A moratorium on housing foreclosures and evictions is a good idea. So is making the tax code more progressive. Obama's plan to build new public works is smart. But those are half-measures. Even if they don't come out of Congress watered down and wankified, they'll come too little and too late to kill the rapidly metastasizing disease that threatens to kill the U.S. economy: income inequality.
Employers are shedding jobs at a breathtaking rate: more than 560,000 per month. The rate of job losses could soon hit a million. People who still have jobs are being squeezed by pay cuts and freezes; even those who have yet to be affected are closing their wallets out of fear that they'll be the next to get chopped. So consumer spending, which accounts for two-thirds of economic activity, is plunging. Moreover, millions of individuals and businesses have lost access to credit and thus the movement of capital that might have pulled us out of this tailspin.
"The key is that the consumer is in the worst condition since the Great Depression," retail consultant Howard Davidowitz told NBC News. Boarded-up shops will abound. Experts expect 73,000 retail locations to close during the first few months of 2009. Between 20 and 40 percent of national retail chains will shut down. This isn't a recession. It's a depression, and it could destroy the country.
If broke consumers are the problem, shoveling money into their pockets is the way to get them spending again. Where do get it? The reason Willie Sutton robbed banks, he supposedly said, was because "that's where the money is." These days, the money is the hands of corporations and rich individuals.
(Warning: boring economic statistics and analysis follow. But stick with me. You could get a check!)
http://www.altweeklies.com/news/only_one_solution_eat_the_rich/Story?oid=813240
