There was a headline in “The New York Times” the other day that illustrates the kind of Catch 22 economy we’re in. “Rising Gas Prices Threaten to Slow a Recovery,” it said.
Bad news, right? We don’t want the economy to slow down any more than it’s already slowed.
On the other hand, we are basing our hopes for saving our collapsing car industry on a universal switch to cleaner cars that get better gas mileage. We also want to stimulate mass transit in our cities in order to get people out of cars entirely. (I won’t mention global warming because it drives a lot of people crazy.)
But to achieve those things, we have to have higher, not lower, gas and energy prices. People will not give up their big, honking cars and trucks in favor of matchboxes on wheels; even less will they walk to their corner bus stop, unless they can’t afford to do otherwise. On this I will stake my reputation as a soothsayer.
The sad truth is that we will continue to be at the mercy of oil producers so long as we are unwilling to go through the painful transition to a society that does not see the auto as a necessity for work, play, status and raising children. And the even sadder truth is that the pain of the transition to green transportation (widespread unemployment, a spike in the suicide rate, higher taxes, walking) may be more than the American people can bear.
The problem is so vexing that even a wise Latina woman would have trouble figuring it out. But that’s not the only problem facing Mr. Obama and Capitol Hill’s Gang That Couldn’t Talk Straight.
You may not have noticed but the economy fell off a cliff last fall. One minute prosperity was there beside us, laughing and talking, telling jokes; the next it was gone—disappeared.
When we looked over the side of the cliff we were walking on, there it was, tumbling toward the bottomless abyss, a fate so terrible that we only refer to it as “the D word.”
That was the situation Obama inherited when he took office and he did what he had to do. He began to pump vast sums into the economy, financing it by borrowing vast sums from the Treasury who in turn borrowed it from China, Japan, Middle Eastern potentates and other global loan sharks.
To do otherwise would have risked economic collapse and the most dreaded of economic calamities, deflation. (An economy in the throes of inflation is in trouble; an economy in the throes of deflation is dead.)
The last time I looked, the president’s plan seemed to be working. Prosperity has stopped tumbling and is now merely rolling slowly toward the abyss. We are hopeful—optimistic even—that it will soon stop rolling and begin the long climb back to us.
But, you cannot keep borrowing vast sums indefinitely. Eventually the economy reignites, wages and prices go up and inflation rears its ugly head. Not so bad as deflation, perhaps, but bad. The way to stop inflation is to raise interest rates and taxes, which risks sending the economy back into recession, putting people out of work, including politicians who voted to raise taxes.
The solution of these problems has not been made easier by the fact that the Republican Party has yet to lift a hand to help. Its alternative solution has been simply “spend less” (although it’s vague about the details and, in any case, is exactly the wrong thing to do).
The other day Rush Limbaugh, the leader of the Republican Party in all but name, expressed sympathy for a boycott of General Motors because it’s going to be partially owned by American taxpayers. Socialism, don’t you know. “Nobody wants to support an Obama company,” he said. “They don’t want to do anything to make Obama’s policies work.”
This country doesn’t need a third party; it needs a second one.
— from minutemanmedia.org