A Bold Proposal for a New Economy
The free market guru Milton Friedman understood what so many progressives do not: that crises create opportunities for radical change. Naomi Klein called this the "Shock Doctrine." One of Friedman's opportunities was the brutal 1973 coup in Chile, which opened the door for the market-opening fundamentalism that Ronald Reagan and Maggie Thatcher then pushed around the world in the 1980s.
Today, the global and U.S. financial meltdowns offer such an opportunity for progressives. A progressive shock doctrine.
In this crisis, the victims are the millions of workers who have lost their jobs (600,000 in the United States in January alone) and the millions of families who are losing their homes. The villains are the executives whose reckless behavior got us into this crisis and continue to pocket massive bonuses and redecorate their offices while the economy burns.
Obama has embraced bold rhetoric, lambasting executives for their "culture of narrow self-interest and short-term gain at the expense of everything else." Even business professors, such as Harvard's Rakesh Khurana and Andy Zelleke, are trashing the prevailing corporate milieu wherein "little has been meaningfully valued by either executives or shareholders beyond the short-term accumulation of wealth."
Yet neither Obama nor most progressives are seizing the moment with bold proposals to meet the growing anger across America. A notable exception is David Korten, who has just released a 196-page Agenda for a New Economy, building on a series of articles in YES! Magazine.
Korten is nothing if not bold. His answer to the financial crisis: close down the Wall Street casino. Replace it with a revitalized Main Street by resetting economic priorities to support local economies and dignified work that best serve us all. Instead of "phantom wealth" that doesn't create anything of value, let's prioritize the real economy.
Korten also understands that we must use the economic meltdown to solve the other giant global crisis: climate chaos. His transformative agenda of vibrant local economies can deliver us a carbon-free economy within a few decades.
How do we do it? According to Korten, we have to redefine how success is measured. He has sharp ideas on how to get the market price of goods to reflect their full costs of production, including their adverse impact on workers, the environment, and communities.
In his real-wealth economy, government and citizen groups work to reallocate resources from the military to health care, from cars to public transportation, from mining to recycling, and from suburban sprawl to compact communities.
We close down the Wall Street casino through smart regulation, a transactions tax on the purchase and sale of financial instruments, and a fair tax system. We create a set of rules and incentives that favor human-scale businesses owned by local stakeholders. Korten is full of ideas on democratizing ownership and reclaiming corporate charters from footloose global firms. And, he is smart enough to know that these solutions work best if they are coordinated across countries.
The book is compelling, urgent, and easy to read. It will be a great tool to help harness the anxiety and anger gripping our nation. And it will link together the disparate parts of our country to work for progressive economic change, including grassroots groups like Jobs with Justice, which is has working with my own Institute for Policy Studies to create a new comic book on the meltdown. It will also draw in an organization Korten co-founded, the vibrant Business Alliance for Local Living Economies, which is spreading innovation among local business leaders, and YES! magazine, which has posted an excerpt from Korten's book The Speech President Obama Should Deliver.
From low-wage workers, to local entrepreneurs, from independent thinking elected officials to the global networks that brought you the Battle in Seattle a decade ago, there's a new questioning of the Wall Street-based economy. All who are ready for a new approach would do well to spend a few hours with David Korten's big ideas as they link their work with one another.
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In less than 200 pages, David Korten’s insightful new book, “Agenda for a New Economy: From Phantom Wealth to Real Wealth”, cuts like a hot knife through butter into the insane, dysfunctional, and destructive ruling-elite’s ‘corporate financial Empire’ that is now so obviously the cause of all our current sorrows.
Like William Greider, Ralph Nader, Joseph Stiglitz, Kevin Phillips, Paul Krugman, and thousands of other rationally unbiased insightful economists, and thinkers who are concerned with the sustainability of humane and peaceful life of people on our small threatened planet, David Korten rigorously researches, and writes about what it might take to achieve these ends.
The seminal threat to such peaceful and sustainable human survival can be summed up in one word: Empire ---- as it has been the case for the last five thousand years. Likewise, the solution can be summed up in one term: political, economic, and social democracy. This was the genius and goal of our founding fathers and it must still be the signal goal of America.
Korten compellingly brings into focus the way in which an elitist/royalist financial corporatist Empire crept back into our country through the economic ‘back-door’ and how it used the power of money to corrupt all aspects of our democracy. He very simply explains the current financial abyss, clearly defining the Ponzi scheme of negative externality costs that have been hidden in debt pyramids of our economic lungs, like the cancer of cigarette smoke hidden in smokers’ lungs.
I think a lot of people probably didn't continue reading after you seemed at first to be defending Milton Friedman, but I kept reading and found the progressive ideas of the author to be quite sobering and in line with things I have been promoting. I would like to add that many so called conservatives did realize that crises do make opportunities and that people tend to vote conservative when there is a crisis. This is why crisis is in their interest. Crisis is in the military industrial complex's interest. The question whether a crisis is natural or not. The problem happens when people like Nixon, Reagan, and the Bush administrations try to incite crises in order to wag the dog, to try to influence elections in this country. The Iranian hostage crisis is one example and I would like to give many more, but don't ask unless you are ready for it.
THE U.S. GOPVERNMENT SHOULD BUY UP ALL PROPERTY MORTAGES !!!!!!
THEN THE U.S. GOVERNMENT SHOULD BE THE ONLY PLACE ONE CAN BUY LAND OR A HOME.
THE INTEREST INCOME WOULD SUPPORT THE GOVERNMENT BETTER THAN ANY TAX SYSTEM EVER COULD.
THE GOVERNMENT THEN COULD CONTROL HOW MUCH FARM LAND IS TURNED INTO SUBDIVISIONS TOO.
THERE ARE SOO MANY ADVANTAGES IF THEY DID THIS.
PROTECTING THE EQUITY OF THE AMERICAN CITIZEN BEING NUMBER ONE.
interesting
The market liberalization of Chile is usually interpreted as a success story. Sure, income inequality increased, but the median income increased substantially relative to the Stalinist Allende regime. There were two keys to the success of the Chicago School economy in Chile. First, foreign investment flooded into the economy because the capitalist model allocates surplus value to investors. But perhaps more importantly, the Friedmanites with the help of powerful international bond traders instilled in the Pinochet regime a zealous commitment to fiscal discipline and conservative monetary policy.
The best-kept secret about political economy is that whether production is capitalized by public or private investment matters far less than whether or not money and credit are created out of thin air. It turns out that if the financial system has a limited quantity of money to allocate and can't just conjure up some more whenever we want it, then large-scale malinvestment becomes highly unlikely no matter how the capital is allocated. Conversely, if the supply of money is limited only by the demand for money, then just about any institution of capital allocation will eventually self-destruct.
Read Milton Friedman. He wanted to abolish the Federal Reserve and replace it with a ridiculously simple computer program. Read Adam Smith. He believed in a labor theory of value which today is most commonly associated with socialist ideology. The godfathers of market capitalism never advocated for anything substantially similar to the economic model prevailing today. Their ideas were distorted beyond recognition.
"Why,Chief Inspector Wither spoon?On the other hand,why not?"
Bertie Wooster commenting on irrelevancies in"Stiff Upper Lip,Jeeves"
I trust you see the point
Small business needs to be recognized as the only way to generate enough jobs!
Up to 6 million jobs and 4 million small businesses can be created by A Human Investment Tax Credit Program.
This was never considered for inclusion in the stimulus package.
One component, a jobs tax credit, became law for one year and generated more jobs in less time than any legislation in our history.
Two versions of the 2009 Report can be downloaded free at: aesopinstitute.org
The full Report contains a post Keynesian economic analysis.
The short version includes only what can be done and how Congress can do it.
Revolutionary green technology can kick-start the economy. Tapping the never before commercialized Zero Point Field opens the door to vehicles that never need fuel or recharge. The energy is abundant and inherently cost-competitive.
Cars equipped with this new technology can later become power plants when suitably parked. Vehicles can sell electricity to the local utility. No wires required. This breakthrough can allow cars, trucks and buses to eventually pay for themselves over a period of time.
Great ideas, but even Obama is not that brave, unfortunately.
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