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November 2010, Week 1

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Left Margin

Yeah, It's the Economy, Sherlock

By Carl Bloice - Black Commentator Editorial Board
Black Commentator
November 5, 2010

http://www.blackcommentator.com/400/400_lm_economy_sherlock.php

The bloggers were right, "it was about the jobs, jobs,
jobs," Dave Johnson wrote on the Campaign for America's
Future webpage election day. "For the first half of the
year all the progressive bloggers were saying that the
November election is going to turn out very, very badly for
Democrats if they don't focus on jobs. We said please,
please drop this `austerity' nonsense, the only way to cut
the deficit is to grow the economy. We were going kind of
nuts about it, saying if you don't spend money on jobs the
voters will punish you."

"But the Administration and many in Congress were busy on an
`austerity' fad," continued Johnson. "The `centrists' and
the big-media pundits and the rest of the `serious people'
were saying we needed to do something about the deficits
because the markets' wanted them to. So here we are. The
bloggers were right...and the voters are punishing the
politicians who listened to the same old DC elite pundits
and campaign consultants and party insiders who demanded
`austerity' cutbacks for We, the People."

Of course, we shouldn't go overboard; the election wasn't
just about jobs. Note has been taken that foreign policy
got almost no play in the pre-election campaign. No one
seemed to want to talk about it. However, as anticipated,
the throngs of young voters who contributed decisively to
President Obama's election didn't turn out in sizable number
this time around; part of the reason is that they thought
they were voting to end the foreign wars and two years later
the bloodshed rages in Iraq and Afghanistan. There are a lot
of cynical 20 ad 30 somethings out there.

Turnout was a huge factor in the election outcome; large
numbers of young voters and minorities didn't show up at the
polls. While those that did stayed overwhelmingly in the
liberal Democratic camp, exit polls showed 41 percent of the
voters were conservative, up from 34 percent in the 2008. In
the Presidential election 18 percent of the voters were
under 29 years old; this time around it was 11 percent.
African-American participation fell from 13percent to 10
percent and Hispanics from 9 percent to 8 percent. On the
other hand, seniors went from 16 percent in 2008 to 23
percent in 2010. Ezra Klein observed in the Washington Post,
"seniors, of course, are the most conservative voters --
they were the only age group to back John McCain in 2008.
And young voters are the most liberal. They were the only
age group that favored Democrats yesterday."

And, anyone who thinks that racism, navatism, scapegoating
and immigrant bashing wasn't a factor in this election
should go outback and join the ostriches.

Still, Johnson's larger point in on time; the economy is on
nearly everybody's mind. Not just those unemployed or
feeling the precariousness of their jobs but also the
millions of people who have lost their homes during this
economic crisis and the millions more facing foreclosures in
the months ahead - and their friends and families.

According to CNN's Rebecca Sinderbrand, "The economy wasn't
just the most important issue to voters this year -- with
unemployment hovering around 9.6 percent, it was roughly
twice as important to them as the other top issues of
concern combined. Sixty-two percent of voters named the
economy as their most important issue this year. Health care
ranked a distant second, at 19 percent, with illegal
immigration and Afghanistan trailing at 8 and 7 percent."

Every time the White House speaks light is pointed to at the
end of the tunnel but there is very little reason to think
the end is near. Working people in Michigan Illinois,
Wisconsin, South Carolina, Minnesota, Ohio and Pennsylvania
are well aware of both the situation and the prognosis. They
know:

* Some new jobs are being created but not at nearly the pace
necessarily to move from the stubborn near 10 percent
unemployment rate.

* Since 2007 over 2 million building trades jobs have
disappeared; that's about one quarter of the total. In
September, the construction unemployment rate edged up to
17.2 percent. Almost nearly 1.5 million men and women are
looking for work in construction. According to Associated
Press economics writer Paul Wiseman, some experts don't
expect the labor market "to recover all the lost jobs until
at least 2013. Other economists say it could be 2018 or
longer."

* According to RealtyTrac, foreclosure filings - default
notices, scheduled auctions and bank repossessions - were
reported on 930,437 properties in the third quarter, a
nearly 4 percent increase from the previous quarter but a 1
percent decrease from the third quarter of 2009. One in
every 139 U.S. housing units received a foreclosure filing
during the quarter. Foreclosure filings were reported on
347,420 U.S. properties in September, an increase of nearly
3 percent from August and an increase of 1 percent from
September 2009. There were 102,134 bank repossessions
September - a record for a single month.

* Meanwhile, gasoline prices have risen over the past year,
education costs and healthcare insurance prices continue to
rise steeply. Gasoline costs more than it did a year ago.

There is a time to sow and a time to reap, a time to point
the finger of blame at whoever caused this mess and a time
to spell out what you intend to do about it. We reached the
latter point long before last Tuesday when the reaping took
place.

The problem is there was very little pre-election debate
about policy alternatives, no serious presentation of
contending plans and programs, just a lot of slogans and
personal attacks. Yes, the major media contribute greatly
to this (that's what they do these days), But the
politicians bear the major responsibility. Californian would
turn on the tele and there was there was the outsource queen
from Silicon Valley pledging to put the state back to work,
followed by Jerry Brown pledging to move power out of
Sacramento "down to the local level" without a clue as what
the catchy phrase meant.

A casualty of the campaign period, wrote Edward Luce in the
Financial Times as the campaigning wound down, "has been the
prospect of any serious debate about America's future - a
year when the country particularly needed to evaluate its
narrowing options."

Nobody "thought it worth raising Barack Obama's deficit
commission, which is due to report on December 1," observed
Luce. "The question of how the US should tackle its mounting
national debt has been relegated to a bunch of Punch and
Judy bumper stickers that bear as little relation to its
fiscal reality as astrology does to astronomy.

"The same applies to infrastructure, education, immigration
- pretty much anything that touches on America's future
competitiveness: `Literally clueless,'stands as an apt
summary on the hustings.

"Then there is the matter of whether Americans should be
fighting and dying in the `graveyard of empires'." Nothing
could better symbolize the disfunctonailty of 2010 U.S.
politics and the consequent undermining of democratic
decision making than the move the Federal Reserve made
Wednesday.

The nation needs new efforts to stimulate the economy if we
are to do anything about arresting the soaring unemployment
rate. However, for months now it has become a media litany
that enacting a new stimulus package is politically
impossible. Perhaps, but it would have been good to see the
Administration take a stab at getting one through Congress.
Even though the Democrats have a majority in both houses,
the brain-challenged "blue dogs" would have doomed it. With
the line-up in the new Congress, forget about it. Instead,
as policy-making we now have an unelected Ben Bernanke and
his cohorts at the unelected Federal Reserve making a
monumental economic decision that was never debated in the
election campaign period and about which few people in the
country know anything about. It goes by the name "QE2."
That's short for something called Quantitative Easing which
involves creating new money out of whole cloth ("electronic
money") and buying up a lot of $ 600 billion worth of
government bonds hoping to lower the cost of borrowing money
and boost consumer spending. It will, in effect, will lower
the value of the dollar and make things cost more, hoping to
lure the capitalists already sitting on pile of cash into
investing it in anticipation of potentially higher profits.
The hope is that it will get people and companies back into
the housing market and the stores and thus spur employment.
On Tuesday, the Financial Times editorially called the move
"an untried tactic that smacks of desperation."

 "It will mark the next stage of the Japanization of the US
 economy - the latest move by the Fed to stave off Japan-
 style deflation," wrote Edward Luce, the Financial Times'
 Washington correspondent, on election day. "Whether
 quantitative easing works will be central to America's
 economic future. No mention has been made of it on the
 campaign trail."

In the Guardian (UK) this week, economist Joseph Stiglitz
commented, "Political gridlock and soaring debt have stymied
an effective second stimulus, and monetary policy has not
reignited investment. But weakening the dollar to boost
exports is a risky strategy - it could result in exchange
rate volatility and protectionism; worse, it invites a
response from competitors. In this fragile global economic
environment, a currency war will make everybody a loser."
The reaction to the coming QE2 in the rest of the word is
one of alarm. The US is "again engaged in behavior that
risks putting global stability in jeopardy," wrote Stiglitz.
"President Obama has talked about a bold, large scale vision
for a new direction for the country, wrote David Johnson.
"But Congress and the President are getting trapped in
austerity budget thinking that won't allow them to go in the
direction of stimulus and helping regular people. If there
is to be no money because of an austerity budget then
American competitiveness, the economy and the mood of the
public can only get worse. Do the DC elites actually believe
the public is going to reward this with votes?

"People care about jobs. They still care about jobs. And
politicians who don't care about jobs will lose their jobs,
because that is what motivates voters." "In order to regain
the trust of the majority of voters, Democrats and the
president have to lay out a bold plan to get the economy
going and fight for it against those standing in the way,"
writes Robert Borosage , president of the Institute for
America's Future and co-director of the Campaign for
America's Future.. "Joining the Republican embrace of cuts
to Social Security and harsh budget austerity would be bad
policy and bad politics. "Joining with the right to raise
the retirement age, push through more job-killing trade
accords, or extend tax breaks for the wealthy will address
neither economic nor political challenges. It would be far
better to lay out what the country needs, stand firm against
the special interests and make the choices clear.

The election, AFL-CIO President Richard Trumka said
Wednesday "was about jobs, plain and simple. It was a
mandate to fix the economy and create jobs." It wasn't a
mandate for the policies most Republicans campaigned on, he
said. An election night survey of voters in 100 swing
congressional districts, Trumka said, "shows clearly that
the election wasn't an endorsement of tax cuts for the
wealthy - or for undermining Social Security or the minimum
wage. It wasn't a rejection of building a middle class
economy. And it wasn't an ideological purge - as many Blue
Dogs lost as progressives."

Trumka called for stepping up efforts to end corporate
outsourcing of U.S. jobs, strengthening Social Security and
Medicare, fighting to help jobless workers, asking multi-
millionaires to pay their fair share in taxes and investing
in a 21st infrastructure. "Any member of Congress who thinks
obstructionism is the way to win elections should know that
in two years we will be sure that voters will know who stood
in the way of jobs. We have an energized membership that's
ready to fight, and we're going to give it everything we
have," he said.

___________________________________________

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