What Bernanke Should Be Saying

I guess I should feel good that Ben Beranke is telling us that the government is going to start regulating the market again. (With Stimulus Comes Need for Stability, Bernanke Says)

But I don’t.  If the people in charge of the economy and the government are not willing to say aloud why the economy is really collapsing, what chance will we have for really fixing it?  What I want Bernanke (or Obama) to  say aloud is that the past thirty years of economic “growth” have not been good for America or the world.  What I want them to say aloud is that Reaganomics and the Trickle Down theory of economic growth were WRONG.  Since 1980 we Americans have basically been sold an ideology and set of policies that have made the rich richer and most of us much worse off.  Remember that whole “a rising tide floats all boats” line?  It was as true as your lover telling you that you didn’t look fatter after the holidays. Oh please!

In fact, what’s happened in the past 30 years is that wealth in America has been radically redistributed to the richest among us- primarily through tax breaks and a tremendous lack of government oversight or regulation.

According to Cornell economist Robert H. Frank, in his book Falling Behind: How Rising Inequality Harms the Middle Class, the problem with letting the rich get richer and richer and richer is it puts pressure on all of us to “keep up.”  Want your kids to go to a good school?  Then you better be willing to lay down half a million dollars in that posh neighborhood for that house.  Want to survive on highways filled with Hummers?  Better trade that lightweight and fuel-efficient car in for an SUV.  Want to “keep up” with the neighbors?  Then you better learn to take on more and more debt in the form of mortgages and credit cards and the like even though that debt will ultimately make you poorer.  The real middle class in America now has something like $9000 in credit card debt while the rich among us use credit cards without having a balance or interest on their “free money.”  Through the magic of Visa and the manipulation of statistics, the real middle class looks like it’s better off, but our increase in consumption is due to debt and the supposed increase in household income is largely due to women’s participation in the labor market.

And now the real middle class is being told that “more oversight of financial institutions” will save us when the only thing that will actually save the economy is a radical redistribution of wealth back to it’s pre-1980 levels, when all categories of Americans were seeing their wealth grow- slightly.  Of course, our chances of hearing the “truth” from Bernanke or the other cheerleaders of neoliberal economic policies and ideologies are about the same as our chances of fitting into that pair of shorts we were wearing last summer.