Why A Recession Could Be a Good Thing

Amanda Marcott has a great little post at Pandagon regarding the looming economic downturn. She makes a solid point that I had yet to consider:

I hear that our economy is on a downturn and the government is going to give us money to make it right. What I say is that the economy has been on a downturn, and it wasn’t until the very wealthy saw their extreme wealth threatened that we saw any action on it.

The irony is this: The fix for our problems is actually pretty simple. Capitalism per se is not the problem. In its place, it’s a good thing. But we need the basics to be made into public property—access to nutritious food, housing, health care, day care—and we need to get our capitalist system out of short-term thinking. We need to make it unreasonable and unprofitable to gamble on third world debt and the way it can be used to manipulate foreign currency. We need to make capitalism capitalistic again, i.e. return the risk to it, instead of offering huge government bailouts to save its failures. And we need high marginal tax rates to encourage capitalists to make long term investments instead of the short term investments that rule our culture.

While I disagree that Capitalism isn’t the problem (as someone in the comments at Pandagon pointed out, forcing working class and lower middle class people into subsistence living with no social safety net is a feature of Capitalism, not a bug) I do agree that the Economic Downturn* has been underway for a while and it’s only now that we’re hearing about it because it’s suddenly affecting the wealthy, who thought that their wildly inflated housing prices would somehow insulate them form the cruel realities of Alan Greenspan’s Invisible Hand job.

The economy took a “Downturn” round about the time President Kill Again decided we could pay for an open ended war with no clear goals and cut taxes for his wealthy friends at the same time. Spend trillions of dollars and bring in less revenue? What could possibly go wrong! We’ll just have Uncle Al molest the housing Market a little, no biggy. Sure you paid three times what that house is actually worth and now have to default on the loan payments because Congress rewrote the rules making bankruptcy a veritable prison sentence but shoot, if you were a real American, you’d be rich and this wouldn’t be an issue. Quit whining, you Commie!

Now of course the rich are being bitch slapped by the invisible Hand, so an Economic Stimulus Package** is required. It’s only Socialism if it helps the poor. It’s good business sense if it helps people who happen also to be on George W. Bush’s Christmas card list. We must bail out the rich people who can’t afford their solid gold toilets and might have to sell one of their Yachts (the small one, without the helipad) to make it through.

Or, here’s a better idea: let’s do nothing.

The middle class and poor are already screwed. We have been for years and have figured out a way to work around the gaping black hole that is our social safety net. It can only get better for us. But it’s time for the rich to learn how to live within our means. Maybe then they’ll be a little wiser when it comes to investing and won’t try and play a shell game with the stock market. Something needs to slap the rich upside the head. Otherwise, it’s going to be a reel short trip.

Because China isn’t always going to be there with a blank check and a friendly handshake forever. If we don’t wise up soon, our currency won’t be worth shit. Then China will say, “Um sorry, you guys have maxed out your credit limit.” Then they’ll show up to buy the Statue of Liberty as scrap mettle when we’re forced to sell off assets just to survive. So, time to send the pony back and start thinking smartly about ways to get out of this mess and create a stable social safety net so it won’t happen again.

That means Universal Helathcare, energy independence, pensions and daycare so workers can live and work. For the wealthy, that means you may have to sell the Hummer and go with the 30 inch plasma screen TV instead. It’ll be tough, I know but we all have to make sacrifices.

* Economic Downturn is a quaint little euphemism, don’t you think? Oh, we just turned down the wrong road! Silly us, better take the next left and try again! We’ll just ignore the burning wreckage of the fifty car pileup in the form of 40 Million Americans without health care, tax cuts for the rich and a giant fucking war that caused the Downturn.
** Economic Stimulus Package is another fun phrase. Basically, we’re going to throw money at the problem and hope it goes away. If that doesn’t work,we move on to tossing virgins into volcanoes. After that, things start to get desperate. But hay! Is that a 42 inch plasma screen TV in your living room? Sweet!

2 thoughts on “Why A Recession Could Be a Good Thing”

  1. Actually, capitalism is a wonderful system and we really should give it a proper trial. Unfortunately that means the end of corporations, because the sole purpose of a corporation is to limit risk, and risk is the regulator on capitalism.

    If corporations faced the risk of having to actually pay for the damages they cause, and I mean pay all of the costs and going beyond bankruptcy for the money from every stockholder of record, then they would probably be better about not causing damage. If the directors and management faced prison time like the owners of small businesses, they might behave themselves.

  2. Agreed. I’m not opposed to capitalism, per se, but it needs to be restrained by respect for the social contract, which as you say, Bryan, would put corporations right out of business. Which would be fine with me. String ’em all up!

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