I think we have the deregulatory philosophies and policies of the so-called free market capitalists, mostly of the Republican Party and their latest incarnation of a high-priest, Alan Greenspan, to thank for much of our economic problems. Even he seems to now be acknowledging this (http://www.npr.org/templates/story/story.php?storyId=96070766). It's not all his fault, to be sure.
The rest of this somewhat lengthy post (from an email thread with friends dated January 24, 2008) attempts to make the point that our troubles are rooted squarely in the social, fiscal, and political ideology of the neo-conservative elements of the Republican Party.
(Now excuse me whilst I climb on top of my soapbox!)
Let's start with the concepts of "free markets" and "capitalism". In my mind, "free market" does not and should not mean a "free for all". Maybe there never was a time when true free marketers understood that they were nothing without a market. Maybe true capitalists could never reasonably be expected to understand that their primary goal and very survival depends on the needs of their markets and how best to grow those markets for the benefit of everyone's long term prosperity and stability. Maybe there was never any hope that they could, would, and should accept the logic and reason for legislation, regulation and oversight as the very best means for keeping out those who would manipulate, cheat, and ultimately destroy those very same markets for their own personal gain.
Maybe it's time for those who like to call themselves capitalists and free marketers to realize the danger in listening to the Ken Lays, Jeff Skillings, Andy Fastows, Bernie Ebberses, and, yes, Alan Greenspans, Dick Cheneys, and the Bush-type royalty of the world who would have us believe...
....creative accounting like mark-to-market, derivatives, and the like are real things on which to base an economy
....the fantasy and fallacy of the Ayn Rand-followers who trust in the benevolence of an untaxed, uncontrolled, and unregulated wealthy to have everyone's best interests at heart
....that not getting caught is the same thing as not doing anything wrong, and that
....no one - especially government - should be poking their civil service noses into business
As Americans, we especially like that last one. When it comes to the authority to regulate commerce, we forget that Article I, Section 8 of the Constitution specifically gives Congress the power and, hence, the responsibility to do just that. Could be the good ol' Founding Fathers knew enough about human nature even way back then to know that, generally speaking, people and business needed regulation if they were to perform for the common good and not just their own self interest. (Common good, by the way, is a great way to think about a free and open society. Keep that in mind.)
Isn't it time to finally wake up to the fact that "trickle down" is just another way of saying "pissed on" by the powerful and wealthy elite in business and government? Isn't it time to admit that "trickle down" is actually a good description of what happens to people everywhere except at the top - we get a trickle of what government "gives" to those at the top in the form of deregulation or tax cuts? Isn't it time we recognize that there is but one political party where big business, ultra-wealthy, and neo-conservative social and political dogma come to their full realization...all at the expense of the rest of the common good?
As I see it, big business and government are one and the same inside the Republican party. R's talk a good game about being inclusive, being for less government in our lives, being for less government spending so as to avoid bad things like increasing deficits, and being about protecting American families and family values. Well, from my perspective, they've done exactly the opposite beginning with Reagan and finding their full throat especially over the last 8 years. Again, just my opinion.
The following excerpt from an article by author Larry Beinhart summed it up pretty well for me (http://www.alternet.org/workplace/98913/a_crash_course_in_economic_crashes/?page=entire)
"The core, the very heart of Bushonomics, is cutting taxes, especially for the wealthy. ...the tax cuts were sold as economic stimulus and jobs packages with the promise that they would not create deficits. This last was based on a romantic Ayn Rand vision of millionaires racing into the backwoods to build, build, build new businesses that would create jobs, "good jobs," and new taxes would be paid by the businesses and the workers, making up for the initial deficits.
Alas, none of that ever happened.
Deficits were created."
More good reading by Beinhart on Bushenomics (I like that term!) can be found here (http://www.larrybeinhart.com/articles/node/12) and at his web site.
I also think that the AFL-CIO's executive council statement from March of last year is worth reading (http://www.aflcio.org/aboutus/thisistheaflcio/ecouncil/ec03052008a.cfm).
It opens with...
"The implosion of the housing market and the cascading crises in the credit markets are the direct consequence of a 30-year experiment of trying to create a deregulated, low wage economy where high consumer spending is propped up by easy credit and asset bubbles. Real solutions must be based on restoring the economic health of the American middle class through good jobs, health care, retirement security and a voice at work for all. And an important part of the solution must be the thoughtful, comprehensive re-regulation of the financial markets."
Don't get me wrong, I'm working my ass off trying to build as much personal wealth as I can just like everyone else. I don't expect or want government at any level to provide - or limit - my potential or opportunities. The reality as I see it, however, is that the old adage about the corrupting influence of power is all too true and very much alive in the backrooms and corner offices of so-called capitalists and free marketers who, it seems to me, are found far more often in the Republican Party.
Capitalism and free markets are honorable ideas, too be sure. It's a shame that they have been usurped and corrupted by what I see as a twisted ideology based upon greed and exclusion now found almost exclusively in neo-con Republican dogma, and which manifests itself as so-called pro-business policy and legislation that, in the end, is anything but helpful to the advancement of markets and the people who make up those markets. Us.
The very idea that business people - especially those people in financial markets who wield such great power and influence and whose decisions affect so much of our lives - need not be regulated is not only silly and naive, it's dangerous and serves only to breed more and more corruption. Left unchecked and unregulated, positions of that much power are destined to be filled with people from ever smaller circles of influence who care less and less for anyone except themselves and their exclusive circle. They will gladly sacrifice entire markets and economies - the very goose that lays their golden eggs - in order to amass as much personal wealth as possible and as fast as possible.
According to a 2007 research paper published by The Levy Economics Institute of Bard College (http://www.levy.org/pubs/wp_502.pdf), in 2004, the latest year for which federal data was available at the time, the top 1% of American households held just over 42% of nonhome wealth "defined as net worth minus net equity in owner-occupied housing (the primary residence only)" (Wolff, p7). Think about that for a minute. Almost half of the nation's wealth is held by 1% of us.
What's even more interesting to me is this. Their wealth had risen by about 2% from 2001, the year W took office, to 2004. So it got me thinking. What was that wealth distribution like under other presidents and their parties?
Well, all that wealth held by the richest 1%....
...was 42.9% in 1983, 2 years after Reagan took office, and had jumped 4% to 46.9% by the time he left in 1989
...had dipped by 1.3% to 45.6% in 1992 during King George I's reign
...had bounced back up by 0.6% to 47.2% by 1995 during Clinton's first 2 years, but
...fell back to 39.7% - a whopping 7.5% drop - by the time Clinton left office in 2001
What does it prove? I don't know for sure, but I decided to dig deeper.
Republicans controlled the Senate but not the House in 1981, 1983 and 1985 during Reagan's 2 terms (http://uspolitics.about.com/od/usgovernment/l/bl_party_division_2.htm). The deregulation and tax cuts of Reaganomics were implemented in '81 (http://en.wikipedia.org/wiki/Ronald_Reagan). As we all know, such measures take time to manifest themselves. Given that reasoning, Reaganomics was presumably having significant positive affects for the wealthy by '89 when 47% of the nation's wealth was held by that wealthiest 1%.
On the other hand, Clinton's Omnibus Budget Reconciliation Act of 1993 passed that August without a single Republican vote in a Democratically-controlled Congress and:
1) cut taxes for 15 million low income families
2) made tax cuts available to 90% of small businesses
3) raised taxes on the wealthiest 1.2% of taxpayers and
4) mandated a balanced budget
When Clinton left office 8 years later, this country had a $559billion surplus. (Source: http://en.wikipedia.org/wiki/Bill_Clinton). If we assume the same timetables for Clinton as we did for Reagan, then the 7 to 8 year gaps from implementation to maximum realization are essentially the same.
All I know is that I was prospering and the economy seemed much healthier during Clinton's administration, especially towards the end, and before the wealthy right-wing's favorite Republican son bought his way into the White House and started his service in January, 2001.
So let's do the same math on W. In 2001, he whips us into a frenzy about the budget surplus being our money and returns it to us - well, not "us" but to the wealthy - and, lo and behold, 7 years later we're in the worst economic crisis since the Great Depression.
Truth, or circumstances that conveniently fit a theory? If you're still debating Darwin and favor creationism as part of school curriculum, then I can guess how you'll answer that! ;-)
(Don't get angry. I'm just be the snarky little liberal!)
Probably would be a good idea to make sure that The American Recovery and Reinvestment Bill of 2009 - and anything else that comes out of the White House or Congress during this presidency - is judged along the same kind of time tables, and not in weeks or months.
When it comes to capitalism and free markets, the answer is, "No, I'm not a communist, socialist, fascist, or any other -ist (except atheist!)." Capitalism is good and preferable to all the other -isms. And, no, I don't think Warren Buffet, Bill Gates, and every person of wealth is a criminal, nor do I think they should start writing us all checks under some government mandate that strives to "redistribute wealth". (That's code speak. More on that in a minute.)
I just think people need rules. Especially people of great power and wealth. They need to be governed and regulated by laws that, to quote a famous document, "...promote the general Welfare" instead of promoting the disturbing and ever-growing prosperity gap in this country. Government oversight and regulation of business is what helped this country - you, me, and the rest of the middle class (by some accounts, including those earning income as high as $250K (http://assets.opencrs.com/rpts/RS22627_20070320.pdf) - to rise up from beneath the boot heal of the wealthy elite. Without government oversight and regulation, we'd all still be living in company housing, working in dangerous conditions, and trying to buy goods and services - including food - that did not need to meet any quality or safety standards. Why should it be any different for financial markets?
What I firmly believe we need to be doing as citizens is electing leaders who are willing to stand up to the so-called capitalists and free marketers - and their party - who got us into this mess. We need to be willing to talk openly about our support for proper levels of taxation and regulation as the reasonable price for living in a free society based on democractic principles and not feudal ones in which a small ruling class controls all the wealth and power.
It means we need to recognize code-speak like "tax and spend liberals", "death tax", "big government" and the like for what it really is - a subterfuge perpetrated and perpetuated by an elite few from within a political party who has lost all sense of morality and social conscience, and has society's best interest nowhere in its sights.