Chart on Wages vs. Corporate Profits

This is the biggest failure of President Obama. The red line represents corporate profits. The blue line is wages. The corporate world has done well after the 2008 Wall Street crash. Wages have not kept up with cost of living expenses. Obama spent much of his first-term with an addictive need to be centrist. Sec. of Treasury Tim Geithner viewed aid for the middle class with contempt.

The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as [then chairwoman of the Council of Economic Advisers Christina] Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt.

Austerity measures would only strengthen a recession during an economic downturn. Economists Carmen M. Reinhart & Kenneth S. Rogoff predicted the economic crisis and that policymakers would hurt the recovery by implementing austerity policies. Geithner is too stupid to be Treasury Secretary.

Bonus Quote of the Day

"It’s not healthy for rich people to feel maligned."

Anonymous Wall Street executive.

This executive and other rich people feel President Obama has been too mean to them. That explains why Obama extended the Bush tax cuts.

The Investors Strike Back

One of the paradoxes of the Great Recession (I do not recognize this "double dip" phrase because I never saw the first recession end) was that corporations were swimming in profits -- and stock prices were sky high. We almost grew used to seeing the Dow Jones index above 12,000 points. All of that changed in the past few days, since the debt ceiling was raised -- the Wall Street ceiling has fallen. Nobody knows when it will land.

Despite investors placing money in corporations by purchasing their stock, American employment has been stagnant -- companies didn't want to hire, despite having the cash to expand. Companies argued that markets for new goods didn't exist since, well, none of them were hiring new people.

That negative feedback loop perpetuated itself until Obama was elected, passed a historic stimulus bill that spent a few hundred billion on needed infrastructure repairs around the country, put people back to work, created markets of employed workers who would purchase more goods, and prompted private companies to start hiring again to cash in on the new prosperity.

Hah! Just kidding. Obama's "stimulus" bill spent $26 billion on highway infrastructure projects, while allotting $116 billion for a tax credit. Fat lot of fucking good that did -- Obama added that to get Republicans to vote for the stimulus deal, which none of them did. Corporations awash in investors money still didn't hire, and now investors finally realized that corporations tied to their stock portfolios weren't going to expand, so they fled.

Lesson to corporations: If you don't spend the money when you have it, then you lose it.

Lesson to Obama: Stop fucking around with Republicans on useless bullshit like deficit cutting when, right now, we need deficit spending like crazy -- and that doesn't mean spending on tax cuts. Raise those. And if you can't sell this policy to the American people, sit aside and let a candidate who will do the right thing run for president.