The World In Protest, Revolution or Civil War, Part Fourteen

This was first published in May 2012.


"The Battle Over Budgets" Part One/Overview

While technically the "Great Recession" ended a couple of years ago, the effects of the crisis continue to linger. In America, new home sales remain at low levels, thus keeping the home building industry, and its associated businesses, slow. Hiring has been relatively steady, but not robust, bringing down the unemployment rate at what seems an agonizingly slow pace, although it must be noted that government employment cuts at all levels have negated part of the gains in the private sector. Further, we can't forget that just as the economy turned the corner from severe downturn to the upside, the Gulf oil spill brought new economic problems, as well as a literal mess to the states along the coast there. Then Japan was rattled by a major earthquake, shaking not only that country, but bringing the economic jitters to many, especially the then recovering American auto industry. We have to remember folks, like it, not like it, nations, including America, are no longer just dependent upon their own economies and resources, they are all entangled to varying degrees of, well, "entanglement." If a major nation, or group of nations, sneezes, other nations catch cold too.

Further, the attempts to rein in the "casino-like" atmosphere of the banking industry has not been very successful, although higher reserve requirements mean banks have had to take money from other parts of their business to meet these requirements. Bankers undoubtedly argue that this reduces the number of loans they can make, thus limiting economic expansion, and there's certainly truth to that, but we can't have things both ways folks. This is what happens when we let things get out of hand, which is what happened. The banks went wild, the collapse came, and now we're trying to get the cat back into the bag, but it is a painful process. Attempts to regulate the banks more directly has essentially failed, as banks, along with largely, but not exclusively, Republican allies, fought tooth and nail to keep regulation as lax as possible. They succeeded, but common sense failed. The result has been a very recent new revelation that super bank J.P. Morgan Chase has suffered an admitted two billion dollar loss, which might actually be four billion (do I hear five? Six?), from risky investments.*

One of the effects of the "Great Recession" has been on government budgets. As I noted above, in the U.S., at the federal, state and local levels (including schools), contractions in revenue,** and rising costs for certain things, have brought great budget squeezes. Federal stimulus money helped some communities keep layoffs to a minimum, especially of police and fire personnel, but the money was really a one time, short term shot in the arm. Once it was gone, major decisions had to be made to keep budgets in balance, and many a worker lost their job. Meanwhile, similar has been happening elsewhere in the world, in particular in Europe.

* Okay, anti-regulation people argue that you can't have freedom if you have regulation. "Freedom," however, is in the eye of the beholder. In the 2000s, the banks went wild and laid their very solvency on the line in all sorts of risky investments, much of it based on an overheating mortgage business. The resulting collapse in 2008 brought America and the world to an economic crisis not seen since the Great Depression. Quick action by many nations, including the U.S., even initially by the "free market" Bush administration, contained the damage, although the aftereffects are still with us. Banks are not just playing with their own money, they are playing with YOUR money, and with the nation's (and the world's) economic security. If you boarded a commercial airliner and the captain decided to start all sorts of risky maneuvers, I seriously doubt  you would say, "Oh that's okay, it's a free country, you can't tell the captain or the airlines how to fly their planes. Keep government regulation out of my air travel." Be careful in this election year when you hear politicians telling you they want to cut or eliminate regulation. You might just get on an airplane with a crazy captain.

** There has been a "double whammy," if you will, in that lower employment and business activity have naturally curtailed tax revenue, but also tax cuts, enacted at the national level and also at many state levels to promote growth, have taken a bite out of income. Less spending has meant less revenue from sales taxes. The dramatic decline in home prices has meant less money from property taxes.  

WORD HISTORY:
Budget-This word goes back to Indo European "bhelgh," which had the notion of "swell, inflate, bulge." This spawned a number of forms in Indo European's offspring, including Celtic, which had "bulgos/bolgos," meaning "stomach, bag," and this gave Gaulish "bulga(s)," with the same meanings. This then was borrowed into Latin as "bulga," which meant "leather bag, pouch." A leather pouch was used to hold money. Old French, a Latin-based language, inherited the word as "bouge" (initially "boulge") also with the meaning "leather pouch/bag, often used for money." This later became "bougette," which meant "small pouch/bag." English borrowed the word from French initially as "bouget" in the early 1400s, and the word expanded in meaning beyond the actual pouch/bag, but also to its content. By the 1700s government finance people kept their financial plans in such a "pouch/bag," thus modern "budget." The verb form developed from the noun in the 1800s.

A Diversionary Crisis, Part Two

I remember Joe Scarborough of MSNBC's "Morning Joe," a former Republican congressman, saying that during George W. Bush's term in office, Republicans "spent money like drunken sailors." I'm sure he took some heat for that comment from both Republicans and drunken sailors. I like Joe Scarborough, and while I don't always agree with him, I respect him. Unlike some Republicans, he doesn't suffer from the "George W. who?" question, as some GOP members do, in an effort to distance themselves from the Bush presidency, and from the responsibility for some, not all, of the problems we are now facing. Democrats also have their fingers in part of the run up to the collapse in 2008, just not quite as much.

Shortly after Barack Obama took office, Republican members of Congress, much diminished in numbers by the results of the previous two elections, were able, with the help of President Obama, to turn one of their negatives, "debt," into one of their selling points. The President's push for health care, while admirable, but also inadequate in several ways, gave Republicans a chance for a comeback,** and they took the ball and ran with it. The President's poll numbers tumbled; likewise for Democrats in Congress. The GOP began to emphasize "debt," and while the Congressional Budget Office* said the new health care law would not add debt, but even possibly reduce government debt, the public remained skeptical. After being pilloried for "spending like drunken sailors," Republicans decided to regain the issue of fighting government debt. The "Tea Party" movement, largely centered in the GOP, held rallies around the country with supporters waving tea bags and carrying signs denouncing Obama and Democrats as spendthrifts, as well as some...ah... other names. The Republicans made headway in turning the debt issue back in their favor, and some Americans seemed to suffer from collective amnesia about the "Republicans spending like drunken sailors." Incredibly the Republicans were able to sort of hit the "reset" button, and the tremendous government debt was laid at the feet of President Obama, in spite of the previous eight years of Republican rule, with two wars unpaid for, homeland security unpaid for, tax cuts (largely favoring the very rich) unpaid for, and a Medicare prescription drug benefit unpaid for. Lost in all of this, both Obama's health care reform and the GOP's debt targeting, was the economy and JOBS! I don't know of a reputable economist who doesn't essentially say, "You can't cut the debt big time, until people have jobs and the economy is back on firmer footing." With unemployment hovering around 9% for quite some time, jobless people collect benefits, and they are not paying taxes. It's a double whammy!

* Interestingly, one of the things Republicans "claimed" they didn't like in the Democrats' health care reform, the insurance exchange, they now champion in Paul Ryan's Medicare proposal. On the other hand, Democrats liked the idea when they proposed it, but now scoff at Ryan's use of it. You don't think.....nah....politics has something to do with this, do you? Nah, couldn't be.

** The Congressional Budget Office, also known by its initials "CBO," is a non-partisan office that crunches and analyses numbers for Congress.

WORD HISTORY:
Control-This is another compound word, so I will deal each part separately. "Cont" traces back to Indo European "kom/ghem," which had the idea of "beside, near, together." This then gave Indo European "kom-tr(a)," with the notion of "together" being expanded to mean, "opposite;" that is, if you and I are standing together, we are opposite of one another. This gave Latin "contra," but now more with the meaning "opposite one another, as in opponents; against, a counter to something else," as in, "The defense "countered" the other team's quarterback by rushing him." The "rol" part traces back to Indo European "ret(h)," which meant "run, roll." A variant form, "rot-a," with a long "o" sound, gave Latin "rota," with the meaning "wheel." This then gave Latin "rotula" and then "rotulus," meaning "small wheel." "Contra" and "rotulus" were then combined into "contrarotulus," which was a small wheel used to check one account against another in times long ago, as it had duplicate account information on it to "counter, check, verify" the other set of information by simply rotating the wheel (yes, "rotate" is from "rota"), rather than having to look back and forth over other methods of record keeping, like parchment. Old French inherited a form of the word from Latin as "contrerole." The Norman dialect of French took the term as "contreroller" to England where it was borrowed into English in the late 1200s or early 1300s as "conterolle," and a verb form "controllen," meaning "to validate, to verify, to check for authenticity, to regulate." The development of the further meaning "have power over" is easy to understand. German too borrowed the word, as "kontrollieren," with essentially the same meaning, but perhaps with more emphasis on the "to check, to evaluate," meaning. German also has a form of "rota," which is "Rad," which means "wheel," and some sources say it came from a Germanic source tracing back to Indo European, others say it was borrowed form Latin, and still others leave the ultimate origin as unknown. I'm inclined to believe German got the word from Latin, as it is not common in the other Germanic languages, including English, even more especially, Old English, a time when the vocabularies of the various Germanic dialects were much closer.