Published In CommPRO,biz 2013.11.26

 

Ignoring the Obvious

We are five years into a worldwide recession. And while the United States is very sluggishly gaining ground, much of the rest of the world is sliding further into the abyss. Germany has parlayed a heavily subsidized manufacturing sector into the best of a bad lot. The rest of the Euro block is gasping for air. Yet many in Europe and in the United States seem determined to defy history in dealing with this downturn.

The only folks in America who are doing well are at the top; up and running on the no-strings-attached-taxpayer-funded bailouts. The stock market is soaring, the too-big-to-fail banks that triggered the recession, the super rich, big business, they’re all singing happy days are here again. Meanwhile, the middle class, small business, and the poor are left struggling. The solution, we are told, is austerity, a focus on our nation’s deficit. This plan from the folks who created the deficit with the first wars in our history that we made no effort to pay for as they were fought, and a tax cut.

The economic cancer we gave Europe has ravaged the continent. Especially those who have entered the job market in the five years since its onset. Youth in some European nations face 50% unemployment, and even those who are working are grotesquely underemployed. They are in a way a lost generation. Many who have advanced degrees, masters, even doctorates, are lucky to find menial work. Many are in their late twenties, some in their thirties; robbed of their future, their hopes for career and family lost.

History teaches a very different lesson. Every single economic downturn since the modern economic age dawned with the industrial revolution has been overcome by government intervention. Let’s look at recent history. America went into WW2 deep in debt. The debt had increased by the war’s end in spite of astronomical wartime taxes. Then we spent on the GI bill, educating returning veterans and subsidizing their home ownership. We rebuilt our former enemies’ homelands and hardly took a breath before the war in Korea. After he got us out of that war President Eisenhower went on a spending spree building our interstate highway system. At the time he made it out to be needed in case we had to move a lot of troops around in a hurry, but it was really a way to boost the economy. High end tax rates for the very rich soared to 90%. And America boomed.

In contrast we are allowing our roads and infrastructure to decay. Education is the last thing on our minds; we are forgoing the future, following a path of proven failure. Those few who are benefitting from this folly will find that it can’t go on forever, it is unsustainable. As our roads and bridges break down, as the economy decays, they too will find their positions in decline. They’ll discover – perhaps too late – that the ethically and morally wanting path they have chosen, is economically wanting for them as well.

The Price

The nearly unprecedented power a handful of monster banks wield over our lives raises a suite of ethical questions. “Nearly unprecedented” only because it mimics the power of the banking sector in America following World War I and through  the decade we refer to as the “Roaring Twenties.” We all know what happened at the end of that period, the Great Depression.

Interestingly, the monster banks of that day played a small role in triggering that horrific event. However, the people and their representatives in the Congress reacted more aggressively than those in that esteemed body have in response to an event almost exclusively the result of reckless behavior by today’s monster banks. Their power is two-fold: their control over members of Congress through massive injections of campaign cash, plus their ability to convince foolish voters that making rich folks richer will somehow benefit those down the food chain.

Add to this snake-oil logic the idea that instead of addressing the Great Recession as we have every other economic downturn since the industrial revolution, we are told that we need to cut investments in education, our crumbling infrastructure, firemen, police, and anything else that might maintain and improve our nation’s well-being. We are told austerity is the answer, a solution embraced by some in the Euro Zone and Great Britain.

Germany has taken the lead in imposing this path to prosperity on its neighbors. However, it’s not been so keen on austerity for Germany itself. The Scandinavian nations have not embraced austerity with enthusiasm either. Our neighbors to the north, Canada, have seen no need, since their banking laws saved them from the carnage our banks inflicted on Americans. By the way, our banks are fine; we bailed them out and guess what they are doing? The same stuff that crashed the world economy in 2007-2008. Why not? They know we will bail them out again.

How’s austerity working for the American people? They took the hit, no bailout for them. It’s been hard. Losing homes, jobs and dreams has been tough. Some folks can’t deal with it. Marriages come apart, and for some folks who just can’t go on, suicide seems the answer. The suicide rate in Europe has soared and it’s climbed in America as well.

As the recession ballooned from 2007 through 2010 experts* estimate suicides exceeded the norm by more than 4,750 across our land. The rate was a lot higher in states with the highest job losses. Unemployed folks are roughly twice as likely to die by their own hand as those who have work. Every one of these nearly 5,000 Americans who committed suicide was killed by the reckless bankers who tanked our economy. The bankers killed them as surely as if they had mowed them down against a wall; they were “Collateral Damage” in the bankers’ scramble for riches. The bankers gambled and everyone lost,,,,, except them. Some lost their lives.

*David Stuckler & Sanjay Basu, The Body Economic: Why Austerity Kills