Wednesday, September 23, 2009

Did the U.S. Give Up On The American Worker?

Red China is doing a better job with Keynesian economics than the U.S. They goosed their deep recessionary economy with a boatload of money; voila! they're coming out of it. Not only that, the Chinese government demanded that the banks receiving bailout money lend to businesses and consumers. Ostensibly, that was one theory behind TARP (the act to reward plutocrats). But lending is declining. Banks are holding onto the money and raising fees on strapped businesses and consumers. Credit is still hard to come by, except, of course, for the "too big to fail" institutions sucking at the taxpayers' teat.

The N.Y. Times does a great job of describing the difference between U.S. plutocracy and Chinese communist capitalism in Recovery Picks Up In China As U.S. Still Ails

[When Chinese]...authorities urged bank executives to lend, the total value of loans outstanding shot up more in the first seven months of this year than in the previous 24 months.

By contrast, total loans and leases outstanding at financial institutions insured by the Federal Deposit Insurance Corporation actually fell $249 billion, or 3.2 percent, in the first half of this year.

Though Washington has used taxpayer money to bail out American banks, it does not have Beijing’s power to force banks to lend that money to businesses and consumers.

(By the way, aren't we major shareholders in all these financial institutions? Obama is a socialist all right...a corporate socialist.)

Meanwhile, here in the good ole U.S. of A., Ben Bernarke our intrepid Fed Chairman and little Timmy (bank baby) Geithner our Treasury Secretary declare that "we're officially out of the recession." That's because all our guys count are the banks. In the White House letter released to the G20 in advance of the conference in Pittsburgh this week (tip jar to Greg Palast of Huffington Post) it's clear that the only thing the administration cares about is that equity markets have increased 35% and other indicators favorable to the financial sector. Unemployment is only mentioned as dampening consumer spending.

Meanwhile, U.S. unemployment keeps rising. China actually cares if its citizens are employed. Why is that? Well, they riot when they're not working (and even burn down factories and kidnap a few executives). The U.S. worker doesn't.

The plan for cash-rich U.S. companies seems to be, ignore the U.S. consumer because after all he/she has no money and turn their eyes overseas to healthier markets, like China.