Posted by: jmtoriel | March 20, 2009

The Age of Stupidity — The Convenient Omission

“Throughout our history, the deal was we left the world in a slightly better place than we found it. That was progress. The wheel, the rule of law, penicillin. It was our covenant with our children and grandchildren.” – The Archivist from the Age of Stupid (new film on Climate Change)

Glenn Beck is stupid. There, I said it. Nothing against him as a fellow human being, but his baseless opinions and lack of scientific and journalistic integrity is astounding. Not that I watch his show, but my mother forwarded an email of a clip , called “inconvenient debt” that I would have otherwise only seen being made fun of on “The Daily Show” or the “Colbert Report”. He explains how his “truth” graph depicts an accurate way of printing money in the US while downplaying the legitimacy of Al Gore’s “Inconvenient Truth”. I have yet to see or hear any inkling of sense coming from this showman. He knows absolutely nothing about economics and is an outspoken denier of climate change. The fact that he has his own show speaks volumes of FOX news, the network and the lack of American journalistic integrity. Along with Rush Limbaugh, he is, in my opinion, dangerously influential without merit. This brings us to the “omission”.

Firstly, that carbon emissions are not derived from humans at this point is outright ludicrous and that the graph shown by Al Gore on reliable data from the Mauna Loa carbon monitoring science lab clearly showing a carbon increase in parts per million in the shape of a hockey stick (much like the debt curve). This shows that as our global population has increased and industrial expansion has increased, prosperity shows that we somehow further ourselves into debt while increasing our waste.

Secondly, wasteful and irresponsible spending habits at the federal level by heavily relying on public debt in times of prosperity (especially in times of unjustified and illegal wars and occupations like Vietnam and Iraq) while decreasing taxes from large corporations and wealthy individuals have meant less revenue to pay off interest and principle further spiraling the debt. This neo-liberal or conservative ideological view of cutting social and environmental programs while increasing massive spending to the military and cutting taxes to the wealthy to magically trickle down to the masses created this economic nightmare. So, blaming it on the Obama administration is– well,…stupid. Where are the revenues going to come from when the growth is intangible and backed by speculation in the free market?!

The other major omission is the historic implication that this has just recently occurred. The reference to Nixon scrapping the gold standard is very important. It was done at a time when the US War Machine was in financial jeopardy as the global economy took a downturn. In order to keep the debt spending feasible, he pulled the gold standard. Gold value shot up and now, in times of inflation, investors rush to gold which is considered more stable.  However, gold has lost much of its shine in value and our new standard has been replaced by oil since the 1970s. This also helps explain our dubious (and stupid) addiction to oil. Given the increasing expense of extracting this resource, and its immeasurable toxicity and burden to our health and welfare as well as security, it is stupid to assume that prices will NOT inflate further on the market given the crashing value of the US dollar. The more greenbacks printed, the more other global currencies will look attractive. Case in point: March 19th exchange rate saw a huge daily increase of the Canadian dollar to 2.7% largely due to the security of our “petro-dollar” and regulated bank stability.

In the (last) Great Depression, Roosevelt tried deficit spending, but he was too timid. When he stopped spending in 1937, the economy nose-dived. It took the humongous deficits of WWII to pull us out of the Great Depression. Those deficits blasted the economy from depression into overdrive. (See attached graph which tells the real story– notice how spending increases during Republican regimes bent on military spending during times of prosperity and growth). 

Who were the real spenders and who were the fixers?

Who were the real spenders and who were the fixers?

Of course after the war, the US had to pay off a huge national debt, but during that time, from 1946 to 1980, the economy was mainly quite prosperous. We hit a bad recession when Reagan took office, and his early deficit spending made sense (though he didn’t know it) largely due to the remnants of the Oil Crisis of the 1970s. Reagan, who often fell asleep during economics reviews (actual fact), continued to drive up the debt through the boom years that followed. That didn’t make any sense and Bush Sr. and Jr. followed in his footsteps (see graph). We are now headed into the worst slump since 1938, and we better hope Obama has the courage to take on the ideological critics like Beck, so he can fix it because the “dirty thirties” were indeed dirty. Unfortunately, as in the Great Depression, the extreme conservatives would rather trash the country than have our government succeed. The main thing to remember is that, with consumer spending going down, business is going to lay people off—not hire them. You can’t blame business for this. It’s just a vicious cycle the economy gets into. And you can’t blame consumers for not spending in bad times. The only way out of this, if we don’t want to wait 10 or 20 years, is for the government to spend, pay unemployment insurance, or give tax breaks to people who will spend (not the ultra wealthy who must be taxed).

Of course there’s also the problem of the banks. Before Bush left office, he threw money at the bankers and insurance companies. We see how well they are managing this. Again, by the graph, the hockey stick was created by Bush and only topped up by Obama. The main difference is that there were absolutely no stipulations when the money went to the big banks and insurance companies who were essentially being rewarded for their greed in gambling peoples’ mortgages on the free market. As interest rates are at all-time lows, monetary policy will not work by lowering them further. This leaves government spending to encourage consumption and investment back into the market (aka: Keynesian fiscal policy). Instead of blocking this path to salvation, the patriotic neo-cons will continue to whine and blame on FOX and MSNBC and get stuck on rants of blame for the government’s increased deficit spending saying how we should be more focussed on cutting taxes and regulations– further chipping away at the crippled public sector to magically  turn negative growth into positive territory (never has this happened). Meanwhile, the unemployment will continue to rise, ideological divisions will prevent the fiscal impetus to the public sector and infrastructure, climate change legislation will be neglected or stalled, more homes will be foreclosed and devalued and stocks will continue to slide. When we all decide we’ve hit bottom, the turn-around will certainly not be instant.

Until then, the anger and resentment of the post-boomers continue to hold their breath, stay healthy and look after their own while refocussing on hope — not fear. That is when stupidity is overtaken by intelligence. The sooner, the better!


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