• From Associated Press
• From the Chicago Tribune

"We were surprised. Why do this? There was no military, there were no soldiers in the hospital," said Dr Anmar Uday, who worked at the hospital.

"It was like a Hollywood film. They cried 'go, go, go', with guns and blanks without bullets, blanks and the sound of explosions. They made a show for the American attack on the hospital - action movies like Sylvester Stallone or Jackie Chan."

This Week's Clue: Forrest Gump Economics

(Note: I know I’m going to lose some Republican readers permanently with this one. I could care less.)

Stupid is as stupid does. (http://www.ozcraft.com/scifidu/fst_gump.html) This is the only description I can come up with of the American government's economic policy. (http://www.msnbc.com/news/906941.asp?0cv=CB10)

Government does impact the economy, no matter what its leaders say. A government's spending priorities, whether it balances its budget, and who or what it taxes all play a part in whether an economy will grow or suffer.

Since 2001 this government has treated the economy as a piggy bank for its friends, and economic growth as a zero-sum game (which it isn't). More damage has been done by this Bush in under 30 months than the first Bush did in 4 years. And Daddy Bush had by this time sewn the seeds of recovery, an agreement to freeze domestic spending in exchange for tax increases that, when extended by Bill Clinton, carried the economy to its greatest-ever boom. This one is just making things worse.

Between 1990 and 2000 America's share of the world's economic activity grew nearly 50%, from about 20% of the total to about 30%. This is why Bush Sr. needed a grand coalition in Gulf War I, while Bush Jr. needed no one to win Gulf War II. Economic dominance is the bedrock of American power, not military might. That dominance is slipping away.

Our technology industries are still flat on their back. For the first time in my 25-year journalism career, I'm making no money - none, zippo, nada - and it's not because I don't know what I'm doing. Everywhere I turn it's the same story. "No one is spending anything," as a PR man told me on the phone just now.

The 2001 tax cuts failed to stimulate. Cutting interest rates to 1.25% failed to stimulate anything but housing. (Without the housing boom there would be no growth at all.) There is no evidence that another round of tax cuts will stimulate anything more than more hoarding by the rich. The latest plan, to let the dollar fall, is just eating more seed corn. And actually raising taxes on foreign-based employees so their rich overseers can keep their tax breaks? (http://www.expatica.com/france.asp?pad=278,313,&item_id=31275) That's just insane.

We are rapidly approaching a point where the only way out of the current pain will be more pain. Even Banana Republicans must repay debts. As the dollar falls, so does demand for our debt. The price of that debt rises, interest rates rise, and any tax cut stimulus becomes water caught in your fingers.

Before we begin to turn the boat around we need to ask a more basic question. Should we have a progressive tax system? By lowering income taxes (paid by the rich) and raising sales taxes (paid by the poor), the Bush Administration has created a regressive tax system, transferring trillions to the idle heirs of the lucky few in its attempt to re-create the 19th century's English class system. (Why not cut to the chase and hand out titles - the publisher of "Black Enterprise" could really become the Duke of Earl (Graves). (http://www.cnn.com/SPECIALS/2002/black.history/stories/09.graves/)

This is an obscenity. Do rich people really get less benefit from safe streets, from good schools, and from a secure nation than poor people? It's their markets, their employee base, and their own persons the government is protecting. All government spending benefits the wealthy, every dime of it, because it builds the physical capital, human capital, and security needed for business to grow and flourish. The idea that the downtrodden should pay more for this than the wealthy few was rejected a century ago, in the time of our great grandparents. But that debate is back again, and progressives must win it if America is not to become the 21st century's Argentina.

Next, we need to return to the discipline of Bush I. That means capping total spending at current levels, and offsetting any increases anywhere with cuts. In exchange tax rates will have to be adjusted up in order to reduce annual deficits. Fiscal discipline is absolutely required before the dollar turns into the Brazilian Real (http://www.latin-focus.com/countries/brazil/braexchg.htm).

Next, get behind Moore's Law. We need to return to policies that embrace technological change. If we're to have tax breaks they should be reserved for high-tech products and systems that provide real economic bang for the public buck. We absolutely must launch the U.S. economy back up the value chain, letting lower value-add industries go overseas so we have markets in which to sell high-value exports. Real free trade demands that we allow foreign goods in, despite the pain suffered by domestic producers. The alternative is to watch countries like China leapfrog us – that’s what happened to Argentina.

This requires turning out more engineers and more scientists from among the American-born. If we took the money we now spend identifying, training and supporting athletes (who really provide nothing more than entertainment) and turned it toward scientists and engineers (who really do provide value), that would be a start. That means more honors for good engineers, more financial support for university engineering, and a lot more emphasis on science and math all the way down to kindergarten.

It could take a decade to undo the damage done to this economy by George W. Bush and his Banana Republicans. We need a true opposition dedicated to growth, an overwhelming victory in the next election (meaning a mandate) and a complete U-turn. We're like a boat in a toilet that's circling the drain and confusing movement with something positive.

Think it's bad now? You don't know bad. In the early 1930s, when most women were outside the labor force, U.S. unemployment peaked at around 32% -- one family in three had no income. There was no such thing as welfare, or Social Security. If we don't turn around that's the future your children face, I guarantee it.

Discuss Forrest Gump Economics
posted by jon lebkowsky on 2:26 PM
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The FCC: Damaging the Economy, Security and Democracy