July 24, 2008
Whiners? Imaginary Recession?
Ron Ault
President
Metal Trades Department, AFL-CIO
If you have never personally experienced poverty, you really have no idea about what it is all about. Multi-millionaire former Texas Republican Senator Phil Gramm, who until a few days ago, served as the chief economic policy advisor to Republican Presidential candidate and fellow multi-millionaire John McCain, never experienced anything remotely akin to being poor. He never had to choose between eating or buying prescription drugs; or having to choose between paying the rent or the electric bill. Phil Gramm thinks our recession is imaginary and those hurting from it are “whiners”. Why? Because he doesn’t know anyone it affects. The super rich don’t associate with common people like us. They think we are going through a slight economic downturn…because that is the way it affects them.
All viewpoints are based on personal experience. The super rich just don’t get it…$4.00 per gallon gas doesn’t have any affect on multi-millionaires. They could afford $10 or $20 per gallon gasoline.
Someone once said that a recession is when your next-door neighbor loses his job. A depression is when you lose your job.
INDYMAC bank isn’t the only big bank failure this year, but it is the largest bank failure in 24 years. An additional 90 banks are on the feds’ “watch list”—and on the verge of failure. The nation’s two largest mortgage lenders—Freddie Mac and Fanny Mae—are in trouble and lawmakers are looking at a possible federal bailout. Hundreds of other well-known banks are on shaky footing. But, according to Phil Gramm and John McCain, we have nothing to worry about. They tell us that this is an imaginary recession. No conservative politician wants America to connect the dots and recognize that this very real recession is the product of their failed fiscal and economic policies.
Let’s connect some dots. The root cause of all the woes in banking and finance can be traced to bad investments, unsecured loans, corruption and fraud. Remember, the conservatives really took control of the federal government under Ronald Reagan and have never turned loose, even during Bill Clinton’s administration….Newt Gingrich’s “Contract for America” slogan-gimmick swept in a sea change of congressional conservatism. Their battle cry was “deregulation”—end government rules and regulations for all businesses…Break up all public utilities. Let the “market forces” dictate prices, supply and demand.
Competition is supposed to give the consumer more choice and lower prices…Remember those promises?
While conservatives were breaking up your telephone and electric public monopolies that had been heavily regulated, they also deregulated banks and “financial institutions.” These institutions were allowed to compete in each other’s business fields. Banks sold financial investments and financial investment firms sold traditional bank services. Just like the free trade agreements and the NAFTA big lie, none of the benefits the conservatives promised when they were selling America this bill of goods have ever come to pass.
Instead of strong government oversight of these giant investment/banking firms, government deregulation substituted a “trust me” honor system— relying on self reporting to federal regulators. Enron, WorldCom, INDYMAC and their peers were expected to disclose their financial problems. But, there is little honor among thieves, and without any teeth in the regulations, the honor system failed.
Deregulation has been a disaster! Airlines, phone, electricity, Wall Street, Banks, Health Care…name anything that was deregulated…it has been an absolute failure—absolute disaster!
Now, free traders, conservative politicians, the big Wall Street investors and their cronies are all in denial. They take no responsibility for the mess we are in. Why should they? They are the “old money,” privileged, super rich and recessions don’t affect them, their friends or families. It only affects us, the wage earners, and everyday average Americans.
What happens if America takes a dark view of all this bad economic news instead of believing the Phil Gramm/John McCain fairy tale?. Some 85% of all Americans say America is headed in the wrong direction…$725 million dollars a day spent in Iraq…A roller coaster ride of 129 point drop in the stock market in one day, after weeks of falling stocks…the big institutional investors hedging their bets in commodities, like gold and oil (at record prices per barrel)…U.S. foreign debt in the trillions. The numbers are so big that there is no way we can ever repay our debt. And now, major bank failures, and more on the way. That isn’t what I would call an imaginary “recession.”
This is serious business and needs serious discussion. Just this week Phil Gramm resigned so as not to be a “distraction” to Senator McCain’s campaign for obvious reasons. But the problem is not just Phil Gramm, it is McCain and the conservative political movement’s unwavering support for the so-called neo con agenda. That is where all the dots connect.
This recession is on us like a hair shirt. Do you have an emergency get away plan if it all goes to hell in a handbag tomorrow? Do you have two months living expenses in cash for an emergency getaway? Do you have somewhere to go to get away from the big cities? Have you thought about an emergency exit plan? Do you have personal protection for you and your family? If not, and you are concerned about the possibility of a collapse of our economy, you better start preparing now. You cannot ignore what happened in New Orleans immediately after Hurricane Katrina for a realistic example of what could happen in your city or town if the national economy collapses like it did in 1929-30. The Great Depression lasted until WWII. Many historians blame the world-wide depression for causing WWII.
When diesel fuel hits $5.00 (+) or so a gallon, America’s independent truckers will start to park their trucks, triggering shortages of all sorts of supplies, including food. Food shortages can be the catalyst for widespread panic, hoarding and social unrest that could overwhelm law enforcement like a tidal wave. In such circumstances, the rule of law would be instantly replaced with the law of survival. I would advise those concerned about the possibility of a collapse of our economy to quietly buy a supply of dry beans, canned goods, rice, powdered milk and flour; and I would (I did) plant a garden for food.
Metal Trades Department, AFL-CiO • 815 16th Street, NW •Washington, DC 20006
Phone: 202-508-3705 • Fax: 202-508-3706 • email: metaltradesweb@gmail.com
