For the Economy, Help is Not on the Way

Common Dreams

If there's some new technological innovation--like the Internet in the early 1990s--waiting in the wings, no one has heard or seen it.

Forget about Congress. The feds wasted hundreds of billions of dollars to bail out banks, insurance companies and big automakers who used our taxpayer money to give raises to their top executives and remodel their offices. Meanwhile, the stimulus that needed to happen--bailing out distressed homeowners, small businesses and individuals who lost their jobs--never happened. Now Congress is worried about the deficit. So read my lips: no new bailouts, not even one that might actually work.

Some think the U.S. could export its way out of the depression. But a radical restructuring of trade agreements and manufacturing infrastructure would have to come first, followed by years of expansion. U.S. policymakers haven't even begun to think about the first move. Moreover, the rest of the world isn't in a position to buy our stuff. The rate of expansion of the economies of China and Japan is slowing down. Germany and other EU nations are imposing austerity measures.

Globalization is key. Writing in The Wall Street Journal, John H. Makin argues that the actions of individual G20 nations threaten to bring the whole system crashing down in a Keynesian "paradox of thrift."