During my twelve years in the White House, circulating within that hot house of bustling politics, I met a lot of people. By the age of fifteen I was pretty jaundiced; I had met "everybody" -- from U.K. Prime Minister Winston Churchill to Broadway star Mary Martin. It wasn't that I lacked respect for Cabinet members, Supreme Court justices, members of Congress -- even Harvard professors. But I wasn't in awe.
As I look around today at people in high places, "not being in awe" would be putting my feelings mildly. I haven't entirely lost my respect for senior figures in government, business, or academia. However, given the economic crises we are headed for, not just in my own country but worldwide, I question the values -- the priorities -- these leaders have. I wonder how they can all be so blind to the impending crises towards which our present style of life propels us.
It may not carry much weight with our citizens to trumpet that John Maynard Keynes was right, as Krugman did recently. This was echoed by Charles Wyplosz, a professor of economics at the Graduate Institute of Geneva in a New York Times article: "Every government in Europe with the exception of Germany is bending over backwards to prove to the market that they won't hesitate to do what it takes... We're going straight into a wall with this kind of policy. It's sheer madness." Robert Reich puts it simply, and pungently: "The real question is how to stop this austerity train wreck."
Even the Davos World Economic Forum cites as the Top Risks in 2012 "Severe income disparity and chronic fiscal imbalances are the two risks facing business leaders and policy makers this year." Politically speaking, it appears that Davos is crawling into bed with the 99 percenters of the OWS!
Recently, in Berlin, Chancellor Angela Merkel had a visitor. As the New York Times reported:
Italy's technocratic prime minister, Mario Monti, arrived in Germany on Wednesday with a sharp message for Chancellor Angela Merkel that austerity alone was not the answer to Europe's sovereign debt crisis. Said the Prime Minister, "I cannot have success with my policies if the E.U.'s policies don't change."
So, what makes these leaders so blind? Why continue draconian austerity when its history of curing sick economies is so dismal? Europe's prime ministers and finance ministers -- and their host of well-trained advisors -- are intelligent people, not dummies. Nor are they simply mean. So what makes them not only ignore history but also turn a blind eye to the current results of austerity measures in Greece, Ireland, and Spain?
In America it cannot be said that "austerity" has been imposed. But our efforts to meet the economic crises should be characterized as "too little too late." And worse, it has been focused on bailing out financial institutions and major enterprises. The nods given to the unemployed, or those losing their homes, has been pitiful, certainly not up to alleviating the pain of at least twenty percent of our citizens.
What sustains this rigid rationale on both sides of the Atlantic? Are our leaders getting all their cues from the elephants circling the Republican Party's presidential nomination?
Several explanations come to mind. First and foremost: our governments continue steadfastly to give preference to the interests of the business and financial sectors. This is not new. Go back to President Hoover and his reverence for free enterprise, careful avoidance of government intervention, and reliance on voluntary discipline. He held the private sector sacrosanct, saying, "The sole function of Government is to bring about a condition of affairs favorable to the beneficial development of private enterprise."
Herbert Hoover had a good grasp of economics (much better than FDR's), but his "belief" in the entrepreneurs' role in the development of America led him astray. He believed in the system, Capitalism, and the long-standing American love affair with private (free) enterprise. The American dream is of the unfettered individual moving from rags to riches.
This vision blinded Hoover from seeing that human beings, when left to themselves in a system without regulation but brimming with opportunities, will always succumb to temptation. But Hoover finally did come around. When leaving the White House he quipped to a reporter's question: "You know, the only trouble with capitalism is capitalists: they're too damn greedy."
Another explanation for the attitude of our political leaders -- and the policies resulting from their mindset -- is their concentration on debt, shrouded with a false morality. Hoover again: "The course of unbalanced budgets is the road to ruin." Our national debt, otherwise known as overdrawing at the bank, is made a priority over any human considerations including the obvious pain economic recessions cause in the lower and middle classes.
Is Capitalism at fault, a flawed economic system? No. The system (and all other "isms" as well) responds to the self-interest of people exploiting it. The problem is the way people use the free market, a system that readily responds to the compulsive appetite of greed. Without government imposed regulations we run amok.
Chancellor Merkel, Prime Minister Cameron, and President Sarkozy need to join President Obama in reviewing just how President Hoover finally came to put aside his pious beliefs and acknowledged the full dimensions of human self-interest. While not condemning capitalism, our leaders and their advisors need not to "believe" in Capitalism, any more than they would "believe" in Socialism or Communism.
Is it asking too much that our highest elected officials shift away from prioritizing the banking community and name as their first priority the people who elected them?
Daniel A. Bell: Memo from Davos: Down with Democracy!
Nathan Gardels: Mario Monti's "depoliticized democracy" in Italy
My conclusion is the austerity agenda is being pushed by banks. Because of great wealth and disregard of human suffering, they strongly prefer austerity over the slightest risk of even a hint of inflation. There is no other explanation. This explanation then points to the almost total control of economic policy by banking interests -- which is quickly confirmed by examining those holding the levers of power.
The corruption of democratic governments is almost complete.
You have run out of other people's money to tax or borrow.
It is that simple.
People have run out of buying power. Those who are not working or drawing low wages don't pay taxes. Those who haven't run out of money shouldn't buy from companies who send jobs overseas, then sell here and get high profits.
There is plenty of money, but it is in too few hands.
Semper fi
Business already pays for the roads, as do we all, and for police and fire. Who has advocated for any change to that?? Please be specific.
Buy from whom you please. It is your Right, as an American, even though the Left would eliminate that Right!
If I understood your second to last question, I favor elimination of Social Security. It has gone far beyond it's original concept, and is used more as a crutch than anything else. And, before you accuse me of cruelty towards the infirm, I'm happy with retaining supports for those who CANNOT help themselves, after their families, charities, and communities run out of money!
Semper fi
It was not in the best interest of the wealthy to help people keep thier homes,
The only way is to spend more money - in a reality where US government already supports or employs almost half of all Americans and 65% of all government spending is for direct payment to individuals. So, where will this money come from? From more borrowing, or raising taxes or simply printing banknotes?
The issue that most people seem to be oblivious to is: there is less money to share because the US - and all 'developed' economies are not growing. Many, like Japan, have stopped growing for decades now. And they are not growing because productivity growth has been declining - corporate profits increasingly have been generated by pushing labor costs down - like outsourcing to China - rather than broad innovation and automation.
Unlike during the 1860-1960 century, where wages and productivity were growing in tandem, based on broad innovation, our recent era of information technology and 'globalization' has reversed the trend. We work harder, longer and for less. Outside of computers, innovation is hard to come by.
Rather than listen to another hapless politician with lots to promise but no delivery - or ask for the government to throw more money at the systemic problem we don't fully understand - why don't we try to find out the real reasons for our economic decline - not just the US, but all the once-leading countries?
Hello - anyone remember the Bush tax cut? Or that at the end of Clinton's presidency, our nation was running a surplus - and at the end of Bush's presidency, after he gave a Trillion+ away in tax breaks to the most wealthy - we were once again running a monstrous deficit?
You will never right-wingers like Jack here (and probaby the billionaire funded think tank he comes from) talk about WEALTH INEQUALITY and how corporate America and the wealthy are masters at avoiding paying their fair share of taxes or accepting the SOCIAL RESPONSIBILITY of living in a civilized society in which not a single one of them could have been wealthy without Americans going to work every day.
Our current collected taxes is now 14% of our GDP - the lowest of all advanced nations. Our historical average has been 18% of our GDP. So our problem isn't spending IT'S REVENUE We still are the richest nation on the planet. Not even China comes close - our GDP is almost twice that of China.
What we have is class warfare being waged by the right-wing and their sponsored rich upon ordinary working Americans. They want you to think we're broke - that nothing can be done about our current economic disaster - THAT THEY THEMSELVES AND THEIR WALLSTREET BUDDIES
The problem is spending, on cronyism and "pie-in-the-sky" dreams that merely benefit their political pals.
Semper fi
They generated profits in all kinds of devious ways from cutting taxes, starting two wars, derivatives, scams and trashing the stock market. Now they are sitting on them.
If Bush's big tax cut during war had been paid instead, then our deficit woould not be so high.
Semper fi
instead, it is based on manipulated supply and perceived need
capitalism is dangerously but never fatally (as those in power $ee to its $urvival) flawed due to the corrupt nature of man
The financial system has to fail, and many a debt is going to have to be written off, not least of which is mortgage debt (how else is anyone gonna pay for things).
The financial industry is feeding on the QE like there is no tomorrow, they all know what is coming and you can bet they will be financially in the black with all those offshore accounts.
It is time that Obama adopt you stance and announce to the "people" what it takes to move us in the direction you seek. He only need quote FDR; "Make me do it."
Central Planning of the economy...the main player being the FED. Has led to a connection between banks, corporations, wall street, and politicians in Washington. Whoever controls the money, ultimately controls the power. The FED is that organization.
Without people making money, you couldn't have a giant middle class, pay taxes to provide public services, or have the creative freedom to move into new technologies and develop new industries...
What has happened is that America sold out, bought the promises of many a politician - and the wealth produced is not equaling the wealth consumed. In order to keep Americans satisfied, through consumption and services the FED has deflated the value of the dollar because it is trying to keep the myth of a healthy economy and if it fails to fund the safety net programs, there would be anarchy.
Think about what 50 dollars could buy you in 1970. Think of what it can by you today. In exchange for the safety nets, Americans destroyed the middle class aka themselves because they can't save money or protect themselves from the financial bubbles created by the rich
I didn't vote for Reagan or the Bushs. About half the country didn't vote for them.
We have corporate democratic leaders. I fault the political committees and their rules for how and who can run. If they were working for the people they would give us better choices.
Semper fi
If you run your business poorly and it fails, you don't go crying to the government (AKA taxpayers) for help. File for bankruptcy just like Ruddy's Pizza.
There is no such thing as too big to fail.
When a business makes bad decisions, it fails. And when people invest in businesses that make bad decisions, they lose their money.
Sorry, but that is the way it SHOULD work.
Not as long as money drives our politicians. Not as long as lobbyists write our legislation. Not as long as the door revolves between corporations and congress. Not as long as corporations are considered people by the courts and the well healed and can spend unlimited amounts of money influencing our elections.
FDR had the father of JFK to set up rules for the stock market. That worked until the Bush era.
It all worked until the Bush era. We had our highs and lows, but our leaders were not corrupt.
We need to put FDR's rules and all back on the banks and stock markets.
We have plenty of historical examples of government involvement in capitalism causing wealth disparity. Banking since FDR. Rail Roads in the 1800s etc....
We should fear the regulators not the capitalists.