Let's sum up the economic situation. Unemployment is high, and average Americans are in a desperate, fearful situation. Meanwhile, corporate profits are at record levels:
Profits have surged 62 percent from the start of 2009 to mid-2010, according to the Commerce Department. That is faster than any other year and a half in the Fabulous ’50s, the Go-Go ’60s or the booms under Presidents Ronald Reagan and Bill Clinton.Meanwhile, the most popular analysis of our economic troubles -- not just among furious, self-interested business tycoons but more moderate elements of the political elite as well -- holds that the primary problem is that the Obama administration is too hostile to business. It's quite remarkable.
Meanwhile, the Democrats have the worst of both worlds. A top-heavy economy is causing them massive grief among suffering voters, and the only people who are actually doing well are lambasting them as socialists.
I was reading the other day that American corporations are sitting on a trillion dollars of cash, yet they're not hiring and they're not investing in their businesses. Analysts expect they'll use much of that money for stock-buybacks, mostly because that will increase the value of stock options owned by management.
So the rich will continue to get richer, while the middle class struggles to hold its head above water. But the wealthy are furious that their taxes might increase to where they were ten years ago. No, they certainly weren't hurting back then, but they've made out like bandits from the Bush taxcuts - and the Bush deregulation - and now they believe they deserve it.
According to supply-siders in the GOP, tax cuts for the rich were supposed to create a booming economy and pay for themselves (kind of like the Iraq war). Neither turned out to be the case. Instead, flush with cash, the wealthy created bubbles in arcane financial instruments, and we ended up with record-breaking deficits and the worst economic collapse since the Great Depression. And now they want to try it again!
Not long ago, Wall Street was begging the government for bailouts, just to keep the whole financial system from melting down - and taking our economy with it. But now that their jobs are saved, now that the stock market is booming again, they're not interested in helping anyone else. Well, you see, they deserved the help. The rich always think they deserve special privileges, just like they deserve their wealth - even when they inherited it!
Weird, isn't it? What's even weirder is that most Americans go along with them. This is still a democracy, so the top 2% of Americans couldn't force this on us if we didn't let them. Of course, most of us don't have a clue about economics.
According to a recent Bloomberg poll, most Americans are surprisingly ignorant about this stuff:
The Obama administration cut taxes for middle-class Americans, expects to make a profit on the hundreds of billions of dollars spent to rescue Wall Street banks and has overseen an economy that has grown for the past five quarters.
Most voters don’t believe it.
A Bloomberg National Poll conducted Oct. 24-26 finds that by a two-to-one margin, likely voters in the Nov. 2 midterm elections think taxes have gone up, the economy has shrunk, and the billions lent to banks as part of the Troubled Asset Relief Program won’t be recovered.
Why are we so ill-informed? We believe just the opposite of reality by a two-to-one margin! That's just astonishing, don't you think? You can blame the Democrats for not communicating the truth more effectively, or you can blame the Republicans - including, of course, Fox "News" - for misrepresenting the truth to advance their own political ambitions. But fundamentally, this is our fault. After all, the truth has not been hidden from us, not at all.
So here's the deal: The stock market is booming and American businesses are flush with cash, but Barack Obama is accused of being hostile to business. The wealthy are doing great, thanks to effective government action that saved our economy from complete collapse, but they accuse Obama of being a socialist. 40% of Obama's stimulus package was middle-class tax cuts - cutting taxes to 95% of working families - but the overwhelming majority of Americans think he raised their taxes.
And Americans blame Obama for losing billions in the TARP program, even though (1) that was implemented before he became president and (2), rather than losing money, we'll make a profit on it. Obama's stimulus package, and the other emergency measures initiated when he did take office, stopped an economic collapse that appeared to have no bottom and turned our economy around. Admittedly, unemployment remains sky-high, but we're out of the recession, with the economy growing for the past five quarters. But few Americans actually believe that.
It's just incredible, don't you think? Why is Obama facing this kind of response? Is it just the fact that he's a Democrat? Is it the fact that he's a black Democrat? What's the explanation? And how can we have an effective democracy when the electorate is this ignorant and ill-informed?
Of course, a lot of people benefit by keeping the electorate ignorant and ill-informed. In fact, there are billions of dollars flowing into efforts to keep us this way.