Wednesday, January 09, 2008

S hits the F in 2009

I've just been reading a few posts by Stirling Newbury over at The Agonist
  • The Coming Double Dip Recession
    ... Unfortunately for the US, it has replaced a personally corrupt evil stupid congress run by Republicans, with merely a corrupt cowardly evil stupid by Republicans with Bush Dogs as cosigners. It is that they aren't personally corrupt. The catastrophic failure of Democratic leadership will be masked by the good conditions of 2008 for Democrats, but unless dramatically changed, will lead to their losing Congress right back in 2010, especially if there is a Democratic President being hammered for the recession.

    This means that instead of Americans taking paper losses on the houses and retirements, they are goint to wake up and find a bi-partisan consensus, meaning Republicans plus Bush Dogs, to shave more off their entitlements. The Republican way to do this may well be double taxation: a national sales tax means that people who paid income taxes earning money, will then have to pay sales taxes spending it. The Democratic way will be nibbling away at benefits and technocratic shell games, as "hedonic adjustments' were used to nibble away at Social Security.

    Neither party is stating the obvious, that the various sticky fingers of the financial system, which have deprived Americans of the benefits of lower costs, now add up to over 10% of GDP. Plus the prison-security-military-industrial complex, this comes closer to 20 cents of every dollar boiling away into projects that do not improve the fundamentals of the American economy, but shift money directly from those who work, to those whose job it is to delay the day of reckoning.

  • Dancing On a Volcano
    ...the present expansion, even if it were to continue, would not produce the burst of robust wage growth which would allow Americans to put their financial houses in order, nor for the country as a whole to do so. Now is the worst time to be spending money: prices are high, and the time to recoup those prices is short.

    The present continued inflation volatility, and increasing general level of prices, is an indicator of the extreme financial mismanagement of the economy by the Republicans, and a sign of how morally bankrupt, and simply economically blind, as well as politically inept, the present Democratic Congress is. The public hates this economy, it would be politically, a great time to simply oppose an out of control executive, and take the path of fiscal rectitude. Instead, the Republicans are starting to reclaim that mantle on the cheap by opposing a few projects here and there, while still dropping the GDP of Iraq into Iraq.

    Absent this sweet spot, the public is never going to see a recouping moment of wages, and when the recession hits, it will be deeper and wider than the previous recession. The bad news is that there is another, larger, recession coming after this one, as we continue to scale a new inflationary mountain.

    Think of this as the 1975 recession: bad, but only the opening act for the destabilization of a massive dollar glut.
It is fairly depressing reading, but well worth twenty minutes of your time. Go read, then think about the things we need to do to get Democrats to act - and vote - like Democrats.

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