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Opinions/Editorials Title: The Ideological Crisis of Western Capitalism Just a few years ago, a powerful ideology – the belief in free and unfettered markets – brought the world to the brink of ruin. Even in its hey-day, from the early 1980’s until 2007, American-style deregulated capitalism brought greater material well-being only to the very richest in the richest country of the world. Indeed, over the course of this ideology’s 30-year ascendance, most Americans saw their incomes decline or stagnate year after year. Moreover, output growth in the United States was not economically sustainable. With so much of US national income going to so few, growth could continue only through consumption financed by a mounting pile of debt. I was among those who hoped that, somehow, the financial crisis would teach Americans (and others) a lesson about the need for greater equality, stronger regulation, and a better balance between the market and government. Alas, that has not been the case. On the contrary, a resurgence of right-wing economics, driven, as always, by ideology and special interests, once again threatens the global economy – or at least the economies of Europe and America, where these ideas continue to flourish. In the US, this right-wing resurgence, whose adherents evidently seek to repeal the basic laws of math and economics, is threatening to force a default on the national debt. If Congress mandates expenditures that exceed revenues, there will be a deficit, and that deficit has to be financed. Rather than carefully balancing the benefits of each government expenditure program with the costs of raising taxes to finance those benefits, the right seeks to use a sledgehammer – not allowing the national debt to increase forces expenditures to be limited to taxes. This leaves open the question of which expenditures get priority – and if expenditures to pay interest on the national debt do not, a default is inevitable. Moreover, to cut back expenditures now, in the midst of an ongoing crisis brought on by free-market ideology, would inevitably simply prolong the downturn. A decade ago, in the midst of an economic boom, the US faced a surplus so large that it threatened to eliminate the national debt. Unaffordable tax cuts and wars, a major recession, and soaring health-care costs – fueled in part by the commitment of George W. Bush’s administration to giving drug companies free rein in setting prices, even with government money at stake – quickly transformed a huge surplus into record peacetime deficits. The remedies to the US deficit follow immediately from this diagnosis: put America back to work by stimulating the economy; end the mindless wars; rein in military and drug costs; and raise taxes, at least on the very rich. But the right will have none of this, and instead is pushing for even more tax cuts for corporations and the wealthy, together with expenditure cuts in investments and social protection that put the future of the US economy in peril and that shred what remains of the social contract. Meanwhile, the US financial sector has been lobbying hard to free itself of regulations, so that it can return to its previous, disastrously carefree, ways. Help fight ignorance. Click here for daily Truthout email updates. But matters are little better in Europe. As Greece and others face crises, the medicine du jour is simply timeworn austerity packages and privatization, which will merely leave the countries that embrace them poorer and more vulnerable. This medicine failed in East Asia, Latin America, and elsewhere, and it will fail in Europe this time around, too. Indeed, it has already failed in Ireland, Latvia, and Greece. There is an alternative: an economic-growth strategy supported by the European Union and the International Monetary Fund. Growth would restore confidence that Greece could repay its debts, causing interest rates to fall and leaving more fiscal room for further growth-enhancing investments. Growth itself increases tax revenues and reduces the need for social expenditures, such as unemployment benefits. And the confidence that this engenders leads to still further growth. Regrettably, the financial markets and right-wing economists have gotten the problem exactly backwards: they believe that austerity produces confidence, and that confidence will produce growth. But austerity undermines growth, worsening the government’s fiscal position, or at least yielding less improvement than austerity’s advocates promise. On both counts, confidence is undermined, and a downward spiral is set in motion. Do we really need another costly experiment with ideas that have failed repeatedly? We shouldn’t, but increasingly it appears that we will have to endure another one nonetheless. A failure of either Europe or the US to return to robust growth would be bad for the global economy. A failure in both would be disastrous – even if the major emerging-market countries have attained self-sustaining growth. Unfortunately, unless wiser heads prevail, that is the way the world is heading.
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#6. To: Brian S (#0)
Monday, July 11, 2011 The Moneysburg Address Remarks rumored to have been delivered by Justice Antonin Scalia at an Opus Dei gathering on July 4, 2011 Eleven score and fifteen years ago our Incorporators brought forth on this continent, a new nation, conceived in free markets, and dedicated to the proposition that all corporate persons are created equal. Now we are engaged in a great financial and legal crisis, testing whether those markets, or any markets so conceived and so dedicated, can long remain totally free. We are met on an inflated balance sheet of that crisis. We have come to extend a mighty portion of assets, as a book value preserving holding place for corporate persons who finessed enormous fortunes through beggaring men and women so that those corporate persons might prosper. It is altogether fitting and proper that we, the free market acolytes of corporate persons, should do this. But, in a larger sense, we cannot hypothecate — we cannot market rate — we cannot estimate – these assets. The financially engineered persons, living free on the indebtedness and taxes of men and women, are the true heroes who innovated here. They have hypothecated and traded these derivatives far beyond our poor imaginations to do more than extend and pretend. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us their nominal trustees, rather, to be dedicated to the unfinished work that they who morally hazarded and secreted away so much have thus far so nobly advanced. It is for us to be here dedicated to the great task remaining — that from these free and mighty and untaxed persons we take increased devotion to that cause for which every day they insist on the last full measure of Constitutional personhood — that we here highly resolve that these legal persons shall not have incorporated in multiple jurisdictions in vain — that our free markets, under Mammon, shall have a new birth of corporate freedoms — and that government of the persons, by the persons, for the persons shall not perish from the earth. 8D8D8D 8>D
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