This diary is not about Obama. This diary is about waking up and saving our country before it is completely gone. There is no time for the endless, catty politics that we have devolved to in this sad country. We are bleeding from multiple wounds; we are in economic shock. We must staunch the losses - but not by amputating our hands and feet. We must stop the bleeding from the real economy into what I call the "WOT-PAC economy". An economy based upon:
War.....................$1,560 B/yr (DOD = $1,449B; WarOnDrugs = $50-70B; Prisons = $60B)
Outsourcing .......$...240 B/yr (under-estim.(cuz not cumulative) wage loss in US manufacturing)
Trickle-down .......$.....90 B/yr (Tax cuts for top 5%)
Privatization........ $..600 B/yr (30% rakeoff of $2T healthcare system)
Auto-mania..........$..245 B/yr ($100B highway construction; $145B oil@$40/bbl)
Casino-capitalism. $..375 B/yr of Bush ($3T of asset destruction in 2008-9)
TOTAL =...............$3,110B/yr --- almost twice this year's obscene Federal deficit.
See below the fold for a discussion of these (probably underestimated) numbers.
These six economic strategies have been draining the lifeblood out of middle class jobs and our democratic institutions for the last 30 years. The acronym for these suicidal policies is easy to remember because it reminds you of two of the drill sergeants of the GOP economic death march: the "War On Terror" and the "Political Action Committee".
All of the sudden we woke up to find that the WOT-PAC economy had "gone broke for the profit of the CEOs", leaving the U.S. bankrupt. What a surprise! "No one could possibly have forseen that." - copyright of the Bush Gang. Unfortunately, a discussion of the media-induced delusion that led us to suicidal behavior must wait for a different diary. We must stay "on message" here.
A sane government would look at this disaster site and start to clean up the wreckage of the WOT-PAC economy. They would do that by changing rules that promoted WOT-PAC, prosecuting WOT-PAC criminals for "clawbacks", and cutting funding to WOT-PAC schemes for transferring money from the working people to the financial elites. This would be a refreshing change from dragging out "the usual suspects" of the anti-social right: Social Security, union wages, government employees, and illegal immigrants.)
The question for that sane government to ponder is: how much money could we save for the real economy by downsizing WOT-PAC as fast as possible without causing too massive a dislocation? In order to answer that question, we need some rough numbers. I have done a minimal google ( 5 mins per topic) to try to get ballpark numbers, which were summarized above the fold.
Clearly, if we only eliminated half of the WOT-PAC waste, the Federal budget would balance. We really have to get the political discussion in the media onto the systemic failure of WOT-PAC policies. We can't let the "death of a thousand cuts" media strategy of the GOP (helicopters, sodding the Washington Mall, Burris's doings, Obama's birth certificate) dominate the news cycle. We need to inflict our cuts on WOT-PAC. We need to make them answer for each and every robbery, failure, cruelty, and death they have enabled and profited from.
The way to do that is to offer a REAL alternative budget, not some polite trimming around the edges of the burning corpse of WOT-PAC economy. There is no way to restart or re-inflate that wreckage, and we will only waste our dwindling resources trying. We need our own budget, which ASSUMES that laissez faire and militarism (i.e., WOT-PAC) have failed and acts accordingly. We need to control not only the message, but the assumptions and the frame behind the message. Calling George Lakoff!
Down with the WOT-PAC!
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Way below the fold
Detailed discussion of the six suicidal strategies of the WOT-PAC
Wars
The U.S. defense budget is larger than all the rest of the world's expenditures combined. And, it does not currently include the budget for nuclear weapons research (hidden in the Energy Dept's budget). Not surprisingly, the 2001 "disclosure" by Donald Rumsfeld that some $3 Trillion dollars of pentagon spending was "unaccounted for" managed to get shoved under the carpet; as did the doling out of some $9 Billion of cash from the back of an airplane in Baghdad; as did the corruption in the $100 Billion rebuilding effort in Iraq or the "police training" that was always announcing it had graduated another 20,000 officers. The U.S. military-industrial-complex is the most corrupt entity on the planet. It needs an industrial-strength financial investigation, which is unlikely to happen.
But, we can stop the bleeding, both human and financial, in the farcical "Global War on Some Terrorists". We could instantly save $100B / year by getting out of Iraq and Afghanistan - wars which we illegally started. These wars are at the ends of tortuous supply routes and do more to enrich Halliburton than to stop terrorism. We also need to finally kill the worthless Star Wars missile defense program and some other gold-plated boondoggles designed to fight non-existent enemies.
Another $100 B chunk of change is spent on the para-militarized "war on some dealers' drugs". That war generates a huge prison population, increasingly privatized, increasingly abused. Since 1980, we have spent more on new prisons than on new schools.
Can we finally say that "nothing but punishment" is a failed strategy? Last week, three former presidents of Latin American countries announced that they think it is. More Mexicans were killed by drug gangs last year than U.S. servicemen were killed in Iraq. This strategy is the epitome of insane - doing the same thing over and hoping for a different result.
There is some hope. Various states have legalized medical marijuana; and California has actually introduced a bill to legalize and tax marijuana. Industrial hemp cultivation could be a major boost to our economy. Desperation, similar to the Great Depression repeal of Alcohol Prohibition, could finally restore a crop upon which produced the paper on which the Constitution was written and the rope which outfitted our sailing ships. Again in California, Federal judges decided that 30% of the state's prisoners must be released from "cruel and unusual" conditions of overcrowding. Maybe the Prison-Industrial Complex is finally going to get a good investigation.
Outsourcing
How can we pound a stake into the heart of "laissez faire" ideology? It has failed again and again. For the second time in a century it has provoked a global depression. The facts are against it; and the theory is against it, too.
In "Bad Samaritans", Ha-Joon Chang, a Korean economist, cites the history of massive British and U.S. protectionism and of their using trade agreements to ram open undeveloped markets. He also demolishes Riccardian free trade by pointing out the absolute unreality of "perfect factor mobility" - i.e., that 'capital and labor released by one activity can immediately and without cost be absorbed by other activities". You can't instantly and without cost repurpose a steel mill to be a semi-conductor factory or a steel worker to be a computer engineer. It is all a humbug to support the "race to the bottom".
But, hey, Wall St. workers, if you believe your own theories, you shouldn't be whining. Your theories say you should find a comparable or better job due to the "creative destruction" of free trade. Yeah, right.
Unfortunately, the failure of laissez faire is being used to re-impose it. The loan-sharking, government-busting IMF is back in the loan business. This time it is knee-capping the emerging economies of Eastern Europe, Ireland, Iceland, and all the other suckers who jumped on the globalization "gravy train".
We have to kill the WTO and create non-predatory international lending agencies instead of fronts for corporate imposition of second-class economies on helpless victims. We need to end "structural adjustment programs", which are a horrible precedent for economic interference in anything that has a money component. It is "made at the University of Chicago" legal over-reach.
Trickle-down
We need to stop the trickling down and start the locking up. The criminal incompetence of the SEC is no accident. It is the result of the total co-optation of government by business. It is not clear who made more money out of the Bush Administration - the oil companies, the Wall St. buccaneers, or the military contractors. But one thing they all have in common is that they, dissatisfied with the sweetheart deals they already had, they broke even those lax laws.
Government was co-opted because government was bought. And, it was bought because of the need to buy media time. And it became necessary to do that when the SCOTUS ruled in 1976 that "money was speech". We desperately need campaign reform. We need publicly funded elections, honest voting machines, and a major reworking of the laws governing lobbying by former members of government.
In spite of the constant cutting of the top-bracket and capital gains tax rates, off-shore tax havens has grown to massive proportions. They are used by corporations and super-rich people to dodge taxes. We are finally seeing a breakthrough there with the UBS case. Please, dog, let Phil Gramm be brought up on charges. Please!
We must raise the tax rates on the rich and corporations. There is plenty of historical evidence to show that we had our best days under more sensible tax rates. There is a story about how higher business taxes compelled business to reinvest; and that cutting taxes also cut investment and led to the speculative bubbles of the Casino Economy (more on that below).
Privatization
Before the economy cratered, the most important topic for citizens and businesses was the hopelessly broken state of our private healthcare system. It is cited as a drag on corporate competitiveness, a national embarrassment vis-a-vis other civilized countries, a moral disgrace that leaves 20% of the population not covered, and a middleman scheme that enriches administrators who "add value" by denying coverage to patients and fair pay to doctors.
We have yet to even "pass go" on reforming this. While it is good that Tom Daschle (D-HMO) was too much for even Obama to swallow, the whole reform issue hasn't even had a moments airing. On the good side, Obama has already disbursed money for Medicaid and COBRA. But, these are emergency measures, not reforms.
Next up on the de-privatization list are the former "masters of the universe" - the investment bank and ratings agency crooks who stole half of everyone's money. Another example of how privatizing critical infrastructure is a recipe for corruption and extortion.
There are many more examples of functions that need to be de-privatized. Prisons come to mind, with the recent case of the Pennsylvania judges who sentenced people on trumped-up charges in return for kickbacks from private prisons. We need to get rid of totally corrupt military contractors like Haliburton, who put our soldiers lives and their private contractors lives in danger for a quick profit on shoddy or non-existent deliverables.
The whole privatization mantra must be revisited in the light of the total disgrace of laissez-faire economics.
Auto-mania
Even if all our economic problems were to vanish tomorrow, we would still be in deep trouble. The issues of Peak Oil and Climate Change are gigantic, non-human, and totally unavoidable. Meanwhile, America is stuck with the wrong transportation infrastructure, which has led to the mis-design and misplacement of our buildings and the destruction of our communities - all to serve the god of instant mobility.
One of the best ways to simultaneously stop deficits and create jobs is to invest in alternative energy and transportation. Steel wheel on steel rail railroads have much lower losses to friction than truck tires. Electric locomotives don't waste fuel carrying around their fuel; they are 20 times as fuel efficient as trucks. As an added plus, Great Plains windpower could provide electricity to that section of the transcontinental freight railroads immediately - without the need to build-out a smart grid. Not to mention that the electricity equivalent of a gallon of gas would cost less than $1 at current electricity rates - to say nothing of future alternative energy schemes.
Taking freight trucks off highways would greatly reduce the maintenance cost, because overloaded trucks do 90% of the damage to roads. Even with our suburban sprawl, most people could use battery power for the majority if not the entirety of their commutes. Today, we import 10 million barrels per day of oil. The "Set America Free" initiative estimates that we would need 80% less if we converted to electric vehicles.
Moving to electric vehicles (trains, cars) and alternative energy is a three-fer - it saves money, creates onshore jobs, and saves the environment. Why is it not the number one component of the stimulus? Can you say WOT-PAC?
The Casino Economy & Its Crooks
Last, but certainly not least, we have the gang of crooks who have turned the boring old field of investment into an international racket.
Of course, we need criminal prosecution of these criminal masterminds. To do that, we need to make government officials more afraid of us than they are beholden to slimeballs like Bernie Madoff and Allen Stanford. That means we have to go after lobbyist culture, and that means political reform.
Before then, though, it will become necessary to nationaize the former investment banks along with AIG. That should put a big dent in the financial industry's lobbying budget. Everyone realizes that if we fail to restore credibility to our banking system, the economy will never restart in any form.
That restoration can start by prosecuting the SEC officials who let all this happen. If we do that correctly, those officials will roll over onto the Bush thugs who put the fix in for their cronies. A good prosecutor would have Dick Cheney, Phil Gramm, and Tom DeLay breaking rocks for the rest of their short and miserable lives.
America needs a financial system that they can trust, not a Ponzi Scheme run for insiders. If the Casino Economy doesn't fold up its tent, the mob is going to burn it down.