Here's the thing I've been warning about for a couple months come to pass. Consumer confidence cratered last month, reaching a ten year low after the third round of misguided tax cuts had their lingering effect on consumer spending. Having shoveled billions into unproductive manufacturing -- of bombs and things that, once you build them you have to pay to maintain -- while ignoring the larger issue of American competitiveness, education and trade-oriented production, consumers are seeing that their futures isn't what the Bush tax plans have at heart.
If we want not only to experience an economic recovery (a purely short-term issue), but also prepare the American people to compete in the 21st century, we have to do more to promote lasting employment in industries that export value to other economies. That means a recommitment to education at all ages, the ability for any worker to write off investments in learning, just as a company writes off capital expenses that will produce profits at a later date. Simply cutting taxes for investors, whose primary goal is return of capital, does nothing to promote growth, because they will put there money to work anywhere, not just in the United States. Since the U.S. is being gutted at every level of government, crippling the people's ability to work together through political organizing (since winning an election does nothing if the ability to tax and invest socially has been eliminated), the only option is a wholesale change in the American political process, starting with individuals banding together to invest in one another. We, all of us, not just the top one percent, will get out of this hole together or we will sink together, to paraphrase Ben Franklin.
This month, consumers showed that they see the Bush Administration is not in this economy with them, but against them. And what will the President do? Another tax cut, increasing the debt our children will pay off?
Posted by Mitch Ratcliffe at September 30, 2003 09:22 AM | TrackBackThere is a correlation between the confidence in the political system and the performance of a specific economy. Thus, if the citizens foresee stability, and trust the political corpus, there is investment and consumption.
Consumer confidence should be used as a political, more than economical, indicator.
I think it is both -- clearly, workers are not feeling confident about the government's concern for their future. Just today, the Bureau of Labor Statistics released its Metropolitan Area Employment and Unemployment report for August: 183 metro areas had increased unemployment, 123 had lower unemployment and 25 stayed roughly the same. In California, eight metros have unemployment above 10 percent. Not a confidence-building picture, whether you believe the market is an efficient allocator of resources or that the government is organized on principles of creating a greater good for all instead of the top one percent.
Posted by: Mitch Ratcliffe at October 1, 2003 08:42 AM