Conservative economic policies have us slip-sliding down that old rocky slope. The mantras of that vision are well known to us all, as we've heard them over and over for the last 2 or 3 decades:
No free lunch
What's good for business is good for the country
Starve and shrink government
Privatize government services
The fundamental problem with this vision is that it ignores one simple, indisputable fact: WE'RE ALL IN THIS TOGETHER. This is true whether we are talking about the economy, the environment, towns and cities, states and nations, social groups, or our overall existence in space and time. If, we're all in this together, then the "Golden Rule" that we care for others as we care for ourselves is our best strategy, not just for mere survival, but to thrive and live lives of purpose and meaning.
From the 1940s to the 1970s, based upon our collective understanding that we are all in this together, this country built up a social safety net, consisting of things such as disability insurance, retirement systems, minimal income support (welfare), health care access for the elderly and the poor, worker safety and benefit programs. In the 1980s, conservatives began efforts to systematically dismantle those. Remember when we heard the calls to "end welfare as we know it" because "there's no free lunch" and "everyone must work for their living?" Government was too big, they said, and was "redistributing wealth" by taxing the rich to spend it on the poor (especially poor people of color). It was that evil socialism!
Remember when conservatives demonized welfare as money down the drain, given to ne'er-do-wells who blew it on luxuries like the most famous nonexistent object in history, the "welfare Cadillac?" They refused to listen to those of us who warned that welfare money was not being given to the recipients alone, but to all of us, to our society in general. They refused to hear that the welfare "giveaway" went from hand to hand through the economy building jobs and income repeatedly and even generated tax income back for the government. They could not see that we are all in this together.
These were the same people who were telling us that the profit motive (ie., greed), unrestrained capitalism and free trade would solve all our problems. They proudly busted up unions so that working folk had no advocates and then they shipped the jobs overseas. These were the same folk who actually believed that the investment house Smith-Barney earned their money "the old-fashioned way" when, in fact, they never earned a single dime that way.
There were some voices in the wilderness who warned where all this was heading. But progressives didn't have many strong voices to present the alternative views and, most important, they did not have control of the government and the media. Some, who might have stood stronger against this madness, like Bill Clinton, were suppressed by a conservative Congress and by their own political missteps.
Over the years, middle class economic power, the engine that drives our economy, was eroded. Not surprisingly, people stopped saving. They didn't have any choice but to spend every dime they earned. As savings were exhausted, to keep them spending, the financial powers opened up credit available at exorbitant and rising interest rates. This soak-the-middle scheme could only go on so long. The Bush administration added to the burden by engaging in a war of aggression paired with further tax cuts for the wealthy. Those who benefited most of this war--the Haliburton profiteers, the oil companies who now have control of Iraqi oil--got this war booty at the expense of Middle America.
The coup de grace was deregulation that allowed rampant speculation in the oil market and creation of fictitious investments ("toxic assets") for rich people to swap among themselves. In recent years, as speculation drove gas prices up (which in turn drove up the price of just about everything else) who do you supposed was hurt the most? It wasn't the Wall Street wizards; it was the millions upon millions who were driving the trucks, growing the food, manufacturing the goods, driving to and from work and school. It was the small and mid-sized businesses where the bulk of our jobs are created and the majority of our real goods and services are produced.
So wham! We hit that brick wall; now we ALL are waking up with the same headache. Once again we see clear evidence that we're ALL in this together. Well, some of us see that anyway. Some still don't get it; they're looking everywhere for someone to blame when the mirror would be the most logical place to look. When John Q. Public couldn't keep paying those "adjustable-rate-upward-only" mortgages because he'd lost his job or had a health care crisis (there's a whole other story), Mr. Moneybags in the loan industry turned to that former "enemy" he'd been busily trying to starve to death, the mean ole big US government. "Help us, please, or we'll stop making the loans everyone depends on now!" I guess they don't consider it socialism when they are the recipients of the "welfare."
The financial institutions got their money and continued merrily along on their same old ways in secrecy. There's little indication that they are using it to help out the folks who were really in distress. If that money had been directed to assist those in foreclosure, instead of their financial "captors" it would have benefited everyone including the big financials. Then here comes the auto industry asking for LOAN assistance of $15 billion--about the same as a few weeks of the war in Iraq. It was termed a bailout, but it was a very different kind of bailout that genuinely would help middle and lower income folk across the country. Conservative Republican Senators killed the deal unless the auto industry busted their unions and cut worker pay (when worker pay was not the problem). Better to hold to their ideology than, Heaven forbid, help middle America. They just don't get it that we're all in this together.
It's not only here in America that conservative economic principles have been wrecking havoc. Please read The Shock Doctrine by Naomi Klein in which she details how economic shock has been applied to countries all over the globe to force them into unregulated capitalism. And this recession now is worldwide.
Conservative economic myopia sees only what is right under its nose. There are voices out there right now who still attack the American safety net and are trying to blame our economic downturn on it. They denigrate as "entitlements" and "giveaways" Social Security, Medicare, and Medicaid, and hold them responsible for our budget deficits now and in the future. Yet, another word more accurately describes these programs: Investments! Unlike our spending on things like war, spending for social programs is a "rising tide that lifts all boats." No PhD in economics is necessary to follow the logic. If poor person A gets medical care they would not otherwise get, where does the money go? Doctors, hospitals, nurses, drugs--and right now too much also goes to the private corporations managing that money. If elderly person B has a minimal income support of Social Security, where does the money go? Those receiving those funds in turn spend them on their needs. These "investment" moneys get spent and re-spent and most of it right here in America. Jobs are generated and taxes on the earnings are paid back to the government. Most important, money is spent, not on death and destruction, but on positive social goals.
Furthermore, if we can keep from falling from deep recession into deep depression, we will have those pesky "entitlement" programs to thank for it. We'll remember why we created them in the first place.
There is more that we need to do to rebuild the economy via investment. Universal access to health care will benefit not just those who get the care, but also the American businesses who cover their employees and the providers of the care and all the people they support in the economy. Similarly, government spending to promote energy efficiency and environmental protection will build middle class jobs to replace the industrial base we've lost while saving costs throughout the economy that are now based on fossil fuels. Education produces both the wizards and the working folk who will take us into the future.
Progressive economics is based upon the understanding that we are all in this together and that our society is no richer than it's poorest member. It supports capitalism but not laissez-faire capitalism. It knows that there is no such thing as a pure economy and a mix of regulated capitalism and socialism seems best. It understands the difference between government spending and government investment and calls for progressive, not regressive, taxation. Yes, in fact that DOES mean that the rich pay more. They should; they benefit more! Progressive economics involves balancing the power of the employers and workers through unions, safety regulation and benefits. Instead of either the unrealistic isolationist stance against foreign trade or the promotion of free trade (which doesn't exist), progressive economics supports fair trade with environmental and worker safety controls and incentives to boost American businesses.
Obama appears to be getting ready to apply some of these principles. It can't come a moment too soon because, even if implemented on day one of his administration (which is unlikely) it will take months and years for this rebuilding of our economy to occur. We will have learned our lesson; let's hope that it sticks for a longer time than the previous learning did.