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The upper class is using the Great Recession as an excuse to gut social programs

2012-06-03

Paul Krugman’s latest column in the New York Times bares the ugly truth for all to see: the upper class, those who are in control of the economy, want to use the Great Recession as an excuse cut social programs from government spending and starve the already suffering under class into submission.

There is clearly no other reason why those in control of the economy do not pursue the social spending policies that have been shown to promote growth.  Krugman says that he spoke to those in charge in the United Kingdom (which happens to have easy access to huge amounts of credit), and they admitted that “it is essential [to] shrink the size of the state”.  They don’t want the economy to get better.

As a matter of fact, the United States has access to even more credit than the United Kingdom: Federal investment instruments are selling like hotcakes at incredibly low interest rates.  But neither the UK nor the US is willing to use their borrowing ability to shore up their economies.  What they want is to eliminate social spending from government budgets, using the economic crisis as an excuse.

Contrast this position with that of the Chinese government (who are as evil as they come on human rights policies): sensitive to a reduction in their growth rate, they have instituted increased government spending policies that will improve growth again in the summer of 2012.  Those policies: increased infrastructure spending, increased small loans to consumers, increased money to pensioners.  They did the same thing in 2007-8, only on a larger scale, and as a result, China’s economy resisted the Great Recession.

China doesn’t want their growth rate to drop below 8% because it may cause economic discomfort for the people.  This may cause them to complain about government policies that they find intellectually objectionable, but would otherwise have accepted because of their prosperity.  In particular, there is the lack of “rule of law” (as so poetically described by Chen Guangcheng in his letter to the American people, published in the New York Times last week) and the censorship that prevents people from talking freely about their problems.

So the Chinese, to prevent social unrest, have instituted pro-growth policies quietly at the very onset of a mild drop in GDP growth rate.  The rest of the world, with the exception of countries like Sweden and Austria (with “big government” policies), are by and large sticking to austerity policies.  As a result, there is continued weakness and even declines in GDP.  Economic weakness has stimulated mass demonstrations, which became violent in the UK.

The upper class thinks that they can handle the demonstrations with restricted movement, pepper spray, and arrests.  Limited news coverage and compassion fatigue combined with exhaustion and the crush of personal problems inhibits persistent demonstrations.   Even voting and the democratic process is of no help because politicians in all parties have been bought and paid for by the upper class.

Conditions that are this frustrating could lead to organized insurrection and possibly even revolutionary violence.  This worst outcome could be easily prevented.

The truth is that the upper class needs the under class as much as the under class needs the upper class.  Both are part of an organic whole, a functioning society that contains and sustains all classes of people.  The classes must work together for the benefit of society as a whole.

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