A Story for May Day: The Fed, Apple, and Trickle-Down Economics
Robert Reich
Wednesday, May 1, 2013
It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that’s not what’s going on. Apple, remember, is still sitting on $145 billion.
The reason big companies aren’t creating more jobs is consumers aren’t buying enough to justify the expansion. And government is cutting back on spending.
Big corporations are borrowing simply in order to push stock prices up and reward their investors.
It’s a sump pump with the Fed on one end buying up bonds to keep interest rates low, and shareholders on the other end raking in the returns.
Get it? Easy money from the Fed can’t get the economy out of first gear when the rest of government is in reverse.
Trickle-down economics is the first cousin of austerity economics. Austerity is nuts when so many millions are out of work. And as we’ve learned before, trickle-down is a fraud. Nothing ever trickles down.
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Robert Reich did a surprisingly clear exposition of the problem with Obamanomics but I have wondered why the parallel to Carter’s Grand Experiment with tight fiscal policy and loose monetary that gave us the Misery Index?
One can object that it is not Obama’s fault with the lunatic Tea Party in control of the House though Obama surrendered the House to the Republicans without a fight.
But Obama is right in tune with the supposed need to reduce the deficit and then the government debt while unemployment and increasing inequality with more and more Americans falling into the netherworld of poverty that puts them far outside the notice of our entertainment complex that includes politics.
Obama is making a powerful bid to be a worse president than Bush, Jr and I expect Hillary Clinton to outdo both with her record.
If only Nixon could make another of his patented comebacks.
Nixon seemed such an atrocity at the time of his election and beyond. Every president since has been worse and worse than his predecessor IMO.
Best, Terry