The shocking thing about the financial collapse of 2008 is not that Wall Street excesses pushed us into the worst economy crisis since the Depression. It's that the same financial system has been propped back up and that elites are getting richer than ever, while the effects of that collapse are continuing to sandbag the rest of the economy. Oh, and most of this aftermath happened while a Democrat was in the White House.
Consider:
• The biggest banks are bigger and more concentrated than ever.
• Subprime (subprime!) is making a comeback with interest rates of 8 to 13 percent.
• Despite Michael Lewis's devastating expose of how high speed trading is nothing but a technological scam that allows insiders to profit at the expense of small investors, regulators are not moving to abolish it.
• The usual suspects are declaring the housing crisis over, even though default and foreclosure rates in the hardest hit cities and states are upwards of 25 percent.
• The deficit is falling, now just 2.8 percent of GDP, thanks to massive cuts in social spending. Isn't that reassuring?
Meanwhile, back in the real economy, good jobs are far too scarce, incomes are stagnant, while 95 percent of the gains go to the top one percent. […]
The thought occurred: Wouldn't the economic dislocations of a serious effort on climate change be more bearable if the economy were at full employment?
And also: What would it take to finally get us out of the aftermath of the financial collapse?
The answer is pretty straightforward. We need massive public investment in both basic infrastructure and in a transition to a sustainable economy.
We need to finance all of that partially by larger deficits—which will be recovered by improved economy performance—and partially by higher taxes on those billionaires whose activities cause financial collapses.
The right order of magnitude is something like $200-$300 billion […] a year, for ten years. Not an abbreviated, "timely, targeted and temporary" stimulus like the one Obama sponsored at the pit of the recession, but an ongoing program of economic renewal.
Such a program would create good jobs, incubate domestic technologies, restore rotting infrastructure, make American more resilient in the face of sea level rise, and make the economy more productive and competitive. What's not to like? [...]
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