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The following is an offbeat piece that has little to nothing to do with my usual posts about Trump and the intersection of economics and government and a lot to do with European politics over the ages. I awakened this morning thinking about the vicissitudes of history, its twists and turns and outcomes which though seemingly insignificant at the time become momentous. One of the interesting exercises in connecting historical events and other dots is to trace the history of shifting alliances between and among countries. Britain and France, for instance, were once bitter enemies for centuries and yet later were off and on again allies, as they are now.  Germany with its Kaiser and Nazis was once our bitter enemy but is now our ally. George Washington fought alongside the later-hated English Redcoats against the French in the French and Indian Wars of 1756-1763, the same French led by Count de Grasse who with his army and fleet only 18 years later greatly helped George Washington defeat  the English Cornwallis at Yorktown, which led to the Treaty of Paris in 1783 establishing America’s independence.

Where and when in history did these shifting alliances become tools for European kings and queens and politicians to flex their military muscle in their quests for territory to be  acquired by discovery, war, or for prestige, trade, and power, both colonial and domestic? After a bit of reading on the topic, I have concluded that American independence can be traced to an incident over 600 years earlier during the Middle Ages in Europe and that such incident, as usual, involved dispute among royalty of that day, just as it has on many occasions since, given that European royalty could only marry other bluebloods irrespective of citizenship which, incidentally, made its mark by giving us a German king of England once who could not speak English, among other such anomalies. After all, royal bluebloods were not elected; they were chosen by God which, parenthetically and per Roy Moore today (the Republican candidate for senator from Alabama), ends the story. Rule by consent of the governed? Never – only God’s vote counts.

But back to the incident (and courtesy of author Phil Mason in his book Napoleon’s Hemorrhoids) >  Eleanor of Aquitaine, Queen of France, divorced her husband (King Louis VII)  in 1152 and married the English king, Henry II, only six weeks later. Louis did not take this affront to his honor and dignity well, and probably not because of his ex-wife’s antics, but because under existing practice it required him to acknowledge Henry as Duke of Aquitaine which in turn gave the new Duke her ancestral lands across nearly a quarter of all France.

This divorce and resulting title to French land by an English king as Duke of Aquitaine led to three centuries of running conflict between England and France, including the Hundred Years’ War. Peace and stability were not reestablished until 1453, when the English were finally driven out of France except for Calais.

Such peace and stability were not for the ages, as the French and English were engaged in hostilities with one another after 1453 from Yorktown to Waterloo as well as with Spain, Holland and others from that time onward, but it was not about divorce and its political repercussions. With the new discoveries of da Gama and Columbus and Magellan it involved colonialism as England, France, Spain, Portugal, Italy and others (including a finally-unified Germany) attempted to colonize the rest of the world, including English colonialization of North America, and fighting one another for territorial rights in such colonized venues. Hence the so-called “French and Indian Wars” in which Washington fought for the English but only twenty years later became the general in charge of the American Revolution in a war against the English, speaking of personal shifting alliances.

So is there a connection between this some 1,000 year old royal divorce incident along with subsequent wars and general friction but with occasional alliances between England and France that culminated in the crucial help de Grasse gave Washington in Yorktown, without which Washington would probably have failed to win since it was the French fleet that prevented the escape of a bottled up Cornwallis and his Redcoats from that peninsula, the ending battle of the Revolution which finally achieved our independence?

I vote yes, though during the interim of shifting alliances due to trade wars, territorial expansion and colonialism which give pause in arriving at such a conclusion, everything in history has had its causal joinder somewhere in time and space, however directly or indirectly, and until persuaded otherwise, I will give Eleanor, who was without a blueblood husband for only six weeks, credit for setting the stage for our independence. Thank you, Eleanor.       GERALD        E





While watching a professional football game recently more to see who was standing up and who was kneeling than the brain-addling game itself, a rather long ad came up on the screen which featured audio to the effect that energy was what made the world go around and that without it humanity was destined to be a Third World society in a classic example of basic advertising and propaganda – first you scare ‘em and then you offer them relief if only they will buy your product or service or succumb to their view of reality, a recurring reprise of the old story of the hero armed with lance and sword who comes riding into the castle from the west on his white horse to save the day for its inhabitants by chasing the bad guys out into Sherwood Forest. Exxon-Mobil, as we will see and in my opinion, is not the hero but one of the bad guys in the castle in this real world play. (My apologies to Sir Walter Scott).

The ad also featured some ten or twelve Americans with their hard hats, Americans diverse in gender and race, who looked into the camera with honest and earnest conviction but said nothing. The ad’s sponsor was never mentioned during the course of the ad until the very end, when the screen flashed Exxon-Mobil. The ad (unsurprisingly) also never mentioned that there are alternatives to the fossil fuel energy base which are available and which can also make the world go around without destroying our air, land and water since, after all, why advertise for the competition, especially for a non-polluting one?

When I saw the sponsor a flood of memories both past and present immediately presented themselves to my neural network. I first remembered how an Exxon supertanker piloted by a drunken captain ran ashore in Prince William Sound (Alaska) and spewed out crude oil all over the place, killing wildlife and doing great damage to both the sports and commercial salmon fishery. (I write Exxon only because I think this incident occurred prior to their ill-fated monopolistic merger with Mobil.) I then decided to boycott that company’s products and have done so ever since.

The next and most recent memory the ad conjured for me was how Tillerson (our present Secretary of State appointed by Trump) was the CEO of Exxon-Mobil before he stepped down to serve our country as its chief diplomatic officer. I remembered in the run-up to his  Senate confirmation seeing TV images where he is shaking hands with Putin in Moscow, was decorated with Russia’s highest honors for non-Russians, and how he and Putin were involved in discussions of how (considering international politics) to jointly fund drilling for oil in the Arctic. It would not be an understatement to write that they seemed
“chummy” with one another as partners in such a proposed project and the potential for huge profits which if successful would greatly add to the bottom lines of Exxon-Mobil and the Russian oligarchy.

Trump, the pro-polluter, has endorsed the idea of drilling in the Arctic (and the national parks and monuments and anywhere else suspected of containing oil or gas, though to date thankfully excluding the National Cemetery in Arlington). Recently he had occasion to publicly disagree with the “back channel” efforts of Tillerson to negotiate with North Korea, though I note that he did not disagree with the “back channel” earlier and known efforts of his son-in-law, Kushner, in the latter’s efforts to communicate with Putin.

It seems that even war or peace is subject to Trump’s narcissistic impulses and commentary formulated in his surreal otherworld, otherworld impulses that he twitters as policy which are increasingly critical of his own appointees’ attempts to come to grips via beneficial initiatives in the real world the rest of us inhabit, initiatives that if they become policy might well lead to global peace and prosperity. It seems that he cannot stand to be upstaged, especially by anyone opposed to his views and even inferiors in his own cabinet whose fate he commands. (See resignations and firings.)

So why should Trump have all of the fun in conforming reality with his psychotic otherworld? I will venture into my own otherworld in connection with this essay’s topic and make a prediction: That Tillerson will resign on or before this year’s end amid erroneous press observations that his boss criticizes him, go back to his old job with Exxon-Mobil or, alternatively, act in an ex officio capacity for Exxon-Mobil, and as armed with his former prestigious position of Secretary of State and privy to its secrets, negotiate with Putin either directly or indirectly, all with a view to drilling in the Arctic which, as we have seen, Trump endorses, and which, if it happens, brings our national security as well as pollution to the chopping table of international politics, as in, what will Putin want to know in return for a smaller percentage of the Arctic profits?

If I am correct or nearly correct in my prediction which is admittedly not based on known facts, was this a backroom understanding that Trump and Tillerson reached, and that Trump’s criticism of Tillerson’s back channeling with North Korea is the opening salvo in which Tillerson will, after a suitable interval for plausible denial, resign? I don’t know, and given the secrecy in Trump’s administration, have no way of knowing. Who can know anything from a leader whose “policies” change from one minute to the next as his mental processes vary with the latest insult to his vision of himself, either real or perceived?

So am I engaging in a practice I condemn in Trump, i.e., conspiracy theory? I plead guilty, but invite criticism of my reasoned guesswork with that of Trump’s proclamations of his electoral win as a “landslide victory” when he lost the popular vote, the “biggest crowd ever” at his inaugural when it was a mediocre gathering dwarfed by that of Obama’s inaugural etc. etc. etc.

So am I on or nearly on to something with substance (a la Flynn and Manafort) while we await Mueller’s report or just whistling in the political wind? You be the judge.      GERALD        E



Industrial policy is a rarely used phrase these days since the Information Age is rapidly supplanting how and where we manufacture, distribute, finance and otherwise provide goods and services to a global marketplace. Industrial policy became best known in socialist countries and in a few capitalist countries where politicians put together 5-year, 10-year and other such time-themed industrial plans, all designed to strengthen the economies of such various states but which gave insufficient consideration to changing politics and innovation, among other mistakes in structural design.

As we can see with our move to the Information Age, innovation won, but who else were winners? Try Wall Street and “the market,” who not only make our policy, but with our money lavished on their efforts via tax cuts, tax loopholes, regulatory and other such coddling via a “policy” known as trickledown economics, where our politicians abandon the people’s interests and leave the “planning” (and our tax money) to the moneychangers, whose sole purpose is to enhance their own profitability irrespective of how such greedy monomania plays out for ordinary Americans, the moneychangers won big time.

Top-down industrial planning by politicians didn’t seem to work in the socialist countries, and we will never know whether it might have worked in this country since it was never tried, but from the looks of today’s resulting maldistribution of income and wealth in market-based planning in capitalist countries such as the United States one might reasonably ask if either industrial or information models have worked or are working under the tutelage of Wall Street and private enterprise. The business pages of the Wall Street Journal will tell you that it has worked brilliantly, but those under the bridge, on the sidewalk, those on minimum wages and those who are sick or otherwise forgotten and I may have a different view of how our economy has worked or is working for the benefit of anyone but the moneychangers.

Capitalists both here and elsewhere loudly opposed any industrial planning by government as communist, socialist, and certain to bring catastrophe to our American economy, but they seem oblivious to the historical fact that our economy has already had numerous catastrophes under their trickledown model such as The Great Depression, Bush’s Great Recession and numerous panics and recessions, most of which were due to their greed in trying to extract a larger piece of the pie of our economy than was available as demonstrated by stock market crashes and a hollowing out of the middle class.

Adam Smith envisioned business success as emanating from pure competition and efficiency in providing goods and services for the marketplace, but that is not entirely necessary these days. Corporations need not be more efficient to be profitable; they only need trickledown economics to come to their bottom line’s rescue in the form of tax cuts and loopholes and other such “planning” in a world where, for instance, American multinational corporations are mere marketing shells for shoddy goods made by foreign contractors and imported from overseas while their overseas’ profits are not taxable until repatriated (courtesy of politicians to whose campaign financing they have contributed), among other such atrocities which ordinary taxpaying Americans are financing – and to taxpaying Americans’ own detriment. Result? You and I are literally paying for stratospheric executive bonuses and compensation and dividends and capital gains to corporate shareholders while such coddled interests complain of minimum wages and the costs of healthcare for Americans.

So today we have trickledown economics “policy” (which has never worked) dictated by the moneychangers whose sole interest is in their bottom lines financed by American taxpayers whose interests have been abandoned by our rotten political culture? Sure looks like it, and we can do better, much better, but how? This decision (in spite of Citizens United and Big Money) can and should be made at the polls and not in the streets. Let’s remember that by our vote in November, 2018, by turning the moneychangers out of the temple in Washington. Let’s vote for the people and bring them back in the temple while requiring the rich and corporate class to pay their fair share for the temple’s upkeep.     GERALD       E



Americans of every political stripe, left, right and center, including me, object to lavish and unnecessary spending of taxpayer money by public officials. We also object to the payment of money to public officials or those who would become public officials (see Flynn and Manafort) by foreigners whose interests are not aligned with ours (see Russian payoffs and money laundering at the Bank of Cyprus).

We have just yesterday watched the HHS Secretary Tom Price go down in flames of resignation and today we are told that the VA secretary recently spent half his time in London sightseeing, all at taxpayer expense, so he may be next for the ax, and not because he played the taxpayers for suckers, but rather because he was caught. To Trump, appearances are everything, so it is not the spending that is bad, it’s being caught, and speaking of Trump, we are also told today that the president has spent more taxpayer money going to country clubs and golf courses in his first several months in office than Obama spent in eight years in office, so perhaps he should accept his own resignation from office for lavish overspending of taxpayer money.

We the taxpayers have learned about such wrongdoings via the press, a press defined by Trump as “the enemy of the people.” His shoot-the-messenger efforts in order to obscure the message are slowly but surely coming to an end. It is clear that the press is not “the enemy of the people” as ballyhooed by Trump  but rather the guardian of truth in unmasking what is going on in the back room of the ruling Republican majority, a Republican majority that talks about bare-boned budgets for the poor and middle class while at the same time engaged in yet further tax cuts for the rich and corporate class, a majority that promised to “drain the swamp” if elected but whose efforts to date in overspending taxpayer money and more tax cuts for the superrich  are designed to “drain the treasury.”

However, the rotten political culture we have elected as above described and the taxpayer money so  lavishly spent by those who preach austerity for the poor and caviar for the superrich are chump change when compared to the even more rotten political culture we have involuntarily inherited as a result of Citizens United, a democracy-deadening decision that allows Big Money to buy our elections.

I was reading just this morning from Piketty’s great book, Capital in the Twenty-First Century, a chapter devoted to the inequality of income, where he describes how all such capital and labor inequalities in income came to pass, and was motivated to write this post as a result. Piketty concluded this chapter by noting that “The very large decrease in the top marginal income tax rate in the English-speaking countries after 1980. . . seems to have totally transformed the way top executive pay is set, since top executives now had much stronger incentives than in the past to seek large raises.” He continues: “I also analyze the way this amplifying mechanism can give rise to another force for divergence that is more political in nature: the decrease in the top marginal income tax rate led to an explosion of very high incomes, which then increased the political influence of the beneficiaries of the change in the tax laws, who had an interest in keeping top tax rates low or even decreasing them further and WHO COULD USE THEIR WINDFALL TO FINANCE POLITICAL PARTIES, PRESSURE GROUPS, AND THINK TANKS.” (My emphasis).

So who wants to reduce taxes on the Kochs and Mercers (and incidentally, Trump) even further than the internal revenue code allows at this time – and why? Here are who and why. The superrich and the Republican Party are joined at the political hip. Piketty is right to a fault, as in, you give me more money to spend with more tax cuts and expanded loopholes and I will give you more money to get reelected. We have a lot of money and will drown out these heathen losers with propaganda like the world has never seen. Continue to help us suppress the price of labor, cut our taxes and expand our loopholes and we will keep you in office forever. Deal? Done. It’s that simple.

This is the quid pro quo that is on the table in the back room of our Republican wheelers and dealers and Citizens United has armed the parties to this anti-democratic understanding with the tools to make it happen, as it is. We the People are not governing; our governors are in the minority but in office via hook or crook, misrepresentation, gerrymandering and enormous funding by those who expect something for class Trump is trying to sell us with his long since discarded trickledown chatter.

What to do? Ignore the financial plight of the billionaires. Insist on legislation guaranteeing a living wage rather than a minimum wage. Resist tax cuts and insist on ending tax loopholes for the superrich. Reverse Citizens United or at least limit its application. Stop political treatment of us “losers” as though we are mere ATMs to fund the bottom lines of such as the Mercers and Kochs (and incidentally, Trump).

But for time and space, I could cite dozens of other ideas on how to end economic and political inequalities in favor of creation of a vibrant economy and inclusive democracy, but that is for another day, a day that may not be available to us given the present chaos and greed in our nation’s capital and statehouses reminiscent of the collapse of Rome, all of which, unless ended or at least curtailed, could be our fate. It is time for the 99 percent to speak up at the polls and, if necessary, in the streets if we are to save our democracy, which as I often write, is one of the last few things left worth dying for.    GERALD       E



It seems that the high-flying ex-Secretary of HHS has been grounded. The White House says he offered his resignation and Trump accepted it (translation – “Quit, Tom, or I’ll fire you. Better to leave with the dignity of a resignation than getting fired, like I’ve had to do with a lot of guys who wouldn’t quit and forced me to pull the trigger, like I did for years on The Apprentice.”) First Class was not good enough for Tom; he preferred his caviar by way of unbelievably expensive private air accommodation, all at taxpayer expense, of course.

I cannot pretend to be shocked Casablanca style at Tom’s preference for (literally) high living. After all, he and his fellow Republican cabinet secretaries represent the rich and corporate class, a class that Trump has scheduled to pay even less taxes into the government’s coffers than they are now, so such big corporations as Boeing and Verizon (who pay no taxes at all lately along with GE, who not only paid no taxes in 2010 but who managed a REFUND for that tax year though profitable) couldn’t care less since they have no skin in the game. Let the poor and middle class fund Tom’s airfare. Tom’s preference for private air accommodation rather than merely flying first class commercial didn’t cost them anything, so why the big fuss? He was doing a good job in dismantling the agency he was appointed to destroy and it cost us nothing, so what’s the big deal?

The big deal, of course, is the same big deal that attended the departure of General Flynn, whose Russian and Turkish connections Trump (and Pence) knew about but kept their mouths shut. Flynn was confirmed by senators who did not know about the depth and sweep of his foreign connections and he lasted only some three weeks on the job before he was fired. The connection between Flynn and Price could not be clearer and it is this: That Trump doesn’t care about high priced plane rides by Price or even Russian or other foreign connections of a National Security adviser set to be privy to all the nation’s secrets and will by his silence even endorse such threats to our nation’s health (Price) and national security (Flynn). What Trump fears is that such misconduct becomes known, which leads careful citizens to wonder what other misconduct Trump knows about but will do nothing about until discovered.

So who blew the whistle on Flynn’s foreign connections and Price’s hundreds of thousands of dollars in air fare? Why, it was that guardian of truth, the press, which Trump calls “the enemy of the people.” Those such as Trump who will only responsibly act when discovered are themselves threats to the nation’s health and national security, and much more in the case of Trump, who is the appointing authority and responsible for the conduct of those he appointed in other such capacities, capacities such as those in Education, Defense, and other such important areas of public concern.

Not speaking up when one has a clear duty to do so, especially when our national security is involved,  is, in my opinion, a very serious breach of duty and one I hope Mueller will include with his report to the Congress for Trump’s impeachment and/or indictment, or both. This is not a game and not another installment of The Apprentice, and Trump, who was and is responsible for the conduct of his appointees, needs to come out of his narcissistic otherworld and live in the real world you and I inhabit in these dangerous times by putting aside his ego and honestly living up to and performing his constitutional duties as president. If he can’t or won’t, then he should follow the example of Price and tender his resignation from office.    GERALD        E




Trickledown (also known as tax cuts, among other things) and failure to regulate the activities of big banks and corporations have never worked, contrary to incessant propaganda offered by the rich and corporate class to the contrary. They have not only not worked for ordinary Americans; they have not even worked in the long run for the rich and corporate class. Yet since the Great Depression of the Thirties the argument that reducing taxes on corporate America will result in unleashing investment, employment, wage increases, entrepreneurship etc. that will result in economic growth persists even though study after study shows that raising taxes on the rich and corporate class has little effect on the economy other than to increase government revenues needed to help fund important public initiatives.

In modern times, it was Reagan who came into office and furthered this myth, and things have not been the same since. His giant tax cuts on the rich and reduced regulations on the rich and corporate America instead gave us a recession along with Iran-Contra and a wife guided by astrology. Contrary to business page chatter, he was a disaster for working class Americans (though a boon to the superrich).

George Bush the Younger later gave us a first in history, a giant tax cut for the rich during war, and an SEC which looked the other way on the regulation of the big Wall Street banks who themselves, unleashed by Clinton’s ill-advised signature on a bill in 1999 repealing the New Deal Glass-Steagall Act which had theretofore prevented banks from mixing investment and commercial banking, soon gave us Bush’s Great Recession with their reckless and criminal investments. I need not recount their mortgage fraud, our hundreds of billions in bailouts, the Fed’s purchase of their subpar paper at par etc. etc. etc., all of which is well known, none of which had to happen but for the twin myths of trickledown and over-regulation.

My followers have read most of my above diatribes before, but have had little extraneous proof of my denunciation of policies calling for reduction of taxes and regulations on the rich and corporate class. I here propose to lay out a few of such proofs and their results. Let’s start with regulations.

Regulations must be based on statutes, thus there must be laws in place in order for there to be rules and regulations construing such laws. With the repeal of Glass-Steagall in 1999, we also rid ourselves of rules and regulations which did not allow the big banks to mix investment with commercial banking, thus also allowing the big banks rather than the SEC to measure risk assessment, which is the equivalent to inviting a fox into the henhouse and asking him or her which chicken he or she wants to eat first. The fox chose credit derivatives, securitized shaky mortgages for sale to unsuspecting customers such as retirement funds for nurses, policemen and firemen, and traipsed around the globe making investments that were not regulated or overseen by Bush’s SEC. Result? See above (Bush’s Great Recession).

The fundamental problem with the anti-regulation crowd of Reagan-Bush and now Trump is that they have failed to understand that regulation of practices by big banks and corporations is not a damper on economic growth but rather applies to the bad practices such regulations were designed in the interests of all of us to prohibit or otherwise control. Proof?

Bush’s enormous reduction in taxes for the rich and corporate class in wartime, a first, when added to abandonment of regulation of such a class in their both domestic and international activities, was an open invitation for disaster to our economy, and unsurprisingly, the economy tanked. How badly did it tank in terms of aggregate lost wealth to our economy (yet to be recovered)? Try, per the Government Accounting Office, 22 trillion dollars! The GAO breaks it down into 13 trillion dollars in lost economic output and 9.1 trillion dollars in home equity losses. To give you some perspective, this lost 22 trillion dollars is currently a bit more than our gross national debt, which I understand is hovering around 21 trillion dollars, and that is a lot of money either to owe or lose or give away because of “malfeasance, incompetency and complacency,” as described by Rana Foroohar in a Time article of October 13, 2016, entitled “The Financial World’s Rotten Culture Is Still a Threat – to All of Us.”

Like a rock thrown in the middle of a fish pond with its concentric circles hitting all shores, there are other both human and economic tragedies resulting from Bush’s trickledown and anti-regulatory policies (and as again advocated by Trump). Thus, for instance, Joseph E. Stiglitz, noted economist and Nobel Prize winner, writes that lost economic production can never be recovered and that its effects are still with us to this day. Seven million people lost their homes to foreclosure as a result of Bush’s Great Recession. Thousands of suicides in Europe and America were attributable to Bush’s Great Recession, as noted in an article in the British Journal of Psychiatry of June, 2014. Credit froze. Retailers closed up shop. Thousands of small banks who received no bailouts either closed or were forced to merge by the Fed. Unemployment soared. Bankruptcies soared. The only possible good news from this continuing economic tragedy is that it provided a history for us to see and never again repeat.

So what is Trump proposing?  A repeat – more of the same old same old trickledown and anti-regulation. Are we so profit-driven and greedy that we refuse to comprehend history, even our history of just a few years ago? As I often write, how many more hits can our economy take before it collapses and takes all of us with it, both rich and poor? Must we, as Elizabeth Warren suggests in her book This Fight Is Our Fight, succumb to Trump and his band of billionaires, bankers and bigots? NO!

When Roosevelt was insulted and threatened by the rich and corporate class, he responded with his classic statement on the Saturday before Election Day in 1932 with reference to the moneyed class: “They are unanimous in their hate for me – and I welcome their hatred,” which tells me that we need not succumb to the ruinous trickledown and under-regulatory policies Trump is proposing as a puppet for Wall Street and to line his own pockets as well. Like FDR, we can and should and I for one will loudly protest tax cuts for those who don’t need them along with demands for what they do need – regulation. FDR also stated in a lesser-known quote that the war against “privileged princes” and “economic royalty” running corporate America was not just “war against want and destitution and economic demoralization but a war for the survival of democracy.” Amen! He was right then and his insight is prescient now as words we should heed lest both we and our democracy fall from within.     GERALD       E



Adam Smith, the founder of modern day economics, understood as early as the 18th century that there were multiple interests involved in capitalist economies; that there were producers, consumers, financiers and the like who had vital interests in the economy. He was brilliant in his time and place, but unfortunately, assumed perfect competition and equality of knowledge between buyers and sellers in the marketplace, assumptions that have never been true and are glaringly obvious today.

Indeed, one of my favorite economists, Joseph E. Stiglitz, won a Nobel Prize in Economics for his study of the inequality of information between buyers and sellers. So, speaking of inequality, want to argue with your CPA on taxes? Your doctor on cancer treatment? Your lawyer on a provision in your will? Good luck! Inequality of information is built into the system and is becoming worse with specialization. In this latter connection, Albert Einstein lamented as late as 1955 that as a physicist he could not talk to fellow physicists at meetings and conventions and did not understand their jargon anymore due to the fact that all of them had become so specialized – and he had not.

Stiglitz, for our purposes in this essay, compares the economy to a pie. He notes that such a pie can expand or contract, and that workers, management, financiers, consumers and other actors in our economy have vital interests in expanding their respective pieces of the pie. The only way the pie can expand is through economic growth. Thus with such growth the pie is expanded, presumably to the benefit of all of the actors in our economy; that is, unless one of the actors hogs all or nearly all of such growth to their own bottom lines, as has been the case for the past 35 years or so. The culprit? The financiers. The victims? Corporate workers and the rest of us. Why even have economic growth if all of its benefits go to one actor in the economy and the rest of us in our respective capacities are burdened with wage inequality, inflation pricing and other such negatives which additionally act to reduce demand and thus keep us on the edge of recession?

It behooves us to look behind these rather simple macro facts and look to the underlying realities. Thus, for instance, we know that economic growth can come only through enhanced demand for goods and services. We know that there is no “magic of the market” (as Reagan proclaimed) in growing the economy. We know that there is no “invisible hand” (as Smith wrote) which naturally inheres to an equilibrium of competing forces in a capitalist economy. We know that the financial sector has hijacked economic growth and worker productivity to its own bottom line. We know that there is nothing “natural” about any economy, that any and all economies are man-made, and that we cannot rely on such slogans that imply otherwise. We know that the rules of a near economic bartering system of long ago have little relevance to today, when billions of dollars in investments and other undertakings can be transacted with the push of a button.

Knowing this, how are we supposed to react? What is government’s role? Why are we allowing financiers to allocate risk in our marketplace (see mortgage fraud, bailouts etc.)? Are we socialists when we want to regulate activities in our own marketplace?  Why are all parties to the economy not effectively represented through regulation of our marketplace, a marketplace that belongs to us and not financiers?

There are more questions than answers in trying to come to grips with the greed and inequalities we see in fairly distributing the fruits of our economy among and between competing sectors for their piece of the pie, but if our capitalist economy is to survive, we must press on in attempting to bring equilibrium to our boom or bust economy by adopting policies that fairly compensate all actors in our economy, much as we did under the New Deal when wages and profits moved in tandem and one paycheck was enough for Americans to buy a car, a house and other such necessities. Wage inequality beginning about 35 years ago is, in my opinion, the leading cause of tepid demand, which in turn (especially with outsourcing and domestic slave wages) has given rise to recessions and near depression during Bush’s Great Recession, all of which never occurred during New Deal days, when the fruits of our economy were more fairly distributed to all sectors of the economy.

I have often written (and here reiterate) that I cling to the faint hope that our capitalistic system can survive, but that as presently practiced, I think will ultimately fail. I am no Nostradamus, but if I am correct, and we remain unenlightened in attending to the peoples’ business of fair play and remuneration and thus allow our system to fail, then my concern is what our next economy will resemble. It would likely be either right or left, neither of which would survive for long and probably marked by chaos and uncertainty while in existence. That need not happen, but unfortunately, Citizens United and its bottomless coffers may rule the day for the financier sector and thus hasten the day of reckoning.

A final note – When people like me agitate for public control of market investment and other such antics of Wall Street financiers to save the economy from ruin, the propaganda mill immediately labels us as socialists. Query> Since when are we socialist when we demand to run our own business? It’s our economy and doesn’t belong to any sector, including that of finance. Socialist? Hardly. As I often write, I am trying to save capitalism for the capitalists, if they will let me.       GERALD         E