“Here’s the dilemma: there is in the country a great deal of anger about the financial institutions, including those represented here,”
-Barney Frank, D. Massachusetts, Chairman of the House Financial Services Committee
“It is abundantly clear that we are here amidst broad public anger at our industry. Many people believe—and, in many cases, justifiably so—that Wall Street lost sight of its larger public obligations.”
-Lloyd C. Blankfein, chief of Goldman Sachs, douche
No shit, Sherlocks. This whole economic stimulus thing is getting me down. How about you? Does it somehow feel as if this money is going to the wrong places? Benefiting the wrong people?
Today in Washington a group of high powered bankers were grilled by Barney Frank (see also Good Morning News), and the rest of the House Financial Services Committee, on just what exactly they did with that $125 BILLION that was meant to free up credit for Americans.
Their answer? “No no, we tooootally freed up that credit! Seriously, Frankie! Problem solved! Whadd’ya mean ‘bonuses?’ I don’t even know what that word means. In fact, if you stripped me of my paycheck and my golden toilet AND made me work buck naked I would so still be working at (insert financial institution here). For reals.”
I call bullshit. But what else can we do? Will the new economic stimulus package do any better? Wall Street doesn’t seem to think so, but it’s likely they’re just freaked out that no-one from the Obama camp hasn’t promised them that a failing banking system wont be nationalized (even if temporarily).
I was watching the Daily Show last week and I was inspired by something good ‘ol John Stewart said during an interview with former National Economic Council director, Lawrence Lindsey. Check it:
I like this. I like this a lot. Hey, Washington! Who’s got ten fingers to write a blog post and would love to stimulate the economy? This guy! That’s right. I promise that if the government somehow put money back into my pocket (by cutting FICA, or what-have-you) I’d spend the shit out of that money, and I’d spend it locally.
But what about Social Security, you ask? Well, I read that Social Security report every time it comes to my door, and I can tell you that I am basically fucked when it comes to collecting government benefits when I retire. I’ll get jack with a bonus of squat. So it’s not like paying into Social Security at the rate I am currently required to is reaping any future benefits anyway. So maybe alongside my spending spree, I’ll squirrel a bit away for retirement.
I assume there are many people who have the same idea I do. Their money would go to restaurants, and small business owners, and corporations, who might then be able to expand and hire new employees or pay off outstanding debts. Hell, I’d even start paying off my student loans! I’m sure my creditor could sure use that money right now!
And I’ll tell you what. If I were given the opportunity to help stimulate the economy, I sure as hell wouldn’t be useing these ten fingers to hurl Molotov cocktails. That’s not necessarily a threat. I’m just thinking out loud here.
I’m hoping that the next several hundred Billion makes some kind of dent in this recession. Lord knows we need it to. But it’s getting harder and harder to stay positive. And isn’t that what we need right now? A little positivity?
How about you, Blogtownies? Got any amazing stimulus ideas?
Well I’m firstly amazed there’s a Merc writer that realizes the government is the worst manager of the economy possible.
So in that spirit, cut our taxes and we’ll invest it locally – throwing cocktails for everyone of course.
There’ll be bands too.
Really? You’ll invest the shit out of a refund locally? Is that what you did with the three hundred bucks they sent out last year? Or did it just go to pay off the back charges on your cell phone bill? Cause that’s where mine went. And it’s where everyone else I know spent theirs. And after the year most of us have had, and the back debt we’ve accumulated, it’s likely where most of a one-time infusion would end up going. Like, when you mentioned your student loans, which you would be paying to a bank that’s probably in Delaware.
People don’t splurge in a recession, because it’s unknown when and where more money will be coming from. Alan Greenspan actually used to lie about the economy because in a recession people save when they should be spending, and spend in boom times when they should be saving.
The idea that government shouldn’t take steps to manage the economy is exactly what got us here in the first place. The free market manages itself all right. But it does so mercilessly, with no regard for who it hurts or how.
The answer here is as it’s always been, two fold.
1. Cut stupid spending: The military is the most expensive, most maligned and most generally misused sector of public spending. End the war in Iraq, and cut the shit out of defense spending in general. That frees up a ton more more money, and eases the tax burden on everyone. Ditto for the booming private prison industry. We have the largest prison population per capita on planet Earth. For the cost of incarcerating one prisoner, we could pay two teachers. It’s always seemed ironic to me that the ones pushing the most for tax cuts are also the ones pushing the hardest for the largest outlays of capital.
2. Put money into public works projects. Our country is literally falling apart. By spending on projects rather than stimulus checks, not only does it provide a stable steady stream of income to people receiving it, which allows them to spend money on things like those local restaurants because they’re not worried about when and where their next check is coming from, but we get infrastructure that citizens and business can use for greater effect. And we get projects that are of the size and usefulness (bridges, power grids, etc…) that no one in the private sector is capable of building, especially in times of economic downturn.
Of course, this is hardly new stuff. It’s the heart of Keynesian economics, but what did he know. His theories only got us out of the Great Depression. Unlike George Bush’s tax-cut refunds and freemarket nincompoopery which we got for the last eight-years that helped solidify this mess.
But sure, send me a check. My multinational cell phone company will be happy. But I’ll just go right back to being in the red like the rest of you the next month, since even if they gave me back all of my tax dollars, it’s only a one-time deal, not a job with steady revenue to circulate in the economy.
I wanna know where the gold at! Give. Me. Da Gold!
Patrick – why are we both thinking about Molotov cocktails today? I’m at city hall, you’re in the office. What’s going on?
“Whether it’s because you’re missing a bike light or because you’re cruising on your Bianci lighting molotov cocktails with American flags, if a police officer says STOP, you’re legally obligated to stop.”
Badgoat – #2 is whats already happened on a national and state level.
Aside from the highly disproportionate level of funds going to union contracts for a few hundred jobs, gov’t cannot create wealth, and therefore cannot create labor other than ‘make work’ projects.
Punishing rich people (who own factories and businesses) by not lowering their high tax burdens doesn’t help either.
@ badgoat
All excellent points. But didn’t Keynesian economic theories, used to justify government over-stimulation, also put us into the inflationary period of the 80’s? I’m not saying that we should go back to Supply-side economics. I’m saying there must be some magical beast between tax cuts and government spending that could get money into the hands of consumers (hopefully without plunging them into more massive debt).
Americans love to consume. We’re fucking hooked on that shit! I spent my last stimulus check on art (it’s hanging on my wall). Then again, Kitty and I weren’t fearing for our jobs.
I don’t have an answer. I only have a layman’s inclination. Which is why I wanted to start this discussion. And it has started! Yay!
hugs/kisses
Oh, heaven forbid we punish the rich! Hey D, we don’t want to punish them. We want to eat them! With a side of fava beans and a fine Chianti!
(on saccatical, you cunts. please make Gorilla Monsoon and his ilk go away forever. huggles).
There’s nothing the matter with my elk, thank you!