"Obama’s Master Class in Demagogy 101" --Economist Michael Hudson
Yesterday President Obama chose Knox College in Galesburg, Illinois (originally founded by anti-slavery activists in the 1830s) to float the economic program he has been working out with Wall Street investment bankers. His aim is to wrap this program in a democratic rhetoric. The speech’s actual content boils down to: “I’m doing fine and housing prices are recovering. The way to heal the economy faster is to make a Public-Private Partnership (with Wall Street) to finance new infrastructure investment. The government will guarantee a return – and if there’s any loss, we (you taxpayers) will bear it.” His political genius was not to sugar-coat the shady parts of his proposals.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.”
President Obama sought to get the debt problem behind him by acknowledging up front that it had cost “millions of Americans their jobs, their homes, and their savings. The decades-long erosion of middle-class security was laid bare for all to see and feel.” Not mentioned was how this “erosion” of security was what had produced the gains of the banks and Wall Street institutions that became his largest political campaign funders.
Now comes the hutzpah, trying to rewrite history while most people are still engulfed in it:
The reality, of course, the FICA wage withholding has just increased. And the president has let the crooked mortgage lenders off without prosecuting them, levying only a few pennies on the dollar of fines.
The problem weighing down today’s economy is still the debt overhang. Households are “deleveraging,” that is, spending their income on paying down the debts they have inherited. This is what is stifling market demand, and hence new investment and employment. Obama’s speech seeks to gloss over this problem as if his failure to write down debts is no longer an issue:
But “tightened our belts” means paying down debt and thus diverting spending away from goods and services. The debt has not been “shed.” It has been paid out of salaries, reducing what is left to spend on goods and services. When the media try to assure readers and viewers that the economy is on the way to recovery, it is as if the economy can afford to resume growth without writing down the debts that were run up by 2008.
The president acknowledged that “nearly all the income gains of the past ten years have continued to flow to the top 1%.” If he can’t deny it, best to come right out to say it. After all, is this not what he and other politicians have promised their campaign contributors? That’s what politics is all about today: making sure that the gains flow to the top 1%
The problem is, what to do about it. All this description of the problem looks like preparing the ground for what threatens to be the government’s next big giveaway: a Public-Private Partnership, based on privatizing America’s infrastructure.
PBO: "We’ve got ports that aren’t ready for the new supertankers that will begin passing through the new Panama Canal in two years’ time. We’ve got more than 100,000 bridges that are old enough to qualify for Medicare. Businesses depend on our transportation systems, our power grids, our communications networks – and rebuilding them creates good-paying jobs that can’t be outsourced. And yet, as a share of our economy, we invest less in our infrastructure than we did two decades ago."
The question is, how will infrastructure be financed. The danger that is looming is a giveaway to high finance, such as we have seen in Chicago, where Goldman Sachs and other hedge funds bought the right to install tollbooths on Chicago’s sidewalks with parking meters to squeeze out revenue at the cost of raising the price of driving and transportation in the city.
More about Private/Public and Rentier Society at:
http://www.nakedcapitalism.com/2013/07/obamas-master-class-in-demagogy-101.html
= new reply since forum marked as read
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As with anything anymore, it's another giveaway to high finance.
Public-Private Partnerships consist of publicly financing a project and privatizing a profit. I want to hurl 
every time I hear that neo-liberal term.
its a plane!
http://www.democraticunderground.com/1014551605#post7
actually, just another public-private partnership to hurl over.
They should be called "Contract on America Entities".
