We shouldn't let the immediate struggle over this stimulus package make us forget the wider and underlying problem with our economy. Yes, the opposition to the kind of stimulus that would save jobs is partly driven by an unholy combination of inertia and conservative dogmatism. But this opposition is also driven by service to the short-term and short-sighted interests of the "investor class", which these days includes way too many of us who should never even think of owning stocks, but whom criminally foolish govt programs have encouraged us to, in the form of 401ks, etc. The real struggle in the next few months will eventually clarify into the struggle between what is good for jobs and what serves "investments".
The damage we are now seeing is the inevitable result of decisions we as a society made a generation ago. We bought into this idea of everyman becoming an "investor". Contrary to the wisdom of all the ages since the invention of money up until our time, a wisdom gained in the failure of "investment" bubble after bubble, we bought the idea that this generation was going to see the dawn of a new era in which the laws of economics, common sense and common decency were all going to be repealed so that we could all become rich off of our money working for us. Govt programs were created to incentivize retirement plans and education plans for the masses based on stock ownership. We were all going to become little capitalists, retail capitalists.
Well, guess what? Capital doesn't work for you, it works for itself. It likes to gather itself into pyramids, drawn there by the high return on "investment" that is available in markets for things, like stocks and hedge funds and CDSs, that have no underlying value. The lack of a tether to any underlying value means that these nebulous assets are free to rise in price as more and more money, drawn by the ROI created by all that money pouring into the market, pours into the market. The process feeds on itself until no more new money is available to come into the market, at which point prices level off, at which point the ROI in that market begins to suck, at which point the smartest money starts to leave the market, at which point everyone else loses everything.
Too many people have bought into these markets, and are the proud owners of "assets" like stocks that are entirely fraudulent paper wealth, for us to just stand back and watch a bonfire of the vanities that is in its earliest stages, without doing everything possible, however vain, to save the edifice of lies. So we have a bailout plan geared entirely, and a stimulus plan geared largely, even before the centrists got to it, to reinflating every bubble in sight. It's not going to work. There isn't enough tea in China, or rather, enough money to lend us in China, to make it work. The junk "assets" are too leveraged. By report, we've got 70 trillion in CDSs written on home mortgages out there, but we've only got 6 trillion worth of home mortgages. We could sell everything real in this country, and still fall well short of enough money to keep the value of the fake assets up.
But we're not going to stop trying to reinflate every bubble, and make every "investor" whole, until the whole damn edifice of lies has collapsed so completely that the average member of the "investor class" has accepted that all that paper value is gone with the wind, beyond all hope of recall. The more we try to do while still having to pretend that all that Monopoly money, that you and you and you have tied up in your retirement or your kid's college fund, isn't already gone; the more that any stimulus or bailout we do will only feed the beast, and just stack the pyramids higher. Almost half of this stimulus package is tax cuts, mostly for people who will "invest" what they save in crap that just adds to the problem, or schemes like the $15K per house flip they're handing out to keep the gas in the housing bubble. Worse than useless.
No, I don't say that we should walk away from even this turkey of a stimulus package. It has a lot of needed govt spending, and a US economy restructured to work for us instead of Capital, is going to be moving in that direction. But this is about as good a deal as we are going to get before a lot more of the edifice has collapsed. The bulk of the spending stimulus ought to be part of the permanent restructuring of how our society spends what's left over after we pay for the consumption of necessities, and so should go into the regular budget process anyway. So we have whatever turkey of a package we can get through now to get some recovery going, then let the next budget contain the heavy lifting. Yes, that will be months from now. But maybe we'll have had a moment of national clarity by then, and be ready to do what needs to be done, rather than throw more money at trying to rescue what's already gone, and never really existed except on paper.