The mis-state of the nation

By Saul Landau

In the San Francisco Bay Area, California’s Central Valley, Los Angeles, New York City, Washington DC, Miami and other areas I’ve visited over the last year, I witnessed a dramatic increase in poverty.

Unemployment has increased while health and education budgets have received the blow of the ax – along with fire and police departments. Welfare? Forget it! I note the growing number of homeless people, and those waiting at freeway off-ramps holding “I’m hungry” signs.

As the military budget rises with no visible results in security, home ownership also drops. In July alone, 300,000 owners lost their residences because they didn’t make their mortgage payments. Maybe the term “owner” needs redefining?

The taxes governments at all levels collect do not correspond to basic needs. Politicians orate about the need for job creation, but Obama bailed out the pollution-producing auto industry that had shipped much of its labor-involved work abroad, so that Michigan remains in recession despite the publicized “Volt” given to its economy by GM. The old Middle West (Rust Belt) jobs have vanished.

The United States emerged from World War II possessing 55% of the world’s manufacturing. Sixty-five years later finance capital rules the economy. Expensively dressed thieves in posh offices play poker with other people’s money. In 2008, the “players” lost big hands, shut down their game and went home with a substantial stake. The public “got what was coming to us” for gambling – as if we’d had a choice!

We have thousands of nuclear weapons, but the only market for them consists of terrorists or rogue states. We sell other weapons, food and some software, but the nation’s wealth and its once unshakable credit have diminished. The mysterious trade deficit reported by news stations without explanation like the equally enigmatic Dow-Jones averages continue to flash pessimistic signals.

As the empire flails in unsuccessful efforts to control “strategic areas” abroad, its internal politics have devolved into “The Unreality Game.” Electoral rivals try to raise their opponents’ “negatives.” Instead of presenting their respective positions on issues, they engage in searches for scandals, anticipating the appetites of the tabloids’ headline writers and cable news.

Republican leaders receive large sums from monster size corporations and banks. In turn, these GOP puppets try to block all legislation that might hinder corporate profits or increase taxes — in the name of fighting “big government.” They did not embrace this cause when George W. Bush pissed away the surplus to launch two disastrous wars and drive the economy into deficit. But who remembers ancient history?

Democrats, for example, don’t trace Timothy Geithner’s trajectory to Kissinger Associates (three years) before graduating to the International Affairs division of the Treasury Department in 1988. Tim also served Robert Rubin and Lawrence Summers, his two mentors, as Treasury Under Secretary for International Affairs. In 2003-7, as president of the Federal Reserve Bank of New York and earning a good six-figure salary, he arranged the rescue of Bear Stearns and helped former Goldman Sachs CEO and then Treasury Secretary Henry Paulson to bail out AIG – rather than Lehman Brothers. That decision arguably helped drive the steep descent of global finance.

The Democratic Party sees no contradiction in representing Wall Street alongside Main Street. After all Democrats represent landlords and tenants, polluters and environmentalists, defense plants and peace activists, HMOs and patients. So, why not have a certified Wall Street rep as a top economic decision maker?

Such facts tend to obscure the good legislation passed during Obama’s almost two years in office. The media gleefully fills space with Sarah Palin’s attacks on liberals and the English language; nattering that upstages events that affect millions of people’s livelihoods. Pretty plus vapid slogans! Hey, she got almost 60 million votes. That fact denotes both a desperate and/or very foolish public furthered in its anxiety by a media driven by commercial urgencies that no Founding Father could have conceived.

The climate changes, heat scorches as never before, droughts spread, floods inundate, earthquakes, hurricanes and tsunamis threaten – but these events have had little impact on Congress, stuck in the constipated twists and turns that constitute the bowels of legislative politics: a one-sided war between stupid special interests and public need.

After much compromise, the liberal Democrats managed to squeeze out some form of health care or health insurance reform, helping millions of people as well as the HMOs. Congress also passed some good job-creation bills, especially in education, but a far cry from meeting needs in health or education. But the obstructionist Republicans and their right wing Democratic allies prevent progress. They mouth slogans like “No Big Government” while pouring trillions into the “defense” budget.

The voting public is angry and confused as the nation seems headed for Hell amidst triumphant cries from tone-deaf Republican pundits about how Bush’s surge led to victory in Iraq. November (election time) may become the cruelest month!

Saul Landau is an Institute for Policy Studies fellow.