I liked this part of the President's Inaugural address---
Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age.
---more because of the follow-up later than for the chastisement of corporate and Wall Street greedheads---
For everywhere we look, there is work to be done.
The state of our economy calls for action: bold and swift. And we will act not only to create new jobs but to lay a new foundation for growth.
We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.
We will restore science to its rightful place and wield technology's wonders to raise health care's quality and lower its costs.
We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age.
All this we can do. All this we will do.
Of course that was a tout for his stimulus package. But it's also a reminder of what work is and what it's for.
A nation's work, that is.
The Bush Leaguers did so much that was wrong---wrong in the sense of so wrong that if the world was just and God existed the lot of them would be going first to jail then to hell, but also wrong in that it was incorrect, misguided, foolish, a big mistake, dumb, and guaranteed to bring about failure and disaster---that it's hard to keep track of it all or decide which, after the invasion of Iraq, was the worst thing they did. Right now, I'm leaning towards their economic policy.
Because they had no economic policy.
What they had when they came into office was a gift list, immediate rewards to their pals and cronies. Massive tax cuts, de-regulation of everything they could get away with de-regulating, anything and everything the oil companies wanted, plus a gift card to be used at any time---a promise that whatever Big Business, Big Oil, and Big Money were up to, the Little Government That Couldn't would always look the other way.
This was more than a matter of the Government leaving the economy in the hands of the believers in the Invisible Hand. Under George W. Bush, the government got out of the economy pretty much altogether. It didn't just stop regulating, it stopped investing.
Governments invest by building things and by funding research and development.
The private sector builds things and funds research and development when it sees those things resulting in an immediate profit.
The Government does both because it sees the need now and the benefits in the future.
Where the government lays the groundwork, the private sector will follow or can be persuaded to follow.
By leaving the economy in the hands of the believers in the Invisible Hand, the Bush Leaguers left the economy to be run by the demand for immediate profit.
This was the most principled conservative thing they did, which tells us all we need to know about "principled conservativism."
The trouble was that the believers in the Invisible Hand had long ago discovered that the quickest way to profit in this day and age was through the buying and selling of toys and gizmos and lots of other useless crap.
I don't know when to date its beginning, but it's definitely been the case for the last thirty years that our economy has been based not on making things, not on actual work, even though we spend a lot of time supposedly at work, but on gobbling up things we don't need and didn't really have the money to afford.
The housing bubble was a part of this. People bought houses they just didn't need and couldn't afford. People who should have stayed renters bought Cape Cods. People who should have bought Cape Cods bought McMansions. People who shouldn't have bought McMansions, because they're a waste of space and energy and are mostly ugly, but who could afford them at least, bought second homes and "investment properties."
I'm not blaming people here, although the President did, indirectly and with a light and understanding touch.
There were con-artists at work in all this, but the point is that most people who bought houses during the bubble bought more square-footage than they needed, which is to say they bought a lot of nothing along with the amount of space they actually lived in.
On a smaller level, we filled up all that extra space with a lot of toys and gizmos. Wide-screen TVs, exercise machines, extra computers, video game consoles, the usual suspects. But also bigger and shinier necessary stuff---Refrigerators, dish washers, clothes dryers, cars---that by being bigger and shinier without bigness and shininess adding anything necessary to the machines' basic functions turned into toys and gizmos.
I'm not condemning any of these things in themselves or the owning of them. I'm not a Puritan. The bare necessities, the simple bare necessities, may be enough for Balloo the Bear to get by on, but life is more pleasant, more enjoyable, more, ahem, bear-able, for there being in it a few luxuries, harmless self-indulgences, and toys and gizmos that add nothing of immediate practical value but give comfort and solace and a sense of momentary peace.
But very few of these toys and gizmos were made here, so by gobbling them up we weren't helping our own economy produce, only spend. We weren't helping put the nation to work. And---this is the more important part and gets back to what the President said yesterday---the thing about useless crap is that it's useless, you don't have to use it, which means that you can get by without it.
On top of that, there's only so much of it we can fit into our lives. After a while, there's just no more room for it. We just run out of space. And we run out of time. It's great to have a wide-screen TV and 250 channels, but when do we get to watch it?
But even if we have the time and the space, at a certain point, we've just spent all we have to spend on this stuff. We run out of money.
Which is what has happened on a massive scale.
People don't have the money to spend, or feel like spending, on useless crap.
The elites in Washington didn't notice that the economy had gone south until their own stock portfolios and 401(k)s took the big hit last fall. But that hit just took a long time connecting. The blow was delivered years ago when lots of regular people started losing their jobs and lots of others couldn't find new ones or better ones and all the rest of the regular people got worried.
I'm not sure the elites in Washington yet understand the 2004 election was about the economy as well as about the War on Terror, which is why George Bush almost lost, and the 2006 election was as much about the economy as about the war, and the election of 2008 was about the economy more than anything else.
Whatever the reason, though, either because we couldn't afford it anymore, or we figured out we didn't need it, or we ran out of time and room, we cut way back on the buying of toys and gizmos and useless crap.
And so goodbye, Circuit City!
To be simplistic about it, which I have to be because I'm simple-minded. Circuit City is only a synecdoche for a big chunk of the Corporate Profiteer-driven economy. The believers in the Invisible Hand had decided that the country needed and wanted and would always need and want an endless supply of useless crap and more and more of it. Again, the housing bubble was part of this. The idiotic notion that housing prices would keep going up, coupled with the blockheaded decision that it didn't matter that people couldn't really afford to pay those ever-increasing prices, pumped lots of air into the bubble, but so did the fact, rather, the ignoring of the fact, that there are only so many people in the world. Apparently it never occurred to anybody it should have occurred to that people don't buy houses like they buy other toys and gizmos, to be used for a couple of years and then disposed of when they break. Once people buy a house, they're usually in it for a long, long time. Which is to say that when you've sold them a house, you've taken them out of the market as future customer. But houses kept getting built and put up for sale as if wherever you stuck a For Sale sign in the ground, whole armies of potential buyers would spring up, like soldiers from dragon's teeth, armed with pre-approved adjustable rate mortgages.
How many "neighborhoods" now standing empty were built on the assumption that if you built it they would come?
What I'm getting at that the whole economy, with so much of it based on the buying and selling of useless crap, was a kind of a bubble.
As much as we congratulated ourselves on our "productivity"---or rather were told by the Big Business elites and their apologists and cheerleaders in the Media and in Government to congratulate ourselves, in lieu of being rewarded for it with things like raises and benefits and job security---we weren't producing very much. We weren't working.
We were just consuming.
We, and I mean we as a nation run by the believers in the Invisible Hand, had become a nation of grasshoppers. Yesterday, the President said it's time we got back to the serious business of being ants.
In those parts of the address I quoted above, the President was announcing that the Government was going to get back into the economy. There is going to be an economic policy. The Government is going to invest again. It is going to fund research and development. It's going to build things. The Government is going to see that things are done because they are needed now and well benefit us later and not because they will profit some of us immediately.
There's a good argument to be made, and Krugman and others are making it, that the President's plans are all well in good but maybe a little too farsighted. Jobs will be created down the line, but we need jobs, lots of jobs, now. I tend to agree, but right now I just want to focus on the good part.
The President's plans are based on the idea that the point of it all is not profit, and it's not for us to be able to go back to buying more toys and gizmos and other useless crap.
The point is to put the nation back to doing real work, and for one reason. Emphasis added at the end of the quote coming up here:
Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched.
But this crisis has reminded us that without a watchful eye, the market can spin out of control. The nation cannot prosper long when it favors only the prosperous.
The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on the ability to extend opportunity to every willing heart -- not out of charity, but because it is the surest route to our common good.