, but to be fair, investment in developing markets helps us too.  As the standard of living rises in the developing world, labor prices increase.  There are huge rumblings of this occurring in China and India already. Which means the gross export inequities between East and West will eventually have to end.

Anyway, I have one simple argument for Quantitative Easing.  The Fed doesn't need Congress to do it, and the economy needs something, now.  And given the disastrous midterms, Obi One Bernanke, you're our only hope.

Fyi:  You need to watch this video:

November 2nd Midterm Elections

On the eve of the November midterms I feel inclined to make a few comments and predictions. First of all, as a movement, I believe that the Tea Party will be merely a blip on the American radar. History will call it for what it was, a fringe movement supported by hypocrites and co-opted almost immediately by cynical Republican operatives. The same ones who cynically co-opted the Christian Coalition, the Moral Majority, Goldwaterism, and the John Birch society, funded by people whose views are rooted first and foremost in aristocratic elitism and monetary interest in only their own wealth.

Let’s get that straight. Not in the wealth of others, or in the strength of the economy as a whole—just. for. themselves. Why? Because they are only interested in perpetuating their own power, and who can blame them? Recessions are gold to the railroad tycoons. Their assets may lose value, but they’re not interested in money, so much as they’re interested in wealth. And wealth is as much or more, about power and privilege, than dolla dolla bills yo. And when everyone else’s assets crumple to zero, they’ll still be standing with absolutely no competition. They can refinance their corporations, shelter their revenues from taxes, and buy out the crumbling competition with little risk to themselves. They are the owners of the commodities, and hey, people gotta eat.

The only ones who can stand up to power like that is the government. Which has always been the reason to support a strong federal government. By using the lever of government spending, the federal government can upset the power of the oligarchs and reshuffle the economic spectrum. The rich will stay rich, and the poor will stay poor, but their will be new rich, younger rich, that are nearer to their middle class roots. New rich with new ideas.

This is what happened in America. It’s why America was dubbed a “post-racial” society after Obama’s election. The wealth of the industrial north was built on the backs of newer tycoons, people whose livelihoods weren’t dependent on slave labor, and the inherent racism necessary for slave labor to exist. And now, with gay marriage just on the horizon, the investment bankers, and “New Yawk” lawyers, might still call each other “gay,” and deride all those “trannies” who come out for Pride day, but they’re young, and not actually opposed to gay rights. They’re insecure and immature, but not inherently racist or homophobic. How could they be, they were born in an age where young pioneers were setting up gay rights clubs in their own high schools across the nation.

But to the Old Guard, this is anathema. Economic reshuffling brings change, and threatens to make them irrelevant—less powerful, not less wealthy. So new blood at the top is dangerous.

But before I go any further, this is not the year for Democrats and liberals everywhere to be complacent. Despite our unhappiness with the present climate, the capitulation by our own President on human rights issues like Guantanamo, or the List Project to Resettle Iraqi Allies, the lack of precise financial reform, or the public option for healthcare—it is important to realize that the right, Tea Party or Republican, is so thoroughly and completely an intellectually bankrupt movement that to allow them even one step further into the body politic is to risk everything. And in less than two years, the Democrats have achieved more than eight years of true blue Republican rule. So, go to the polls tomorrow, and vote Left.