Capitalism Run Amok

What if the only thing wrong with our government is that it has too many Capitalists messing with it? It occurs to me that perhaps the Great Factory Migration, globalism, and the rather turgid state of the America economy, and in fact the slowing economies of what I will call “old” Capitalist nations are all creating panic attacks in the ranks of our millionaires and billionaires. These folks have decided that they can boost the economy by pulling the strings of government. Am I against Capitalism as a way to do business? No, I am not. But what we are seeing convinces me that Capitalism definitely needs to be regulated.

Why are rich businessmen way too involved in our government? They blame the government for the current state of the economy and of business in America. Everything the GOP regurgitates as domestic policy has been dictated to them by their pals in the private sector. Who does it benefit to trim back the responsibilities of the federal government to only those spelled out in the Constitution? Well, since it includes plans to get rid of our social safety net programs, it doesn’t benefit we the people so that makes it fairly easy to ascertain who benefits. Wealthy corporatists benefit.

Who is most happy to see the House of Representatives and Donald Trump go on a spree reversing every regulation on business and on the environment? Well these reversals do not benefit we the people regardless of what some Americans have been lead to believe. Once again the benefits accrue to big business (which has not been looking big enough to please the wealthiest Conservative businessmen.)

While it may be true that the President cannot have any significant effect on the stock market, the Capitalists can. They can be more bullish about investing and freer with their dollars when they like the direction in which governance is moving. Since the Capitalist have bought and paid for the GOP and since the GOP is in charge of all three branches of government our “oligarchs” are, in a sense, applauding the current state of affairs in Washington. This is the sort of gentlemen’s club way of saying, “now we’re talking.” Donald Trump doesn’t bother these folks. He may be gauche but he is still one of them. One of them One of them.

Perhaps it is not really members of Congress who still believe in “trickle down” economics at all. Perhaps they have been “body-snatched” by corporate heads who like the way this economic approach lines their pockets. Corporate types must realize that if they corner all the dollars there will no consumers, and that will be bad for their profits and their comforts. It won’t be much fun to live in a dirty, sick, and poverty-stricken world. But I guess they can arrange to turn certain states (not blue states) into small worlds that they can control as they have already established control, with the help of the Republicans and ALEC, of at least 30 state governments.

It seems that if we could get money out of government, get these billionaires and millionaires a new hobby then our government might be able to return to regular order. How do we do that? We could try to overturn all the invasive laws passed at their command, such as Citizen’s United v FEC, etc. but the numbers are not on the side of we the people right now. Perhaps these wealthy meddlers are just bored.

Space is the answer to everything. We could be like North Korea, a nation which puts all its resources into bombing those who they hate, except we could put all those resources that are lining the idle pockets of the corporatists into figuring out how to travel in space, and do it without starving the American people. Think of all the resources that could be mined without ruining the few pristine spaces left on this planet. It couldn’t hurt to have the focus of every nation turned skyward so that we would perhaps stop sniping at each other on this planet which is seeming too small to contain us.

You may think that I am just a nut, but I am quite serious about this. Of course it will not bring only positive things but it will be interesting enough and, in the end, profitable enough to keep us occupied for centuries as the last Age of Discovery did. It involves terrible risks and I suppose the entire human race could be wiped out, but that could happen if we don’t try for the stars, and it would be far from a noble experience.

See https://www.tremr.com/jim-mcguiness/criminal-conquest-of-the-united-states-of-america which led me to think these thoughts.

 

Regulating Wall Street


Can we
afford to mess with Wall Street? Isn’t it like the tick tock heartbeat that
keeps our Capitalist economies alive? I picture an endless cycle of regulatory
action and Wall Street vengeance. The whole idea of an index of economic health
that is built around putting down a bet on whether a company or commodity will
turn a profit strikes me as a ridiculously unstable structure on which to base
an economy or my retirement income. However that is the system we have.
As the
Industrial Age moves on to distant corners (from us) of the globe the Stock
Market has experienced ever more volatility and is less and less under our
control. American companies do not have factories in America, they don’t pay
taxes in America, but they still hold places on the American Stock Exchange
(and other Stock Exchanges). And, although for many years our Stock Market
pretty much set the pace around the world that is no longer as true. There are Stock
Markets in a number of countries that can send shock waves through ours.
The “creative”
way that the stock brokerage companies in America met the changes in the
industrial scene in America should have been and probably were illegal. However,
even if they were not sure about whether or not what they were doing was
illegal they knew it was risky. Perhaps it was not illegal because no one ever
actually thought of doing something as stupid as bundling up bad mortgages with
good mortgages and rating the whole bundle according to the best mortgages in
the bundle. What is clear is that someone at these stock brokerages knew that
these bundles reeked and that there might/would be financial repercussions. This
does not even touch the illegality of the banks and mortgage companies that
offered these mortgages in the first place.
Our economy
obviously can’t take too much of this kind of “black hat” creativity. We
watched in horror as banks foreclosed on house after house forcing Americans to
scramble for new living arrangements and sometimes creating whole neighborhoods
of empty houses. The Stock Market took a nose dive. My pension (and those of
many other Americans) took a nose dive. Employment took that same dive. Without
the TARP I don’t think we would have pulled up before we hit rock bottom.
Without the stimulus we may have already had the revolution we could still be
headed for.
It stands to
reason that the argument that we might have to regulate Wall Street, make some
rules about what it is legal to do and what it is not legal to do has gained
lots of traction. This is what many Americans like about Elizabeth Warren and
Bernie Sanders. We are justifiably angry at greedy hedge fund operators and
mortgage companies for almost destroying the American economy and we don’t just
want reform, we want punishment. Hillary Clinton has also said that some regulation
is necessary although she does not hook into people’s anger and does not seem
to want to tar and feather the perpetrators and run them out of the finance
business. Mostly we would be happy if they had to give us back what we lost as
a result of their adventures in edgy economics.
But as for
the future, for me, and perhaps for you, there are questions. First of all,
since no one could have foreseen the bundling and sale of those stinky
mortgages (hold your nose) can we ever foresee every new ploy these people, who
must make money or die, can create? Second, can the American Stock Market
provide the secure investment structure and the secure economic base America
needs any more at all? How would America function without a Stock Market?
Perhaps some economists could discuss this among themselves and allow us to
listen in.
Can we
over-regulate the Stock Market and crash it? How do we choose the exact
regulations that will protect us from illegal profiteering and yet will allow
the Stock Market enough room to keep ticking along? If the SEC is unable to
oversee the market can we whip it into shape without putting a straitjacket on
the market?
Although I
hate what brokerage firms did to us to attempt to make money from bad
mortgages, I go back to my very first question – can we afford to mess with
Wall Street? And if so, how much? I think we are afraid, we are very afraid,
because we are not sure about the fragility of our economy and the entire
global economy. I have a gut feeling that we should buck up the economy before
we decide about large scale regulation of the Stock Market or even perhaps the “Big
Banks” despite our very real anger and our desire to send a tough message
through punishment. I also have a gut feeling that effective oversight is
important to stop truly risky financial strategies that could still be invented
by both the Stock Market and the banks. Everyone needs to keep an eye on our
pressure cooker financial crucible that is the Stock Market and the banks.
So I am
feeling that I need more information about exactly what regulation would look
like and what the effects of any regulation or various regulatory measures
might be. This is a time when we need to look to our economists. We also need
to remember that economics is hardly an exact science and that economists have
differing points of view on these matters which may be influenced by famous
economists, or by their politics, or both. What we decide, even after input
from the field, will still require a final judgment on the part of each of us.
Please you economics geeks, use simple language that we can all understand and
perhaps some scenarios like the ones they used in the film The Big Short to illustrate your points.
By Nancy
Brisson
(Disclaimer:
you may or may not believe this but I wrote this on Saturday, February 6th
2016. When I listened to Meet the Press on
Sunday and to the discussion of these matters between Hillary Clinton and Chuck
Todd it was just serendipity that I had just written this post. The only change
I made to this post after hearing their conversation was to add this note.)

Refugee Reality Check

We keep thinking about what might happen if we do accept
Syrian refugees. But perhaps we need to think about what will happen if we
don’t accept Syrian refugees.
If we do accept refugees from Syria we are nervous that
terrorists may make it to America. I am a true chicken. I understand fear. It
feels scary to host people who could harbor hate against us. We are assured
that we screen refugees with such care that it is highly unlikely anyone could
get through the process but we remember Boston and those Tsarnaev brothers who
came in as refugees and were radicalized once they were here. Our fears are not
baseless but we must admit that the number of refugees that might become bad
actors will be very small. We live almost daily with shootings. These threats
hardly seem different from the many mass shootings we have experienced. As for
enabling an enormous influx of rabid terrorists – only a full scale invasion
could do that and I don’t think our enemies have that capability yet.
The reasons, beyond the humanitarian ones, in favor of
accepting Syrian refugees are much more compelling. First, we cannot afford to
let the Republicans, who want to get elected in 2016, play us. If they make us
frightened enough and then offer to save us with their toughness they believe
this fear will drive us to put a Republican in the White House. Please prove to
the GOP that you are not that easily manipulated.
An even greater reason why we have to fight our fears and
accept Syrian refugees is because we owe it to our allies in Europe and
elsewhere. We have hung back in two world wars because they did not begin in
America, but we eventually fought with our allies when we understood that if
our friends lost we would only have enemies left.
This time the “war” began with us, very dramatically, on 9/11.
This attack was a game changer and our old friends stood with us once more. Now
we must not try to isolate ourselves even though our fears may prove real
(although, I suspect, not on the scale GOP candidates warn of). We must stand
with the friends we have forged as we have battled to keep the free world free.
We must even accept old opponents as allies for as long as they prove true to
our common goals. We cannot expect Europe to deal all alone with people fleeing
terrorists. Even though there is a big ocean between us we cannot afford to use
this geographical advantage to remain relatively safe and aloof. I doubt it
will work for long and, in the end, we will wish we had stuck with our
alliances.
More selfishly, flooding Europe with refugees could put
Europe’s economy in jeopardy. Our economic fates are tied together and are just
one aspect of the ways in which our individual existences as powerful political
entities are closely connected.
We are Americans. We need to suck it up and stand with our
friends. 

Note: (According to the NYT of 11/25/15 the Tsarnaev brothers were not refugees. They came seeking political asylum.)

By Nancy Brisson

The Minimum Wage – A Microcosm of America’s Two Futures

We know the
Democrats want to raise the minimum wage so that workers who are paid the
current minimum wage will actually be able to live on their wages (provided
they are full time employees). Democrats believe that people who work at full
time jobs, whatever the job may be, should not have to also rely on the social
safety net because no one who is working full time should be living in poverty.
This makes so much sense to me that I find it difficult to understand why
everyone is not on board. 
I hear even people who make less than the proposed
new minimum wage of $10.10 arguing that American cannot afford to raise the
minimum wage. They are afraid that they will lose their jobs or that other
people will lose jobs and unemployment will rise again. This is so sad. It
underlines the job insecurity that people have learned to live with for at
least the past 20 years in America. We now understand that employers cannot let
loyalty to good employees stand in the way of their bottom line. Profit
determines all. These low wage employees suspect that critics of a higher
minimum wage may be exaggerating the possible negative outcomes, but they have
been burned and they are not ready to brave the fire (the firings) again.
But on the
other side of this are the Republicans who want to lower the minimum wage, who,
in fact, would like to do away with the minimum wage altogether. Why are
Republicans against raising the minimum wage? They would like you to believe it
is because they have the answer to fixing the economy and they want you to
believe that we cannot fix our economy unless we get rid of all the regulations
that apply to doing business in America. Only if we give Capitalism free reign
once again will America prosper.
Only if we
get rid of expensive government programs which means dismantling the social
safety net (Medicaid, Medicare, food stamps, welfare, WIC, disability, social
security, unemployment, etc.) but not cutting corporate subsidies, not raising
the low tax rates for the wealthy, not cutting the military budget, will the
American economy rebound. Many Americans do not find it at all strange that
Republicans only want to make cuts that affect the poorest Americans because
they agree with the Republicans when they argue that this assistance is
creating a lazy class of people who get out of working and they also agree that
the way to solve this is to get rid of all these social programs. I just say
Yikes! Don’t these ideas seem extreme to you? Why is the GOP in favor of
getting rid of the minimum wage altogether? Why are they busting unions and
cutting public jobs? Why are post offices opening up in Staples manned by
non-Civil Service workers?
I say all
of these policies are designed by wealthy Americans to lure factories back to
America and we, the Middle Class, will be the very low paid, benefit-less work
force. I suppose this is a great plan if you are rich and don’t have to be one
of those workers. And they are on track to get this very cheap labor force. It
is looking more and more likely. It is very clear that Republicans have no
intention of raising the minimum wage, ever, because doing so does not fit with
their current economic strategies.
Is this
what we the people want? Are we so in need of jobs that we will accept Chinese
pay rates to get our factories to come back to America? What kind of deflation
will America have to see in order to allow such a low-paid work force to
survive and still live indoors (especially without that safety net)? It’s a
very grim prospect and we are on our way to it. But we are not there yet. We
still have time to elect Democrats in 2014. We still have time to make
considered cuts to our federal budget that will save money and save programs.
We still have time to accept that the 1.0 version of the Industrial Revolution
is over in America and that we haven’t yet seen the 2.0 version, but we
probably will. We are still a big and prosperous nation with lots of big brains
hopefully working on big new ideas.
I just
can’t believe we are letting Republican disrespect ordinary American citizens and
workers in the ways they have been during the post-Bush years when it is the
very risky activities of these wealthy people that put America into its current
straitened situation and the hard work of ordinary Americans that made them wealthy in the first place. I guess we have never comprehended so well our reliance
on the wealthy for our livelihood and our very lifestyles. Are we really free
people or just behind-the-eight-ball customers in a giant company store?

This is the view from the cheap seats.

By Nancy Brisson

Two Paths Diverged – Who’s Right?

Suppose we had never had a TARP bailout and a stimulus? What would our economy be like right now? What do economists have to say about this? Take a minute and go back to those times in 2008 when everything seemed to be crashing. Would it have been the brave path to just sit tight and let it happen? Follow that chain of events in your mind. I know it is difficult to imagine what our economy would be like if we followed that other path, but try. Would our recovery be further along now? Would unemployment numbers be down and employment up in such a scenario? I can’t do the math, but someone out there probably can. Perhaps the economists can write us a word picture of where we would probably be right now.
Apparently some feel that the economy would have been much worse for much longer; that these laws stopped the recession. These programs were not enough to grow the economy but they at least did no harm. Others feel that these programs were extremely harmful to America. Not only did they increase the debt and the deficit, they also did not allow the market to solve its own problems and get us out of this recession in the way that laissez-faire capitalism rebounds on its own (sort of organic economics?). Should we have let the big banks and investment companies fail? Should we have let GM go under? Should we have done nothing to help people who were facing foreclosure? Would the economy have gone into a true and deep depression if we did that or would we have been healthier when it was all sorted out? Were these financial groups too large to fail, or is that all wrong?
Can you guess why we are all confused by this? Apparently even economists do not agree about this? Our politicians are as divided as we are. It is clear that we can only choose one path to repair our economy at a time. We could have had three years to see if the Democrats had a good solution, but we could not because our House of Representatives was opposed to these approaches. Now we are asked to try the Republican solution, but we are unsure whether that is the approach that will give us the best economic results. So we will sit at the spot where the two paths diverge and do nothing and we will hope that the best solution is to do nothing new and let the knots in our economy work themselves out.
We really have little choice right now, but it is difficult for those of us who agree with the Democrats ideas about jump-starting the economy because it looks like the Republicans will get to try again with an approach that Democrats and I believe has already been tried and which has failed. And to Democrats it looks like Republicans have accomplished this by being “poor sports” and ideologues and by using extreme stonewalling tactics. There is a lot of anger behind all of this. Republicans are angry because of the “high-handed strategy” that Obama used to pass the Affordable Care Act. They are still so angry about this that they cannot be trusted to be objective about the plan. The Democrats are angry that the Republicans have used their “pit bulls” to scare people into believing that if they don’t vote Republican America will never be the America we know and love again.
We the people have lined up behind the party of our choice and we find that we are divided into almost totally equal camps. Are we going to let the Supreme Court decide our election once again? We are in the position of being damned if we do and damned if we don’t (in other words, neither party can really satisfy a majority.) We chose Obama in 2008 and then we got scared and sent the Tea Party to Washington to stop the Democrats cold. Chances are we will stop anyone who goes to Washington from going down either economic path, because we don’t know which plan is better. There are experts who attest to each path. We can’t really go down both paths, although we could perhaps choose a middle path.
Does anyone have an argument so compelling that it will help us make the most effective decision? Is it just a case of an economic cycle that will probably work itself out no matter which path we take? We are trying to solve global economic issues with kitchen table economics. Republicans are so passionate in their belief that they know what to do. Does their passion mean they are right? I just don’t think so. Whatever they are saying right now, they are the party that wanted to dismantle and/or privatize the social safety net. They don’t believe in climate change. They don’t believe that our planet is experiencing any environmental problems. It is difficult to believe that they have the correct answer on the economy when they seem so clueless in these other areas. Anyway, if you are an economist and you have been down that other path in your mind, please share the journey with us, the economically challenged.