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August 28, 2016

CAPITALISM IN CRISIS

Historically, we in America have in the final analysis chosen pragmatism over ideology, as noted by Robert Reich in his 2015 book, Saving Capitalism. We are called upon to save capitalism once again as the capitalists do not seem to be interested in saving the very system that has made them rich beyond belief (though at the expense of the rest of us for some four decades with their monopoly pricing, our stagnant wages and the institution of other political and economic barriers to middle class status).

Unlike elsewhere, when capitalism is in crisis here, we Americans have recognized its problems and have gone about the messy job of solving them and saving the system. We have not opted for communism or fascism or any other grand scheme as other countries have; we have commendably and successfully worked to correct current abuses within the system.

It is clear that we must do so again since Americans now rightly believe the system is rigged; they now know (in spite of corporate propaganda) that all those of us who do not number among the privileged few are victims of chronically poor demand due to inadequate purchasing power and economic insecurity, and they are beginning to understand the enormous damage done to our economy as a result. In such connection, Reich points out that “When capitalism ceases to deliver economic gains to the majority it eventually stops delivering them at all – even to a wealthy minority at the top. It is unfortunate that few of those at the top have yet to come to understand this fundamental truth.”

He is right. As I have often blogged, when the rich hijack wages and enhanced labor productivity of its workers in the name of “shareholder value” (return on capital) and doesn’t fairly share the economy’s income with their workers, then workers as consumers can’t buy the goods and services provided by investments of the rich with the result that the rich (though temporarily awash in paper profits) lose out on their investments as well in time. We are thus all losers.

Monopoly pricing with its stratospheric profits in the pharmaceutical industry which draws investment like a moth to flame, for example, has made some compounds so expensive that those who need them are literally faced with death as the alternative. It is plain to me that we must regulate such pricing unless we agree that big profits are more important than life itself, a proposition to which I do not now and never will subscribe under any system.

Some of such uncorrected abuses have led to recession and depression and the current abuses practiced by the rich and corporate class in its purchase of our political process have led us to an underperforming economy, unnecessary unemployment, enormous trade deficits, chronic wage inequality etc., to an economic system where the rich become yet richer and the poor yet poorer. While some say that it has always been that way, and while Piketty with his massive research has shown centuries of proof to such effect leading to his celebrated but dour r > g formula to describe the historical process, there have been periods in history where “it was not that way,” notably the some 40 years during and following WW II and the Great Depression when there was no wage inequality, when the economy boomed, when the interstate highway system was built, when corporate America was fairly taxed and regulated in the public interest and millions were added to the middle class.

Thus Piketty’s findings are not writ in stone for the future nor is the myth that the rich get richer and the poor get poorer an absolute certainty. We are where we are as a matter of political choice, not economic choice, and we can choose to bring back the political conditions that can bring back the halcyon days we enjoyed for those some forty years of broadly-based prosperity of those postwar years if we can garner the political will to do so.

However, we cannot return or even have an opportunity to return to such an economic nirvana with the rich and corporate class in charge of the political process, as now fortified by inane judicial holdings such as Citizens United and McCutcheon which, among other things, made corporations persons entitled to participate fully in elections via financial contributions and the elimination of caps on the amount individuals can contribute to federal candidates and political parties. If there was ever an invitation for further takeover of America and its institutions by the libertarian Kochs, paper shufflers and others short of judicial cancellation of elections, I cannot imagine it. These holdings, it is perhaps noteworthy, were supported by a majority of the court’s members, all Republicans, and we pretend to be surprised by erosion of public trust? Why? Isn’t it obvious? The game is in fact rigged, and becoming even more so as political contributions plainly trump the public interest.

The fate of capitalism is bound up in the political choices we make which lead to a sound economic system that works for everybody, and we who are not members of the rich and corporate class are again (as we were during the Great Depression) called upon to rescue capitalism from the greed and avarice of the capitalists themselves. It worked then and can work now with an enlightened electorate. I urge all who read this to go to the polls and vote for a system of managed capitalism that works for all of us, including the capitalists as well as for every American. We are headed for the rocks with our present political trajectory, but it is not too late to rescue a system that, properly managed, can work for the benefit of all, so let’s do it. Vote!      GERALD      E

 

 

 

 

 

 

 

 

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