Hogwash and “bobbleheads” …
To paraphrase C. S. Lewis, he once said that if a prejudiced person makes a statement often enough, it eventually becomes accepted as a fact. That’s how governments brainwash their nation’s sheep. Mr. Bernanke is well aware of this, and sheep, he knows, never seem to wise up. He has everyone swallowing his line about December 2007 being the beginning of the recession – including economists, CEOs, the entire maritime industry, and just about everyone in the media. And so the whole country accepts that date as the beginning of our economic tailspin. But it’s all spinnage.
Mr. Bernanke is relying upon the short memories of Americans – of some Americans, but not all. We have it in our files that Mr. Bernanke admitted early in 2006 that the recession was already in full swing back then. So why isn’t he talking about the job losses in 2003, 2004, 2005, 2006 and in the early months of 2007? Why is he now pretending that things were rosy in those prior years?
His specious comments and the Labor Department’s fudged figures are meant to mollify the millions of jobless who see no end to these desperate times. And as for that “December 2007” hogwash, well, that’s what it is – hogwash. Here’s what we found in our files:
1. “Left behind by the great Republican raid on the national Treasury are folks like Karelia Escobar and Joe Bergman, middle-aged New Yorkers who have worked most of their lives but now find themselves traveling the anxious paths of the long-term unemployed …
“That plaintive comment is echoing from coast too coast. Unemployment is rising. And as the millions of jobless Americans (including many in the middle class) exhaust their benefits and run through their savings, they find themselves face to face with the horror of destitution.”
– (Bob Herbert, The NY Times, January 9, 2003)
2. “In Chicago there are nearly 100,000 young people, ages 16 to 24, who are out of work, out of school and all but out of hope. In New York City there are more than 200,000. Nationwide, according to a new study by a team from Northeastern University in Boston, the figure is a staggering 5.5 million and growing.
“This army of undereducated, jobless young people, disconnected in most instances from society’s mainstream, is restless and unhappy, and poses a severe long-term threat to the nation’s well-being on many fronts.” – (Bob Herbert, The NY Times, February 6, 2003)
3. “Either the president doesn’t get it, or he is deliberately ignoring the hard times that have enveloped Americans on his watch.
“‘For the sake of job growth,’ said Mr. Bush, to the loud applause of the Congressional bobbleheads at his State of the Union address, ‘the tax cuts you passed should be made permanent.’
“Job growth? That’s the weirdest thing Mr. Bush has said since he told a CNN discussion group, ‘As governor of Texas, I have set high standards for our public schools, and I have met those standards.’
“Nearly 2.5 million jobs have been lost since Mr. Bush became president, and the most recent employment statistics have made a mockery of the claim that tax cuts for the rich would be the engine of job growth for the middle and working classes.” – (Bob Herbert, The NY Times, January 23, 2004)
4. “The big news heading into the weekend was almost guaranteed to be the awful jobs report released by the Labor Department Friday morning …
“The Labor Department report was as grim as faces on a bread line … A number of demographic groups are getting absolutely hammered. A new study by Andrew Sum, director of the Center for Labor Market Studies at Northeastern University, found historic lows in the reported labor force participation of 16-to 19-year-olds. According to the study, ‘The estimated 36.8 percent employment rate for the nation’s teens was the lowest ever recorded since 1948.’
“A more ominous finding was that over the past three calendar years the number of people aged 16 to 24 who are both out of work and out of school increased from 4.8 million to 5.6 million, with males accounting for the bulk of the increase …
“Among those having a particularly hard time finding work, according to the report, are job seekers with college degrees and people 45 and older …
“The nation is in an employment crisis and the end is not in sight. The Bush administration has no plan, other than a continued reliance on additional tax cuts .” – (Bob Herbert, The NY Times, March 8, 2004)
Admittedly, Mr. Herbert is our favorite writer, but he’s “a voice crying in the wilderness”. In one of his recent articles – on July 12th of this year – he noted that the “hustlers and high rollers at Wall Street’s gaming tables are starting to feel lucky again …
“An article on the front page of The Times on Sunday noted that this turnaround ‘underscores the remarkable recovery of the biggest banks and brokerage firms since Washington rescued them in the fall of 2008, and follows the huge rebound in profits for members of the New York Stock Exchange, which totaled $ 61.4 billion in 2009, the most ever.’
“The hustlers and high rollers are always there to skim the cream, no matter what’s happening in the real world of American families. In a column that was published a few days before Christmas 2007, the very month that the recession began [according to Mr. Bernanke- Ed.] I wrote about the record-breaking seasonal bonuses being handed out on Wall Street: an obscene $ 38 billion, the highest total ever. The subprime mortgage debacle was already upon us and the economy was sinking like a stone, but the casino crowd was celebrating as never before.
“‘Even the Wall Streeters are high-fiving and ordering up record shipments of Champagne and caviar,’ I noted, ‘the American dream is on life support.’
“The fattest of the cats live in a perpetual heads-I-win, tails-you-lose environment. But if you step outside the Wall Street casino, you’ll notice that things aren’t going too well in the rest of the country. More than 14 million Americans are out of work, and nearly half of them have been jobless fro six months or longer. The unemployment rate for black Americans is 14.4 percent.
“School districts across the country are taking drastic steps to cope with collapsing budgets: firing personnel, increasing class sizes, cutting kindergarten and summer school programs and, in some cases, moving to a four-day school week. The Associated Press, in a demoralizing report, recently noted: ‘As the school budget crisis deepens, administrators across the nation have started to view school libraries as luxuries that can be axed rather than places where kids learn to love reading and do research.’
“What a country. We’ll do whatever it takes to make sure the bankers keep living the high life and swilling the Champagne while at the same time we’re taking books out of the hands of schoolchildren trying to get an education.
“I’m no friend of deficit hawks, but the staggering amounts of money we’ve been spending for the past several years have not benefitted the people most in need of help and have not laid the foundation for a more secure economy going forward. We’ve handed over unconscionable tax breaks to the very rich (you can see the Prada paraders high-stepping along Fifth Avenue in their million-dollar flip-flops) and countless billions to the private contractors brazenly feeding off the agony of the endless wars in Afghanistan and Iraq.
“What’s needed is the same sense of urgency about struggling families and putting people back to work as the Bush and Obama crowds showed when the banks were about to go bust. That sense of urgency is always missing when it’s ordinary people who are in trouble.
“Millions of Americans are stuck in an economic depression. Several million have either lost their homes to foreclosure during the recession or are in danger of losing them. The long-term unemployed are facing painful daily choices on such basic matters as whether to buy food or refill needed prescription medication or pay electric bills to keep lights on.
“Back in February, The Times Peter Goodman wrote about the new poor, ‘people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives – potentially for years to come.’
“There can be no real national recovery with so many millions of people in such deep economic distress. We can pretend that we’re locked in some kind of crisis of confidence, that if only people felt better about themselves and the economy then they’d start spending again. This is a variation of the ‘mental recession’ lunacy spouted by Phil Gramm, John McCain’s top economic advisor during the presidential campaign.
“People who are out of work and deeply in debt don’t have any money to spend. The only way to get real money back into their wallets and bank accounts (and thus back into the economy) is to get them back to work.
“With our help, the banks and Wall Street have done fine. Better than they had any right to expect. It’s the ordinary folks outside the casino, in the real world, who are still in desperate need of help. But in a society of, by and for the rich, that help will be a long time coming.” –
Then in his August 13th column, Bob Herbert made this astute observation: “In the early months of 2009, with job losses soaring past a half-million a month and the country desperate for bold, creative leadership, the president had an opportunity to rally the nation behind an enormous ‘rebuild America’ effort.
“Such an effort, properly conceived, would have put millions to work overhauling the nation’s infrastructure, rebuilding our ports and transportation facilities to 21st-century standards, establishing a Manhattan-Project-like quest for a brave new world of clean energy, and so on …
“The problem with the U.S. economy today, as it was during the Great Depression, is the absence of sufficient demand for goods and services. Consumers, struggling with sky-high unemployment and staggering debt loads, are tapped out. The economy cannot be made healthy again, and there is no chance of doing anything substantial about budget deficits, as long as so many millions of people are left with essentially no purchasing power. Jobs are the only answer.” –
Mr. Herbert is right again. Almost. Yes. Jobs are the only answer. And yes, there is no chance of doing anything “as long as so many people are left with essentially no purchasing power”.
And that “Manhattan Project-like” effort he suggests? … we proposed that move in our Vol. XV, Art. 40 commentary (Sept. 29, 2008). But “overhauling the nation’s infrastructure, rebuilding our ports and transportation facilities” would be like putting the carts before the horses – if you had the horses.
“The problem with the U.S. economy today, as it was during the Great Depression, is the absence of sufficient demand for goods and services,” Mr. Herbert correctly reminds us. So how do we get those goods into the hands of employed people with sufficient purchasing power?
Those above-mentioned “horses” we don’t have, can only exist in the form of our patented container ships, built exclusively in U.S. shipyards, owned by U.S. interests, and crewed by U.S. seamen. A 21st-century “Manhattan Project-like” Emergency Shipbuilding Program will create jobs for about 50 million Americans who will then have enough purchasing power to demand the transport of foreign-made goods to our ports on those ships built by well-paid shipbuilding Americans..
After that, “overhauling the nation’s infrastructure, rebuilding our ports and transportation facilities” will become the logical next step – a step that will require the creation of several million more jobs. And the sought-for “Multiplier Effect” will then be in full swing.
But Mr. Obama is the only one who can initiate shipbuilding – the way FDR did in the 1930s.