You're Thinking of this Place All Wrong

I recently attended a political event that convinced me we're in crash and burn mode, and it's because so many people are thinking of this place all wrong.

People are frightened and see their salvation in grabbing whatever they can grab for themselves, no matter that it's at the expense of others. They particularly like the idea of budget and tax cuts even though we already have solid evidence that years of the Bush tax cuts led to the slowest average annual growth since World War II and the worst job creation numbers since the Great Depression of the 1930s.

They see that big business isn't paying much in taxes at all and still clammors for more cuts. Then, small business get into the act. Small business owners complain that big business is getting more than their share. They want in on it, seeking their own credits and cuts. Small business owners even threaten to go to states where they will get more tax incentives. The tea partiers see all of it and want no personal taxes. They don't complain about the regressive tax system. They imagine that when they become wealthy, they won't want to pay taxes despite the unlikelihood of that happening. The result is a run on the federal and state treasuries of this country, no different than the bank run depicted in the famous clip from Frank Capra's 1946 movie depiction of the Great Depression It's a Wonderful Life embedded above.

The reality is that our tax dollars are not cash out. They are investments in the country. As the movie character George Bailey described to his customers in the clip above, their money wasn't in some vault in the back of the bank. It was invested in the community, in "Joe's house... in the Kennedy house and Mrs. Maitland's house and 100 others." In the case of taxes, the money isn't in some vault somewhere, but in government programs, government employee wages, infrastructure that helps your customers get to your business and your employees get to their jobs, education for your and your neighbors children and grandchildren, which also happens to help local businesses find qualified employees, and unfortunately, your tax dollars are also invested in unnecessary war (but that's a whole other issue).

That is not to say we cannot improve where tax dollars go. We can end unnecessary oil company subsidies for example. However, we don't have to give up the entire country to stop unproductive and unnecessary spending.

The other reality is that tax cuts don't create jobs. They bring economic contraction because businesses spend and hire when they get more business, not when they get a tax cut. If people do not have well paying, secure jobs and affordable necessities like health care, they won't spend on discretionary items. Private spending will decrease, business will slow, banks won't want to lend the businesses with no business and jobs will disappear. Then, it starts all over again in a vicious downward spiral.

I welcome all those complaining Illinois business owners to move to Wisconsin. After a few years of the Scott Walker economy, Wisconsin is going to be falling apart. They're not going to have much in the way of education, and in that anti-labor climate, average working people will have low paying, insecure jobs. That will decrease local business, and further depress the housing market. Then, I wonder if things will be any better in Illinois in a few years as the voices for cuts and economic contraction seem to be the only ones heard these days.

It's a Wonderful Life is only a movie, but it depicts bank runs that really happened in the 1930s. Many banks fell, but in this story the Bailey Building and Loan was saved because George convinced his customers that they needed to sit tight for the sake of the community, and that patience in turn would help them all individually. In our here and now, we have no George Bailey using our own economic scare as a real teachable moment. Even our Democratic leaders are so afraid of the well and corporately funded right, that they won't talk about community investment or explain the vicious cycle of downward spiraling jobs and business. They won't try to convince the community to sit tight for each others sake, and their own.

Without the lesson of this teachable moment, our bank run isn't being stopped. People continue to clammour for their cut of the tax cuts even though this brand of trickle down economics runs against known and proven economics. People have been divided and conquered and no one asks them to stop, think it through and realize that we are each others salvation, each others only salvation.

It's a perfect muddle and it's unlikely we'll get out of it unscathed. I walked out of that political meeting as the attendees and sponsoring legislator sat bright eyed and closed mouthed during a speech by a man sure that immigrants were taking what rightfully belongs to real Americans. He evidently missed the story about the town that lost its economy when it pushed out its immigrant population. Immigrants eat, wear clothes, get  haircuts, pay for shelter and generally spend money in town, a fact lost on so many "real Americans".

I never wanted to think this before, but it may just be that we have to hit rock bottom before enough 2000-era people figure out what was well known in 1946, so much so that the concept became a central theme of a most beloved movie of that era.