Will Obama Reboot Capitalism Anew?
Over six million people are now out of work, and unemployment figures released today show that now-record number is continuing to climb. Meanwhile, still-profitable American corporations manufacture goods for American consumption using Chinese labor and pay virtually no income tax by keeping their profits offshore.
A hundred years ago, Republican President Theodore Roosevelt tried to reign in some of the most toxic behaviors of capitalists that he found incompatible with modern democracy by pushing through congress a law that banned the practice of corporations giving money to politicians. He slowed down the robber barons a bit, but three consecutive Republican presidents in the 1920s led us straight into the Republican Great Depression.
Franklin Roosevelt, his distant cousin, rebooted capitalism in the 1930s, ushering in an era of regulated capitalism -- embraced by Republicans like Eisenhower and Democrats like JFK -- that brought us the largest, strongest, and most stable middle class ever seen. We also became the world's economic superpower, as the world's largest importer of raw materials, exporter of finished goods, and banker to the world. We imported iron ore and exported televisions and cars and washing machines. The rest of the world was in debt to us. A worker with a high school diploma could find a job that paid enough to raise a family and have a safe and comfortable retirement.
The Reagan Revolution of the 1980s was the third "rebooting" of capitalism in the 20th Century, and continues to this day. Scorning the "regulated" part of "regulated capitalism," economic Reaganites from the Gipper himself to GHW Bush to Bill Clinton to GW Bush flipped our economy upside down. Today, after just thirty years of "free trade" and "right to work" and other oxymoronic nostrums applied as policy, we've become the world's largest importer of finished goods and the world's largest debtor. We now export minerals to Asia, and import back from them televisions, cars, and washing machines.
So now the big question: Will Obama reboot capitalism anew? Will he move us into a new realm of capitalism, back toward regulated capitalism, or continue the slide toward a poverty-ridden Dickensian economy that Reagan started?
At the moment, nobody knows.
Reagan began the war on working people when he busted PATCO in the first year of his administration, and then began the process -- largely uninterrupted right up to a few months ago -- of dismantling the protections organized labor had enjoyed since the New Deal. When Bill Clinton totally abandoned the national industrial policy that Alexander Hamilton had put into place in 1791 with NAFTA, GATT, and the WTO, we made the shift from a "Made in the USA" to a "Do you want fries with that?" economy. And the near-total deregulation of the commodities (including energy) and financial sectors begun in the last years of the Clinton administration and put on steroids by Republicans during the GW Bush administration led to a shift from a "Do you want fries with that?" economy to a "How much would you like to borrow from us?" economy.
Now the manufacturing jobs are shipped overseas, and we're left with lousy jobs and maxed out of credit cards. Many of the few manufacturing jobs that will be created by the Obama stimulus plan will be done in American factories, but the profits will go back to Denmark, Japan, Norway, and other countries whose "green" companies are buying or building our manufacturing facilities.
All of this seems just fine with the Summers and Geithners of the world, and many of the Democrats who rolled over in the face of Republican opposition to the "Buy American" provision that was thus and then removed from the Stimulus bill. "Cheap credit" seems like a goal rather than a warning. And, tragically, several democratic senators have already signaled their fealty to the Robber Barons by refusing to endorse the Employee Free Choice Act.
One can only hope that -- like the Obama reversal on the possibility of prosecution of Bush war criminals -- our new president will change course and take us back to a "Made in the USA" economy. Like Franklin Roosevelt famously (and perhaps apocryphally) said, perhaps Obama is waiting for us to pressure him to "Make me do it."
Thom can be heard daily on his radio show 12pm - 3pm ET. Visit www.thomhartmann.com to stream live or find a station near you.
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Mr. Hartmann,
You do know that NAFTA, GATT, and the WTO are not creations of the free market right? I want to clear this up for you because you seem to confuse what Alexander Hamilton wanted and what we have now.. Although Hamilton is not rolling in his grave because we have his "American System". (See Henry Clay and Abraham Lincoln if you need more insight to the American System (you know protectionism and anti-capitalist policies that they eventually got into government)
Thomas Woods responds to Thom Hartmann's economic insights:
http://www
Hopefully, Hartmann will reply with a critique.
What insights does Hartmann have? He has obviously proven that he is woefully ignorant about economics and what it is. If he does try to critique an economics professor by talking about economics. There will be a fit of laughter.
NONE of the 'economists' have a clue, they are paid NOT to think about these things.
Think about this basic inconsistency of the present system: financially the world is living on drafts upon the future (the credit/debt-money system); economically it is living on the products of the past.
The empirical evidence shows that the resulting effects of this are:
1. total prices increase at a faster rate than incomes are distributed to pay them;
2. the increasing shortfall is filled with increasing accumulations of debt.
This is the reason why levels of debt are about 1.5 times more than the amount of money, and the divergence is growing.
This is obviously an impossible situation; over time it can only get more impossible, until at some point it becomes terminal.
The root cause of this unsustainable and terminal situation is the credit/deb
The debt-money machine is a Terminator; it is automatic and set to destroy humanity. We made it, we have to change it. Regulating a Terminator instead of changing its purpose is obviously not a solution.
The only serious solution is the American Monetary Act, developed by the American Monetary Institute, and based on the research of over 3,000 years of history, i.e. based on the facts of human experience. This draft legislation contains the essential elements of meaningful reform that will deliver a lasting solution (view it at www.moneta
And I thought Paul Krugman was the most economical
I would love to see a debate (and can set it up) between Thom 'Economist' Hartmann vs. Thomas Woods, author of 'Meltdown' on any subject relating to economics. So Thom, you up for it?
Tom, you have a dangling modifier up there after 1791; it sounds like Hamilton implemented Gatt, etc.
Otherwise, well done! And one might talk about the faults of transnational consumer capitalism in general, particularly the way that supply actually comes before demand and tries to excite people into buying things they don't necessarily need.
Every year there are cars and other commodities that their makers couldn't sell--just wasteful manufacturing. Instead of an economy that makes a lot of stuff and then uses commercials to sell them, how about some kind of system where we placed orders directly with a maker?
I hope he can reboot a sustainable capitalism. The old model was an upward spiral of consumption. Made a few people rich, but far more poor.
Good luck.
Where to start? This article speaks to the center of my angst, and the heart of America, but is short of specifics. But you must have a goal to make a plan, and this clearly defines the goal. I would think and hope, something that "liberal" democrats such as myself and the teabag crowd can agree on. It isn't about GDP - It's about return - how does my hard work every day, week and year of a half-century of labor benefit me?
It's the franchises that have destroyed local businesses. It's the takeover of agriculture that has eliminated family farms. It's migration of capital from local banks and credit unions into mega-banks. It's mergers and acquisitions that make stockholders and investment banks rich, while destroying the jobs of hundreds of thousands of employees of the companies merged.
We need a hamburger index, a vacation index - how many hours does a median worker need to afford dinner, to take two weeks off?
This is not top-down, it's not just government. People will have to accept paying 10% more for their clothesto close Wal-Mart in exchange for having local merchants. They're going to have to go to Farmer's Markets instead of getting cheaper vegetables at Albertsons. They're going to have to accept 3% on their savings at the local credit union instead of 5% from a mega-bank.
The real revolution is insisting on the quality of life instead of the quantity of life.
Tom Hartman is THE MAN!
I'm in MI. If you think we have any faith or trust in Obama, think again. I can guarantee you that he didn't campaign in MI and OH on forcing GM and Chrysler into bankruptcy. He would rather support his pals at Goldman Sachs than save high wage jobs for Americans. He is going to pass more trade deals, and he isn't going to lift a finger to protect American jobs.
If Nader doesn't run in 2012, I'm going to write him in. I'm tired of Democrats who are more beholden to Wall Street than the people who elect them.
So you speak for everyone in Mi?
Or just the 2 dozen of you at the teabagging?
CAPITALISM: DESIGNED TO CHEAT YOU.
America didn't abandon Capitalism, Capitalism abandoned America..!
This President is all about the bankster supremacy over the individual
It's a shame, we are blowing a great opportunity to make life better for all Americans.
More specifically, will he reboot capitalism HERE? We need to return to the point where goods are manufactured in the US. I don't see any hope of that until he addresses the masochistic trade agreements negotiated by Reagan-Bus
tom we need you to be sec of treasury obama needs your help
Thom -- I like the exhortation to make him (President Obama) do it. I saw a shift in his stance against the investigation of high level officials who are responsible for torture, so perhaps there is hope for labor rights, and affordable health care. Perhaps bailing out the banksters is the pact he made with the corporatists/DINOs.
Sadly, Thom, there are still too many DINOs (i.e., pro-corporations) in the Senate. The House has nearly eradicated these turncoats, but the Senate is still infested with them - hence the difficulty to get anything done for the average American people while having NO PROBLEM passing legislations expediently when it comes to Big Corporation interests.
For much too long we've had a 1-party government, but thanks to the blogosphere and the smart use of the Internet these charlatans are being unmasked for the Republicans that they are, and more and more people are catching on to these scheisters. Slowly but surely, they'll be gone too, but I'm afraid it's still going to take a few more elections before that's accomplished successfully.
LiberalDemIda,
You are so right! We have had a one party government for about 140+ years now, look back and you will see that there have been Republicrats and Demopublicans in office for far too long. Unfortunately for us people, like you, keep voting in these people that have no interest in us (and I have no interest in them). Fortunately, because they are looting the system so fast people will (hopefully) realize how bad the republicrats are. Let us face the music DemIda, Republicans and Democrats are the same type of politician. All they use is rhetoric on small issues to make you lose focus on the bigger ones that they agree about.
Sincerly,
MA101
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