Please sign the petition at the end of this article.

How to Fix the U.S. Economy—It’s Now or Never

In a recent New York Times column economist Paul Krugman made the case that the U.S. economy may be entering a sustained depressed state, one in which we are likely to be in or constantly hovering near a depression for decades to come without the ability to pull ourselves out. In fact, he cites Larry Summers (former Harvard president and darling of Wall Street) who makes the same case.

If we do nothing, of course, he is right. But as much as I admire Paul Krugman, I dislike a defeatist attitude even more. Most of all, I hate getting the royal shaft by poor little rich boys masquerading as honest brokers.

The Deceivers. This time the enemy consists of the super rich, namely, corporate bankers, hedge fund managers, and corporate CEOs. Together they are ganging up on the rest of society, they are robbing us blind, and they are laughing all the way to their own banks, and to those offshore tax havens in the Cayman Islands, Switzerland, Bahrain, Singapore, Lichtenstein, Macao, Barbados, Hong Kong and other locations. Yes, these rich little boys are busy buying up state and national legislators in droves, they are gerrymandering voting districts, and rigging elections hither and yon in wide swatches across America on the belief that you and I haven’t the guts or the intelligence to do anything about it. In state after state they are buying their way to permanent power by paying hundreds of millions of dollars to nominate and elect traitorous nincompoops like Ted Cruz, Rand Paul, Michelle Bachman, Marco Rubio and a host of other Tea Party mental midgets whose votes on all issues are bought and paid for in advance.

The Deception. When these puppets haven’t the votes to actually move their agenda, they obstruct all efforts by others to act in the interests of us all. But in this game of divide and conquer, big money eats up little money, and the high rollers have mountains of that green stuff backing them. The Koch brothers alone are worth a reported $74 billion. Thwarting their agenda is like trying to win in a game of poker in which the deck is stacked against you, and you have a just 20 bucks. We will never win at this game, but we can if we change the rules. Here is an outline of how to beat them:

The Real Problem. Krugman correctly acknowledges that weak demand is at the heart of the matter. Consumer spending normally accounts for 70 percent of GDP. But when the economy is weak (like right now) consumers tend to save more, and spend less. Spending is down to 65 percent of GDP. And less spending means lower production, lower incomes, sustained unemployment, and less tax revenues. Pushing the economy past this point is not that difficult in theory, but it can be very difficult in practice.

The Federal Reserve’s response to this malaise has been to depress interest rates, and to inject huge amounts of money into the economy with the expectation of boosting consumer spending and spurring business expansion. Only the Fed can buy up bonds and make trillions of dollars in cash available from those transactions to member banks. What it cannot do is insist that banks lend that money to consumers or to businesses. And therein lies the rub.

The Detour. Banks are not lending to consumers or to small businesses. Instead they are happy to pay 0.25 percent to borrow, while they receive returns of 20, 30 percent and more in the stock market on their investments. It’s practically free money to them, with next to no risk of loss (we’re too big to fail, and the taxpayers will bail us out!), while they rake in enormous returns. And by the way, notice that the 500 richest corporations in America (the S&P500) are doing quite well also. Their stocks are up 170 percent in this dreary depression like economy. Beside, their puppets in Congress are only too happy to assure they can continue playing this game far into the future.

Ultimately, this is a game called Reaping the Wild Wind. It cannot go on forever. Yet those just smart enough to create it are also just dumb enough to be crushed by it.

The Fix. We can begin to level the playing field by insisting that the Fed re-direct some of that “free” money away from corporate banks and into community banks, to credit unions, the Small Business Administration, Fannie Mae and Freddie Mac, as well as into rebuilding America’s infrastructure via repairs to highways, bridges, dams, power plants, and power grids. Not coincidentally, these needed projects would put a lot of Americans back to work. Every dollar that goes into these projects and places would get into circulation and produce $6 in GDP. A $2 trillion injection would boost GDP by $12 trillion, incomes by $10 trillion, jobs by 50 million, and tax revenues by $4.8 trillion.

Now that you know about the grand deception, the real need, and how to change things for the better, all you need is the motivation to act. Here is that motivator:

The Action. I have a petition destined for the President and his Cabinet, also to the entire U.S. Congress that is now circulating on MoveOn.com. Here it is:

http://petitions.moveon.org/sign/how-to-boost-incomes?source=c.fwd&r_by=5458923

It may take 10 million or 100 million signatures to let Capitol Hill know that we are wise to this game and to stop bankers and the super rich from playing us for suckers. Whatever it takes it must start with us.

Click on the link (or cut and paste into your browser), sign the petition, and send it on to every concerned person on your mailing list. There are 300 million Americans, and 10 times that many well-wishers around the world who are waiting on you and me to take the next step. If there was ever a right time to be on the right side of history, this is it.