The Wake

After the election, my good Democrat demographic-mates, who were out “Barackin’ it for Obama” and drank “Jag-Obamas” upon his victory, are flush with happiness, hope, and idealism. For a week, I myself almost felt that our troubles were behind us and the best was yet to come.

Cut to Dateline - Washington. When I heard today Secretary of the Treasury Henry Paulson say on the radio today that there is still a very real danger of “systemic failures in the economy,” the peak-oil survivalist mentality that occasionally grips me like a fever took hold. My god, I thought. It’s going to happen here. This man was just handed a bag of money and carte blanche by Congress. He has all the resources of the United States Government at his disposal, and he is still saying we might end up like Argentina, toppled overnight from affluence by an economic time bomb. It’s time to buy food and water reserves and a solar clock-radio and moving to a farm–.”

Eventually my rational mind regained control, and I applied myself to calmy examining the situation at hand: we are still uncomfortably close to entering a period of marked decline in America, economically, politically, and socially. It happened with Rome: they became too powerful, too corrupt, too big, too bloated, and they fell for their arrogance. While things on Pennsylvania Avenue are looking up, things on Wall Street continue to rapidly disappear down the shitter. The Secretary of the Treasury with his big bag of money was basically saying that we’re still on the brink, despite efforts. Paulson constantly stresses that we are in for the long haul.

But the “long haul” is not something business in America has been considering for the past 25 years. Since Reagan flew in on a magic carpet of trickle-down economics and deregulation, America has, except for a few slumps, prospered. Everyone was encouraged to maximize on short-term gain and spend themselves into debt, because this drove the economy. Businesses got more profitable, people got more shit to buy and eventually more “entertainment” to give them quick pleasure, and for a time, it was good. Eventually we began to stop using business to build actual “things” altogether. It seemed as if the wizards on Wall Street could make money appear out of thin air, and everybody benefited: there was an SUV in every driveway and a PS2 in every family room. The rising tide really did raise all boats. It just raised some boats more than others, and those at the top of the trickledown pyramid had more money than they knew what to do with.

The age of prosperity was here to stay, of course. We were in the “information age” now; the times of actually having to build things were over, left to countries with cheaper, less educated work forces.

This brings us to today. Surprise! There really is no free lunch. All those complicated formulas and “market tools” that assholes at the top of the trickledown pyramid have been using to make themselves
and their buddies rich have failed, and we are all fucked because of their irresponsibility. So I think it is time for us to declare pretty overwhelmingly that trickledown economics doesn’t work, and an unregulated economy based entirely on short-term profit doesn’t work, and the “information age” economy fallacy that we don’t actually need to MAKE anything doesn’t work, and we need to figure something else out.

And that’s something that we, as the people of a democratic nation whose government is, at least in principle, supposed to answer to us, need to think about, as well as our leaders. We are at a crossroads. It is time, as a group of people, as a country, and as a nation, to make plans for the way one of the most important aspects of our country, the economy, is going to function into the future. We need to look ahead.

That’s how we draw a silver lining out of all of this. We have a chance here to rebuild our economy, from the ground up, on more sound and sustainable business practices. First, we need to recognize that we can’t fix the economy from the top down. President-Elect Obama has made a deal to push for aid for the suffocating American auto industry in exchange for the Big 4’s promise that they will ramp up production and research on fuel efficient and green cars. Revitalizing the auto industry to produce high-tech but affordable green cars would create thousands of jobs in a sector that has been hard by the recssion. But, even under pressure from Senate Democrats and Mister Obama, President Bush and Secretary Paulson are refusing to use any of the 700 billion dollar bailout to help auto makers, preferring instead to hand the money to banks run by the people who put us in this mess, who are just stuffing it away instead of spending it constructively anyway.

Second. we need to find a way to encourage financial institutions, businesses, and banks to make stable, sustainable, mid to long term investments instead of obsessing over maximizing risky profits in the short term. We need to do this through careful, well-designed, and robust regulation, and by giving making sure institutions such as the SEC have the power and will to enforce such regulations.

Even if Obama can take us in that direction, he’s not in office yet. There are still people in power that believe that the market will correct itself and everything will be hunky-dory again if we just rescue firms headed by stupid rich executives from their bad decisions. But top-down economic policy put us IN this spot, so it’s certainly not going to get us out. To borrow from a popular buzz-phrase, it’s time for a change.

P.S. As a side note, I actually respect Henry Paulson quite a bit. While I disagree with some of his decisions, I think he is doing his best in a very tough situation. Plus he looks like the main character from Hitman.