Tom Friedman Explains The Problem With The Economy

Tom Friedman says the way to get the economy moving is with a “grand bargain” that “slows the growth of both Social Security and Medicare entitlements” along with “reform” that cuts taxes for the rich and corporations.

Tom Friedman says this will provide “certainty,” so companies will have “confidence” and will invest and hire.

You see, the problem isn’t high unemployment leaving people out of the economy, resulting in businesses not having enough customers coming in the door. That is not the reason businesses don’t feel confident enough to expand and hire.

And the budget problem isn’t because Bush doubled the military budget after Reagan did the same, after cutting taxes on the rich… And never mind that the budget didn’t have a deficit before those things… And never mind that they said they were “cutting the government’s allowance” and “starving the beast” in order to manufacture a deficit crisis so they could scare people into cutting the things we do to make our lives better. Never mind that they said that was the plan

The real problem with our economy is that regular working people have too much, and the wealthy and their corporate masks have too little.

And we need a “Grand Bargain” imposed on us from the top, instead of just going with the results of the election we just had or all of the polls in which people said they want JOBS, higher taxes on the wealthy and corporations, military spending decreased, and better retirement and health care packages for regular people…

Tom Friedman thinks the wealthy people at the top should be making the decisions, not the people.

Surely anyone can see the wisdom in that, right?

And yes, this post is in the category “Plutocracy

Update: TRADE DEFICIT. Dean Baker at CEPR says the problem is the trade deficit, in The Educate a Cab Driver, Educate Thomas Friedman Campaign:

Our cab driver could also explain to Thomas Friedman how a trade deficit of 4 percent of GDP (also $600 billion in annual demand) affects the economy. The national income accounting that students learn in intro economics is that GDP = consumption + investment +government spending + net exports. If we have a trade deficit of $600 billion then we need to have the other categories fill that gap to get the economy back to full employment.

In the last decade the demand created by the housing bubble filled the gap created by the trade deficit. In the 1990s the demand created by the stock bubble filled the gap created by a somewhat smaller trade deficit. Now we have nothing to fill the gap. And if anything Friedman’s remedies go in the wrong direction.

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