Since I’ve posted two stories on Iraq in a row, I would also like to take this time to remind you that the aftermath of the past 10 years of reckless corporate welfare giveaways and rank corporate malfeasance by cronies of, among others, George W. Bush, continues to make for an extremely fragile economy, with low profits, surging oil prices (as a direct result of U.S. sabre-rattling), and dismal retail results.
The lowest US interest rates for 40 years have helped keep the American economy afloat, especially through strong consumer spending. But companies are still struggling to make profits in an environment of low prices while saddled with debt accumulated in the 1990s boom. Analysts thought companies would be over the worst by now, but the stream of profit warnings and credit downgrades shows no sign of drying up.
Well, it should be noted that the coexistence of "the lowest U.S. interest rates in 40 years" and accumulating debt is not merely a coincidence. When your central bank is giving away basically free money, and the legislature is stealing money from workers in order to write billions of dollars in corporate welfare checks, the amount of investment is artificially jacked up. That will jack up the economy temporarily, but eventually the chickens will come home to roost: artificially low interest rates means artificially high malinvestment – pouring cheap money into bad projects because the risk is artificially lowered. We are now living with the hangover of our central planners’ and corporate bureaucrats’ long investment binge in the 1990s.
The Bush apparatchiks, of course, have been trying to blame this all on Clinton. And certainly Clinton’s economic policies helped create the bubble economy and continued the long tradition of massive corporate welfare giveaways. Rush Limbaugh has gone so far as to claim that every single problem Bush faces – from international terrorism to the going-nowhere economy – is not, in fact, the result of any of his own numerous fuck-ups, collusions of interest, or back-room deals. Instead, it’s all messes that Clinton left for Bush to clean up. Why? Because Clinton was too distracted by the Monica Lewinski investigation! (In other news, Limbaugh announced that four legs good, two legs bad.)
Let’s get serious, folks. We have an administration in power that is dedicated to increasing command and control over the economy by central planning bureaucrats – in corporate boardrooms and in government offices. The economy has been weak for the entire Bush Presidency and it shows no signs of letting up. He’s had a year and a half now; by now, even the lagging indicators (such as unemployment levels) are reflecting decisions made under the Bush administration. The problem is that the Democratic leadership is too spineless and too cowed and too much in collusion with the same corporate interests to point out that Bush’s policies have been making things worse, not better. Once again, more proof that we desperately need a system that allows for vibrant third parties in America. We desperately need a lot of other things, too–like an end to corporate welfare and centralized command-and-control over the economy–but until we have some basic democracy reforms we are very unlikely to get any of that.