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August 17, 2013


It finally occurred to me why (for the most part) Europe’s hoi polloi are neither unhappy nor restive. It is because we transplanted New Deal/Fair Deal ideas there after the devastation of WW II and the Europeans took them and ran with them – while we regressed back into the Hooverism of laissez faire/loose regulation and handed America and its resources back to the rich and corporate class. Exceptions are – so far – Social Security and Medicare, which we managed to maintain or initiate through the Wall Street gauntlet of that postwar window of opportunity – and which Wall Street is working on dismembering – aka privatizing – at present. We are in an austerity era of Hoover-plus, and if we effectively lose Social Security and Medicare to financial sector greed mongers, we will have descended back into pure Hooverdom. Fortunately, there is no lower category than that; it’s the bottom of the barrel.

While pursuing a degree in economics after WW II, I took a course called “Government Regulation of Business.” If the curricula designers are honest, I suppose the title of that course would now read “Business Regulation of Government,” a much more fitting title in this day and age. The course I took was in the late 1940s, when New Deal and Fair Deal policies of Roosevelt and Truman, respectively, were in vogue. Nobody in those days dreamed of handing business an unregulated milieu in which to operate. We had tried that with Republicans recently in the 1920s and wound up with a hair-raising Great Depression. Wall Street then as now had gone wild, and without regulation at the time, the world’s markets collapsed. It was a tough time to be alive, but I survived, and after the war there was unprecedented prosperity, one in which new wealth brought about by increased productivity was shared across the board.  Increased economic activity of that time can be attributed to pent-up demand from the war, but the idea of sharing such new wealth can be traced directly to New Deal and Fair Deal policies of Roosevelt and Truman. It was a good time to be alive. We were on the move under both Democratic and Republican presidents. Moms could stay home. One paycheck was enough.

War-devastated Europe was recovering at the same time, and their postwar politicians looked across the Atlantic at our system and copied it. Europe became, with some fits and starts, and unevenly, a social democracy. They fleshed out our New Deal/Fair Deal system (which we did not, as it turns out) and are enjoying the fruits of such adoption to this day, while we faltered (circa 1974) and headed back to the system that gave us the Great Depression. Evidence of that can be found in the Great Recession just recently ended (or so we are told) when Wall Street went on another exercise in greed (one in which we also participated – if you can call a bailout “participation”). Wall Street and its congressional captives have also decided not to invest in peoples’ job training, their health, their education and the shaky bridges they traverse en route to food stamp and unemployment offices. Republicans mistakenly call such investments “spending.”

Yes, Europe has its Greek, Spanish, Irish, Portuguese and other economic problems these days, and their populaces are in the streets, but that is a common currency and mismanagement problem and not a result of adoption of New and Fair Deal policies of last century. The German and Swedish models are fairer descriptions of what happens when you adopt social models (designed to spread productivity gains) based on the American postwar models and DO NOT mismanage your economy. Both are prosperous and competitive in the global marketplace WITHOUT sending their jobs overseas and refusing to apply tariffs to imports, and both have at the same time passed laws guaranteeing vacation time, single-payer health care, limitations on executive compensation (including bonuses) etc. Here we are handed right to work laws and decreasing family median wages over years on end while corporate executives and hedge fund operators send their billions to Switzerland (or invest in Greek junk bonds).Welcome to Hooverland!

The foregoing is plain evidence that Europeans are prosperous because they share and evidence that we are not because we do not share and, of course, without money in our pockets, would-be consumers in this country are starving the demand factor, thus increasing ancillary unemployment. The final economic insult is that such weakened demand as we do have is spent to a considerable degree on foreign-made goods, thus enhancing yet further unemployment here and further weakening aggregate demand in our economy as the downward spiral of austerity economics continues to take its toll in our race to the bottom.

Wall Street tells us we cannot apply Keynesian strategies to resurrect our economy because that would involve borrowing money; this from a Wall Street that lives on margins and hedge fund operators and other vulture capitalists who use virtually all leveraged funds (borrowings) in swooping in on hapless corporations for their asset-stripping activities. Interest paid on borrowed money (leveraged funds) for such activities is, of course, deductible to the vultures, which means that you and I have to make up for what they are not paying, and to that extent you and I are subsidizing hedge fund operations.

After stripping the assets of target corporations with borrowed money, deducting the interest on such borrowings so that you and I are effectively paying for a portion of such interest, and walking away with (often) huge commissions, fees, current earnings etc., guess what? They get a break on such earnings which they have had their friendly congress people write in to the code. They pay under a definition of so-called “carried interest,” a capital gains rate you and I are denied on our wages, which amounts to an additional subsidy you and I pay to make up for their net enrichment. Collectively, the tax breaks and otherwise loose regulations amount to what I would call “a license to steal,” or, as Greenspan once quipped – that such conduct amounted to “irrational exuberance.”

Wall Street has one set of rules for Wall Street and (through their friends in Congress) another set for you and me. Whatever happened to the progressive tax rule that the more you make the more you pay? How did we ever move from that rule to the new rule, i.e., the more you make the LESS you pay. I suppose such a transition followed the path of my old class of Government Regulation of Business to Business Regulation of Government, and here all these years I thought government was in charge of government – my mistake. Wall Street is in charge of government; pretenses to the contrary are window dressing. Incessant lobbying, political bullying, Wall Street-funded “think tanks” and campaign contributions buy lots of influence among Republicans – and with some Democrats on board as well – as we the people pick up the tab for congressional redistribution of the wealth.

So what are we going to do about it, anything? Are we going to leave our (or is it their) tax code, predatory lending, monopoly pricing, banking regulations, reserve requirements, labor laws, pure food and drugs laws, patent laws and even national security etc. to the tender mercies of Wall Street and its corporate subdivisions? If so, as seems apparent, then who needs Congress as cover for this charade, and with their current record, why don’t they just make their current congressional recess permanent and leave out this middleman process? They can just stay home. We’ll call New York to find out what our laws, rules and regulations are, are going to be, and which ones are suspended and repealed. 1984  (aka corporate ownership of America) can come in stages. On a scale of one to ten, I would say we are at nine (or maybe we are already at ten and I haven’t recognized it).

Democracy? What’s that? “Of the people, by the people and for the people?” Get real, Mr. Lincoln. We now live in a “for profit” world. None others need apply.  GERALD  E


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One Comment
  1. Dee permalink

    This is right on the mark; people need to wake up!

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