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I am your host, Josh Sager--a progressive activist, political writer and occupier--and I welcome you to SarcasticLiberal.blogspot.com

Monday, August 6, 2012

Debunking the Term: “Economic Uncertainty” --- Part 2: Reversing the "Uncertainty" Narrative

Step 2: Reversing the “Uncertainty” Narrative
After debunking the conservative arguments surrounding uncertainty, people will naturally ask about the true causes of uncertainty. In order to fill the rhetorical void which was created when the conservative uncertainty argument was debunked, Progressives and Democrats must point out the true causes of crippling economic uncertainty: Warmongering, economic collapses, hostage-taking politics, a lack of banking/financial regulations, and several other destabilizing situations which are often caused by conservative policies.

War is a leading cause of economic uncertainty, particularly when the conflict happens in a country with significant energy resources. Countries which are engage in violent civil unrest or inter-national conflict often suffer uncertainty due to potential damage to factories, shops, or the transportation infrastructure, as well as a general decrease in the economic welfare of the local population. If producers are unable to ensure that their factories are secure and that their goods will safely reach their customers, a large amount of uncertainty is created (ex. Somalia doesn’t have a good atmosphere for economic investment). While conflicts are usually localized to a country, thus the uncertainty created by war is usually limited, violent conflicts within energy producing countries can have wide-reaching economic consequences.

When conflict creates uncertainty in an energy producing country, the production of coal or oil is disrupted and the disruption ripples into the global economy. Every country requires energy to function, much of which is currently derived from fossil fuels, and a disruption of the supply of such fuels makes all production more expensive.

Conservatives, particularly neo-conservatives, have a record of promoting increased aggression abroad—the Iraq and Afghanistan wars are two examples of such conflicts. The promotion of war, particularly in the Middle East (a common target for modern conservative aggression), increases the global uncertainty over oil process and has increased the price of gas in the world market.

A lack of proper economic/banking regulations has been shown to increase uncertainty when the lack of regulations causes excessive gambling, financial fraud, or even economic collapses. Without proper regulations, investors cannot be certain that they are buying a quality good, thus they are less likely to invest (uncertainty). Even if investment is sustained, fraud and financial gambling destabilize the economic system and can even cause an economic crash. An economic crash creates huge amounts of uncertainty because it makes people fear for their jobs, stifles investment, depresses market demand, and makes it more difficult to predict the future health of the economy. The ultimate modern example of how a lack of regulations can dramatically increase uncertainty is the 2008 economic crisis: Inadequate regulations on banks, a fusion of commercial and investment banks (caused by the repeal of Glass-Steagall) and culture of banking fraud, combined to cause the 2008 economic crisis which nearly destroyed the world economy—destruction which devastated the American economy and has placed Europe on the brink of economic catastrophe.

American conservatives support the widespread diminishing of regulations, if not the complete abolition of regulatory powers held by the government. As we saw in 2008, this stance creates the circumstances which lead to widespread economic uncertainty and damage to the economy. Progressives need to draw the direct link between conservative deregulation and the economic crises which so dramatically increase economic uncertainty.

Modern American conservatives have utilized the tactic of political hostage-taking in order to push their agenda while in the minority. On numerous occasions—such as the debt ceiling fights, Bush Tax cuts re-authorization fight, and the 2011/12 budget fights—the conservative Republicans have refused to deal in good faith and have virtually held the good of the country hostage. By refusing to deal and steering the country towards a figurative cliff, the Republicans have forced Democrats to capitulate to conservative demands. While effective as a negotiating tactic, the use of political hostage-taking dramatically increases economic uncertainty and damages the country’s wellbeing.

When the public cannot be certain that the United States has a functioning government and will honor its debts, economic uncertainty is dramatically increased. The United States government is a tremendous force in the American and world economies, thus any dysfunction in American governance has the potential to translate into the economic market. During times of government conflict, government contracts to corporations, payments to government workers and the continuation of government services (ex. the TSA or postal services) are threatened; if government workers cannot be certain that they will be paid and government contractors face the potential that their services will be abruptly cancelled, uncertainty is dramatically increased.

Progressives must reverse the conservative “uncertainty” narrative and attach the stigma of uncertainty to the results of conservative policy. It is undeniable that conservative deregulation, warmongering and hostage-taking tactics increase economic uncertainty, but the general public has yet to understand this. Through the use of simple and understandable arguments, progressives must explain how it is not progressive policies which increase uncertainty but rather conservative ones.

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