By
Rudy Barnes, Jr.
In the wake of massive Republican
tax cuts that benefit the rich, coupled with a bipartisan budget that increases
defense spending and proposed investments in infrastructure that will vastly
increase the deficit, both political parties have abandoned fiscal restraint
and put America on a course that will likely produce dangerous deficits and increase
economic disparities.
The
stock market is where most money now migrates. Once a barometer of the U.S. economy, it has
become more a barometer of inflation than of the nation’s wealth. Without a gold standard to govern the value
of the dollar, stock has become the best measure of a dollar’s value. When the value of stock goes up, it creates
inflation that reduces the value of the dollar.
The
stock market is controlled by super-rich CEOs who represent Wall Street. They are accountable only to boards of
directors that demand maximum profits, so they are motivated by greed.
And in politics they use campaign
contributions to prevent the regulations needed to protect the public from
exploitation by the unrestrained greed of their mega-corporations.
The
stock market represents America’s productive capacity. Real estate is another part of America’s
wealth that is not controlled by Wall Street.
In the past, Americans invested more in savings accounts and real estate
than in the stock market, but the 401(k) plan reversed that priority. Wall Street now has a continuous supply of
money with no public accountability, and the resulting inflation of stock
values has given the illusion of increased wealth.
Both
stock and real estate lost half their value during the financial crisis of 2008. While the Federal Reserve subsidized corporations
that were too big to fail with cheap money, little was done to restore the
value of real estate. The stock market has
since recovered its losses and more than doubled its value, while real estate has
barely recovered its losses. As a result
stock has become America’s favorite investment, and that has given Wall Street
enormous power.
Rising
interest rates counter inflation, but since 2008 the Federal Reserve has kept
interest rates low to stimulate the economy.
Low interest rates have enriched Wall Street, while they have discouraged
traditional savings and only marginally helped the real estate market.
Wall
Street opposes higher interest rates since they mean lower stock prices and
profits. If the Federal Reserve capitulates
to Wall Street pressure to keep interest rates low, even as stock prices and
inflation rise, it will likely cause monetary and economic dysfunctions that increase
already dangerous disparities between the rich and the middle class, and lead
to an economic crisis that could threaten the very fabric of American democracy.
Tax
cuts and government spending supported by both radical-right Republicans and
leftist Democrats feed Wall Street and starve Main Street. Fiscal conservatives no longer have a voice
in politics. It is uncertain when the lack of fiscal restraint in
politics will undermine public trust in the U.S. dollar and cause an economic
crisis, but without major changes in economic and monetary policy, that economic
crisis is a virtual certainty.
Economic
stability and justice are moral priorities of the American civil religion, and they
are at risk from the greed of profiteers on Wall Street who are supported by a
president and a majority in Congress.
They were elected by white evangelical Christians, so that religion is part
of the problem and should also be part of the solution. That solution is to follow the greatest commandment to love God and
to love our neighbors—all of them—as we
love ourselves.
That
will require the president and congress to reclaim fiscal responsibility for America’s
economic destiny from the profiteers of Wall Street. Voters must hold their elected leaders accountable
for a strong national defense, a sound social security system, health care for
the young and old, and a safety net for the poor and powerless—all with limited
budget deficits. That cannot be done
with tax breaks for the rich and the deregulation of Wall Street’s power.
I’m
a maverick in politics, an independent fiscal conservative more libertarian
than socialist, and until recently I considered big government the greatest threat
to our freedom and democracy. Now I believe
big business is an even greater threat to our liberty, and that we need
government to protect the public from being exploited by the unrestrained greed
of Wall Street.
Notes:
The dismantling of the Consumer
Financial Protection Bureau by President Trump and Mick Mulvaney, who is the
acting head of the CFPB and, I’m sorry to say my former congressman, is an
example of how Trump and his Republican minions are protecting the profiteers
of Wall Street while leaving consumers unprotected from their unrestrained
greed. See https://www.washingtonpost.com/opinions/the-trump-administration-is-trying-to-undermine-the-cfpb-it-will-fail/2018/02/14/cab18f18-10d2-11e8-8ea1-c1d91fcec3fe_story.html?utm_term=.936873af0aee&wpisrc=nl_popns&wpmm=1.
The new two-year bipartisan
budget spearheaded by Republicans has abandoned any effort to eliminate the
deficit, and a Washington Post editorial says that the budget “denies
reality.” See
https://www.washingtonpost.com/news/business/wp/2018/02/11/in-big-reversal-new-trump-budget-will-give-up-on-longtime-republican-goal-of-eliminating-deficit/?undefined=&utm_term=.1eb5bf5398a9&wpisrc=nl_headlines&wpmm=1, and https://www.washingtonpost.com/news/business/wp/2018/02/11/in-big-reversal-new-trump-budget-will-give-up-on-longtime-republican-goal-of-eliminating-deficit/?undefined=&utm_term=.1eb5bf5398a9&wpisrc=nl_headlines&wpmm=1.
Robert Samuelson explains why the
budget lacks reality and is not prudent:
“The bipartisan budget agreement reached last week by congressional leaders is
nothing if not a huge evasion of responsibility. Neither party will make the
unpopular choices necessary to pay for an aging society and essential
government. Ever-larger budget deficits have become their means of making
policy and practicing politics. …Altogether,
we face cumulative deficits of about $14 trillion over the decade. These can’t
be blamed on an economy operating at less than full capacity. Just the
opposite: The economy is close to “full employment” with a 4.1 percent
unemployment rate. Deficit financing has become the mother’s milk of politics.
Compromise occurs by mutual forbearance. ‘Each party is giving the other its
wish list with all the bells and whistles included and asking future
generations to pick up the tab,’ notes the CRFB’s Maya MacGuineas. …Meanwhile,
so-called entitlement programs such as Social Security and Medicare — for which
people automatically qualify — were largely untouched. They represent about
70 percent of federal spending. Together, costly entitlements and expanded
discretionary spending produce enormous deficits, exceeding $1 trillion a year,
as far as the eye can see. That’s a huge gap — roughly 5 percent of our gross
domestic product — to close or shrink. Most politicians are can kickers. They
want nothing to do with the necessary tax increases or spending cuts, including
possible reductions in Social Security, to curb the out-of-control deficits. Republicans
congratulate themselves on new tax cuts; Democrats are always eager to increase
social spending — witness the Affordable Care Act. So why should we worry about
escalating debt? The answer, in a word: prudence. We don’t know how much
federal debt is too much. What we do know — from previous financial crises in
many countries and at many times — is that once investors, traders and
speculators lose confidence in a country’s debt, the economic, social and
political consequences can be devastating. Interest rates may soar; inflation
may surge; governments may raise taxes sharply and cut spending deeply. But
once you cross that line, it’s hard to get back to the other side. The prudent
thing to do is never to get close to the line. We aren’t being prudent.” See https://www.washingtonpost.com/opinions/the-one-word-reason-congresss-debt-deal-should-worry-us/2018/02/11/505dfc02-0dcf-11e8-8b0d-891602206fb7_story.html?utm_term=.8322a0bb0cfe&wpisrc=nl_opinions&wpmm=1.
On the evils of greed, Netflix’s new six-part documentary series is
an enthralling take on cons and corporate malfeasance, from money laundering
for cartels to the Trump Organization. See The Epic Grift of Greed at https://www.theatlantic.com/entertainment/archive/2018/01/dirty-money-review-netflix/551819.
Related
Commentary:
(1/11/15): The Greatest Commandment: A Common Word of Faith
(3/8/15): Wealth, Politics, Religion and Economic Justice
(8/9/15): Balancing Individual Rights with Collective Responsibilities
(10/18/15): God, Money and Politics
(1/30/16): The Politics of Loving Our Neighbors as Ourselves
(6/4/16): Christianity and Capitalism: Strange Bedfellows in Politics
(10/1/16): The Federal Reserve, Wall Street and Congress on Monetary Policy
(2/11/17): The Mega-Merger of Wall Street, Politics and Religion
(3/11/17): Accountability and the Stewardship of Democracy
(9/9/17): The Evolution of the American Civil Religion and Habits of the Heart
http://www.religionlegitimacyandpolitics.com/2017/09/the-evolution-of-american-civil.html.
(9/16/17): The American Civil Religion and the Danger of Riches
(12/16/17): Can Democracy Survive the Trump Era?
(1/20/18): Musings of a Maverick Methodist on Morality and Religion in Politics
(1/27/18): Musings on Conflicting Concepts of Christian Morality in Politics
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