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ECONOMIC HISTORY IN THE MAKING

August 22, 2017

ECONOMIC HISTORY IN THE MAKING

Those who research economic history know full well the ups and downs of our capitalistic system. We know that the downturns started early, during our first president’s tenure. We are also acquainted with the panics and downturns of the 19th century, especially the Panic of 1873, and of course, the biggest downturn in the 20th century or ever, The Great Depression of the 1930s, the biggest failure of capitalism to date. Bush’s Great Recession was 22the second biggest downturn we have had, marked by  fraud in banking and corporate circles, bailouts, millions of mortgage foreclosures, millions of newly unemployed, a Dow gone south and trillions of dollars of economic production lost – forever. These results, including an unnecessary war in Iraq, are the legacy of the Bush-Cheney administration, a legacy for which, in my opinion, they should have been impeached and imprisoned.

The financial sector recklessly shot craps with the nation’s economy, including with FDIC-insured and leveraged funds – and came up with snake eyes. Luckily, the politicians bailed everyone out except those who lost their homes and jobs, a clear choice of winners and losers by politicians as those who caused the damage were awarded help and those who were innocent of wrongdoing were left to their own devices, devices such as living under bridges and taking bankruptcy, and sometimes both.

With this background and given the same or similar set of politicians in control today, let’s look at a few of the proposals being offered by Republicans to those of us who were not bailed out, not had our mortgages cancelled for fraud by the big banks and in general were  victimized by Bush’s Great Recession. First we must recognize that market forces are now and have almost always been inefficient and subject to corporate power plays, as evidenced with the ups and downs of our economy since we became a nation. We euphemistically call such downturns “business cycles,” as though such downturns are normal and to be expected. They are not normal; they are the results of bad or no policy decisions.

The only sustained period of undisturbed economic equilibrium we enjoyed was the some forty years following FDR’s embrace of Keynesianism with its regulatory focus and public capital at the ready, a system that had it been in place with an intact Glass-Steagall Act would have made Bush’s Great Recession and the horrors of its aftermath impossible.

So what, for instance, are Republicans offering today to the rest of us?  Let’s take education, a very important investment in America, its people, their competitiveness, their futures. How do we respond to their continuing attempts to privatize education through school vouchers and charter schools? We, as the economist Hahnel suggests, should work hard to keep education within the purview of democratic decision making and not abandon it to the ravishes of the marketplace.

So how about Social Security? We must again work hard to keep this system a public system and not abandon old-age insurance to the vagaries of financial markets, which is what creating individual accounts to be managed by mutual funds and brokerage houses amount to.

So how about universal health coverage? Can’t be done? Have to have insurance companies lead us by the hand? Rubbish! The developed world has better coverage than we do at about half the cost, and we should be fighting for such a program instead of trying to reform a private medical insurance industry that is incapable of providing universal coverage at minimum cost.

So what about tax and credit priorities? Are those decisions, like education, social security and healthcare, to be left in the hands of Wall Street to decide what best serves their interests rather than for the common good? Who elected Wall Street? These and other public programs should be matters for the people and not the market to decide, because frequently the objectives of the peoples’ interest and that of Wall Street do not coincide. Thus the enemy in these fights per Hahnel is not only the corporations who benefit while critical public needs go ignored, but also the rule of the market, which must be curbed, tamed and brought to bay, a “market” that has failed us more than once.

Public education, Social Security and healthcare are or should be public systems. We do not need Wall Street to run such systems and extract their pound of flesh from such endeavors (including securitization of such activities they can buy and sell on debt and equity markets).

Why give up democratic governance over public systems to the greed and avarice of unelected moneychangers, and how would the financial sector like it if “Big Government” moved into their now exclusive control of “the market?” Perhaps we should look to publicizing private endeavors where a clearly defined public interest is at stake, and why not? What’s sauce for the goose is sauce for the gander and I see no public interest that is being served by Wall Street’s invasion into public education, Social Security and healthcare other than for the purpose of, as usual, making money for the few at great cost to the rest of us. I vote nay.        GERALD           E

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