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THE BIG NEWS OF THE DAY (OCTOBER 28, 2016)

October 29, 2016

THE BIG NEWS OF THE DAY (OCTOBER 28, 2016)

Today, October 28, 2016, the internet and newspapers are doing their level best to get our attention (and our eyes on their advertising) with two topics: (1) The FBI’s revisiting of the Hillary Clinton email fiasco, and (2) the Commerce Department’s announcement that our economy grew 2.9 % last quarter, the best in the last seven quarters. This essay goes beyond these headlines to suggest that neither of such pieces of information is all that significant once their background is known and weighed. I am not impressed with either of such pieces of sensationalism.

(1) The FBI’s announcement coming as it does in the midst of a presidential election provides fodder for Republicans to give the darkest interpretation imaginable to Hillary’s and her staff’s random email exchanges with an assistant in the ordinary course of business when (speaking of dark interpretations) it is their candidate for president who is chummy with the Russian dictator, Putin, who Trump calls “a strong leader,” and whose style he (Trump) might well wish to emulate if elected president. Let’s see now, a candidate for president of the United States admires a dictator’s “strong leadership” which, presumably means that he would like to be a “strong leader” too? Are we ready for immigration police and gestapo culture?

We have had “strong leaders” before, and within my lifetime. Hitler was a “strong leader,” indeed far too strong by any humane standard, so could a President Trump in emulating this mad man build gas chambers for Mexican immigrants after having them pay for “the wall?” Have we sunk to such a low that we could even think of another such string of atrocities for history to record? Let’s hope not.

Parenthetically, I note that Hillary’s assistant is the estranged wife of Anthony Weiner, a former Democratic congressman who was disgraced and effectively removed from office for bragging about his sexual apparatus. It seems strange by comparison that a sexual predator and similar braggart about his apparatus with (so far) eleven women who say he groped and kissed them without consent can still seek office given his record of predation and denial, three marriages etc. Where is the balance? If Weiner is disgraced for his relatively innocuous antisocial conduct, then why hasn’t Trump withdrawn from the race given his much larger involvement in such demeaning activities (e.g., I’m a star, so I can grab them by the ——-, and get away with it etc.). While both Weiner and Trump acted in disgusting fashion, I repeat, where’s the balance, especially when Weiner is not running for office and Trump is?

Hillary, to her credit, has demanded that the FBI quickly tell the American people what it is they have found with her emails and that of her staff sent and received to and from her aide, and says that after the FBI looks at such communications she is confident that the FBI director will not change his conclusion in July of this year to the effect that there was nothing there sufficient to hold anyone accountable. She is right, and although we and even the FBI director and Trump with his wild and unsubstantiated accusations that “this is worse than Watergate” do not yet know whether the new evidence will show that such communications with her aide were classified, copies of what the FBI already has, or what, if anything.

I am sorry to disappoint Trump, but my guess is that there will still be nothing there despite Republican attempts to politicize ordinary communications with her aide and I predict that this attempt to sensationalize such exchanges will backfire on Republican last ditch attempts to win the election by innuendo and insult rather than by a sober discussion of the real issues confronting the nation. I finally note that Trump is praising the FBI for coming forth with its announcement today, which is a far call from his condemnation of the FBI for being inept and corrupt and involved in “rigging” the election in recent weeks. When and if the FBI finds that the new electronic evidence is of no moment, you can be assured that the agency will be back on his list and subjected to his vengeful nature if he is elected.

(2) As to the 2.9% increase in economic growth for the third quarter, I am similarly unimpressed. Further investigation beyond the headlines in the business press show several one-time events ranging from a massive export of soy to South America to a replenishing of inventory by businesses (who had let their inventory go south because of tepid demand), and all with no increases in business capital investment, among other non-starters that would make our otherwise underperforming economy perform.

So far as I am concerned, these up and down measures of quarterly economic growth ranging from one to three percent are just treading water while we wait for real growth to show up in quarter after quarter, a sad and unnecessary near recession state primarily caused by Wall Street propaganda and Republican enthusiasm for austerity economics which our politicians have adopted as policy. I think we will not have the growth we can and should have until we rid ourselves or at least reduce the effects of wage inequality, our biggest domestic issue in my book, and why?

Economics 101 tells us that aggregate demand is the final arbiter of economic growth, but with all or virtually all of the income and wealth the economy produces going to a narrow sliver of the rich and corporate class rather than being fairly distributed to the rest of us as workers and consumers and other actors in this economy, the necessary level of demand is missing in action and economic growth languishes at just barely above official definition as a recession. It doesn’t have to be this way, and with a discarding of austerity policies that have been proven not to work and adoption of appropriate policies that do work (Keynesianism), we can, economically speaking, stop limping and start walking.

John Maynard Keynes pointed out long ago that under consumption in market-based economies would lead to all sorts of dislocation, and he was right. Unless there is strong demand in the marketplace for the goods and services the economy provides, the economy languishes, wages stagnate, employment rates are at risk, and all of us (other than the rich and corporate class) tread economic water, waiting for the next uptick in the business cycle while at the mercy of Wall Street and politicians who in their embrace of austerity economics are more interested in complaining about debt than fostering growth.

The obvious answer to our problem is to adopt policies which enhance demand and thus lay the ground work for growth, real growth like 5.0% or more quarter after quarter which (perhaps to the consternation of Wall Street and the politicians) would result in paying off the debt via growth rather than wallowing in austerity while debt accumulates and median wages (adjusted for inflation) stagnate and even periodically decline as all the while Wall Street continues to hog the economy’s income and wealth that all of us made possible but for which we are not fairly compensated.

We are in the fix we are in due to wage inequality (our number one domestic issue in my opinion) and our refusal to adopt Keynesian economics that work in favor of austerity economics that don’t work. Piketty and Stiglitz write that austerity economics won’t work in large economies. Is anybody listening?

So much for the headlines of the day. . . . .     GERALD       E

 

 

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