This week, a prominent Republican and former Bush Administration appointee came out swinging against current Republican attitudes towards income inequality and the absence of legitimate domestic spending on infrastructure. Sheila Bair, the former head of the FDIC under President Bush, said in an interview this week, that she believes that the current intransigence over federal spending, even on badly needed, job creating endeavors such as repairing America’s crumbling infrastructure, is largely to blame not only for the severely hampered economic recovery, but also as a central contributing factor to income inequality and the continued struggles of the lower and working class.
[box type=”shadow”]”Infrastructure spending’s number one. I think we’ve squandered cheap financing rates for five years … We haven’t spent the money,”[/box]
Beyond blasting the debt/deficit hysteria which has led to blanket austerity and an effective crippling of our national asset management, Bair went on to sharply criticize current Federal Reserve policies regarding the practice known as “quantitative easing” (QE,)in which the Fed purchases purchases bonds from private US banks, so as to theoretically pump money into the still reeling banking and finance system. Though through the Fed’s QE approach, the banking system has stabilized slightly, little to none of the economic stimulus, designed to encourage top end private investment therefore stimulating and benefiting the lower tiers of the economy, has yet to materialize in any tangible way.
Uncommon if ever to hear such uttered from Republican lips, Bair even directly tackles the income inequality ratios which exist between the haves and have-nots, ripping into the ongoing Fed policy and Congressional inaction, as being little more than a top level handout to America’s wealthiest citizens and corporations,
[box type=”shadow”]”I do think it’s made income inequality a lot worse. It’s inflated financial assets. I mean, they say that’s the purpose, right, to get this wealth effect? But what is it? The top 10 percent of the population owns 80 percent of the stock. We need fiscal policy. And I know the Fed says, ‘Well, Congress isn’t going to do anything, so we need to do this.’ But I think what they’re doing at this point just continues to skew wealth towards the very wealthy. We need Congress, we need fiscal leadership.”[/box]
Bair’s comments come just on the heels of outgoing Fed chair Ben Bernanke’s final speech about the economy and the role of the Federal Reserve, where he too directly attributed the hindrance of economic recovery to a lack of domestic spending.
Since coming into office, nearly every economic stimulus effort made by the Obama Administration has found intractable opposition from Republican governors and legislators at both the state and federal level. Prior to his union busting campaign in 2011, Wisconsin Governor Scott Walker became the focal point of considerable criticism for his refusal of infrastructure stimulus funds designated for light rail construction, which itself was estimated to create between five and ten thousand jobs as it worked to connect Milwaukee with the capitol Madison. Similar stimulus and public sector spending fights between the Obama White House and Republican Governors erupted throughout the nation, leaving many of the country’s bridges, roads and highways in desperate need of repairs and upkeep as the austerity craze continued sweeping throughout GOP loyalists nationwide.
Bair’s statements, which fly in the face of most modern right-wing talking points about economics and federal spending, have also come as what remains of the conservative factional coalition that is the GOP, continues its often bombastic infighting, with what is being characterized as a “civil war” having erupted between establishment Republicans and their more extremist counterparts in the Tea Party over very many of the same issues in regards to spending and investment.