Politicians explaining economics to the general populace is like having baseball stars explain theoretical physics for the masses (or, A-Rod, explaining the joys of natural foods to baseball fans). There is nothing simple or sound bite-sized, or easily understandable, about the complex tangle of interwoven threads that make up the current economic crisis – the fact that the world’s most gifted economists, people who have spent their life toiling in that vineyard, are having real trouble getting their collective arms around exactly what needs to be done to fix a painfully obviously, broken economic system, should tell us something about the presentation of economics issues for the average layperson by the average politician.
Most people are on the level of having trouble balancing their checkbooks. Indeed, dare I say in this era of on-line banking, most people don’t even balance their checkbooks anymore at all. We use calculators instead of all the fun math some of us stayed awake in class and listened to, back when, and we don’t even have to remember telephone numbers anymore because our snappy cell/PDA/smartphones remember hundreds of numbers so well that we are now totally divorced from that aspect of our memories. Is it any wonder, therefore, that, when faced with an implosion of our financial institutions and world economies, which some have compared to the Great Depression of the 30’s, that few, if any, can really follow the economics issued presented?
Gov Bobby Jindal of Louisiana, a charismatic, bright, rising star of the Republican Party, is about to make a huge mistake, which is a working lesson in this principle. Gov. Jindal has said he will turn down the Obama Stimulus Package Federal dollars aimed for Louisiana and actually give the money back. The Hannity’s and Limbaughs of the Talking Heads political world have gone to great lengths demonizing the Stimulus (and everybody who rode in on it), comparing it to Socialism and it’s inevitable boogeyman following close behind: Communism. Even Newsweek’s cover proclaims: “We’re all Socialists Now.”
This has directly led to the mistake that Jindal is about to make.
Let’s get real for a moment here. Anybody who has ever received Unemployment, or Social Security, or Veteran’s Benefits, or a whole host of other government-supplied money, has dipped a toe into the vast wading pool of Socialism, for what it’s worth. When banks fail and the FDIC (or S&L’s, and the FSLIC) takes them over – some 14 so far this still new year – we are witnessing Socialism in action right here in the good old US of A – it’s not something new at all. Let’s not all be quite so shocked about the fact that our brand of Capitalism has morphed light years past the unbridled, free-ranging form that allowed 19th Century Robber Barons and the Big Four to run America and California as their own fiefdoms for decades until the Populist movement of the early 20th Century came along – which we can thank for California’s Initiative Process, child labor laws, minimum wages, and the fact that unions even exist under Federal law protection (well, maybe not that last one). Without welfare, food stamps, disability benefits (both on the state and federal level), and many other such societal safety nets, we all would be stepping daily over thousands of bodies in the street everywhere we walk, like in Calcutta today – just in case you thought that our homeless numbers were large now.
When all other economic re-tooling mechanisms have been tried and failed and the Federal Funds Rate is effectively at zero; when banks, dead on their feet, like B of A, with a market cap of some $19 Billion, have already received a $45 Billion transfusion of your and my Federal Tax Dollars so far, the idea of providing economic Stimulus – the Fed injecting heaps of money into the economy – is the only arrow left in our quiver to fight this good fight. ‘Stimulus means spending,’ as the President bluntly said with some exasperation at a recent press conference, and we have to get used to that and learn to make that do the job which it is designed to do, or we have to get used to the fact that we are embarking on our own Lost Decade like Japan’s in the ‘90’s, and begin to hunker down for years of economic growth either at anemic levels or in negative numbers.
Making this complex knot of economic trouble into a political issue at this critical juncture is an instance of complete denial of the reality all around us – like living in one of those parallel universes that String Theorists now tell us must be out there somewhere, maybe curled up in a tiny ball. It is the kind of exploitation that we don’t need right now, even though I am sure that riding this media horse has generated huge TV and radio ratings and has endlessly entertained some who simply cannot get over having lost the November ’08 national elections – but, it is totally counter-productive when we should all be rowing in the same boat as the river continues to rise. The thousands who could have been employed in Louisiana and the thousands more who finally could have re-built their Katrina-destroyed homes and businesses with the Federal Stimulus money that Gov. Jindal is about to give back, will, in the end, be very sorry he did that. I predict that Gov. Jindal will be, too.