What type of economy does President Obama want to see raise from the ashes of our economic national disaster, and what has become an actual Code-Red national security risk? As Professor Michael Hudson has elaborated on in his Counterpunch.org articles, we have had a monopoly-debt-financial capitalist economy over the last 30-plus years. This debt-asset financial policy has slowly dominated and subverted our economy as it has forced down and away the only honest and productive way to build an asset-product-based economy, which is from the bottom-up. This can only be done by making things. Inventing new products, systems and technologies that will make this nation better, more energy efficient, productive, and restore our standing in the world.
A manufacturing-based economy, which is what China has fostered, is the only way to create a sound GDP. But, ever since President Carter’s presidency, making real things has been replaced by designing “creative” debt-asset securities and derivative vehicles to sell all around the world. This fraudulent scheme was a conspiracy fashioned by the nation’s smartest MBAs from Harvard, Yale, University of Chicago, and other well respected business schools housed within prominent universities which infiltrated government and spent years going through the revolving doors of Washington, lobby and consulting firms and the headquarters of industry designing laws and policies that favored the elites. These fraudsters were the best and the brightest who were employed by the most powerful financial corporatists that sat around the exotic hardwood conference tables in the various neo-con think tanks, and international power-body assemblies, such as the Council on Foreign Relations, the IMF, The Project for a New American Century, The American Enterprise Institute, The Heritage Foundation, and The Brookings Institute.
No doubt, within the underlying code-worded discussions, which focused on ways to exploit the world’s work forces by exporting manufacturing jobs to countries where work rules, environmental laws, child-labor laws, and work safety rules were to be exploited, and ignored and replaced, with a philosophy where citizen’s rights were less important than those of the industrialized nations. Cheap labor, and being union-free drove their code-worded conversations. How could the rich become richer was their rubric?
So, the smartest MBAs were directed to figure out ways to make finance the New Economy for the United States. It was the biggest snow-job sale’s pitch the world had ever been exposed to. We were told that we would have more leisure time, and be able to pursue all the personal pleasures we dreamed of. All we had to do was buy into this Ponzi scheme. And, very many did! They borrowed on their homes, took part of their wages, and used their credit cards. In other words, leveraged their “potentialized” wealth to buy into the Securitized Paper Magic Products, which came off in sheets, that took various debt-based instruments, such as mortgages, credit cards, consumer paper, tuition loans, car loans, home equity loans, business and corporate loans and sold interest-bearing debt obligations, which were given false AAA ratings by the insider rating agencies, and insured against loss by a bunch of devil-wizard companies, such as AIG, to build a monopolized financial capitalist economy. Now, AIG has spent taxpayer dollars paying off foreign investors who were caught up the credit default swap scam, as well as giving millions of hush money payments to keep their “Best-of-the-Best” from writing a tell-all book. We have been paying off as taxpayers the richest of the rich who made bad investment choices by believing in the world’s biggest Ponzi schemers. Yet, no one is bailing out the real economy workers who lost 45-50% of their retirement and over $8T in homeowner wealth. This is a Reaganomic Trickle-Down scheme, which caused the collapse in the first place. Obama and Geithner and Bernanke and the rest of Knights of the Team Obama Round Table believe that the richest of the rich should not suffer, should not get financially hurt, and should not take a hit, if they are going to jumpstart the economy by investing in it. As we know, they have never invested in the economy before, so why should they start now. They took their wealth and made money only for themselves. Only the working classes should take the hit, as they pay for the world’s biggest Great Escape! It was not unlike those magic rocks that we, as kids, put into water to supposedly make living things grow out of nothing. “Just add water, and you will be rich!”
For over 30 years we have been told that a monopoly-debt financial capitalist economy would be good for us. Monopoly referring to the mega-financial institutions that were able to convince a bought-and-paid-for Congress to pass laws allowing these big banks to merge together institutionalizing themselves into what has been coined “Too-big-to-fail” corporations. In addition to these monopoly companies, we saw our auto industry, food industries, utility industries, insurance, and real-estate, to name a few, pyramided into monopoly monoliths, which were able to lean heavily on our legislators through campaign contributions, and lobbyists with their pressurized arm-twisting methodologies.
Wealth grew for many and, especially, for those at the upper 10-20% of the income ladder. They saw their capital gains, revenues made from compounded interest payments, and/or dividends explode into paper wealth. These were the people that saw their Paper Magic wealth grow, whereby they could expand their trophy shelves with all kinds of expensive goodies. But the rest of Americans saw their jobs disappear, and their wages grow, at most, by 1% per year, if that. They had to borrow to keep up their stagnant or shrinking standard-of-living because the wealthiest of the wealth class were forcing up asset values on property, company share prices, and many other goods, services and products through inflation.
As working Americans saw their jobs shipped overseas through this monopoly-financial capitalist economy, the investment class got richer, especially those who could afford to extract their wealth from the growing Ponzi scheme before it caught on fire. As industrial developing nations expanded, the financial capitalists took their wealth and began to not only build factories overseas to make cheap stuff to sell at Wal-Mart, but build office buildings, shopping malls, turnpikes, shipyards, airports, rail stations, utility infrastructure and apartment/condominium buildings in the developing world. Then when it was to their advantage, they bought foreign currencies to offset the devaluation of the dollar, as former vice-president Cheney did, as well as stock shares of companies in the emerging market sectors.
All of this came at the expense of U.S. worker!!! The U.S. worker was the sacrificial lamb as the world developed into a very competitive force challenging the product-based capitalist economy of the United States. Corporatists, such as Bill Gates, and others, sought for the Congress to allow foreign workers to be given special status in order to further subvert wages by hiring them instead of domestic professional workers further eroding wages and our standard-of-living.
This has been a race to the bottom. The American worker was the expendable commodity in this Ponzi scheme. Today we cannot find enough jobs for newly graduating young Americans, especially those who have studied liberal arts, fine arts, and are pursuing other minimally marketable career choices made so by this economy. Even those who graduate in engineering, languages, business, and science will have as much trouble as carpenters, electricians, and plumbers when looking for work. The educated worker might actually be having a harder time, since their skills are exportable, while labors and tradespersons possess non-exportable skills.
The monopoly-debt financial capitalist economy is disintegrating rapidly. It was all a scam. It was a head-fake! A week or so ago, the DOW Jones was where it was back in 1997, and now it has returned to where it was before the big dive below 7000. There are no gains; there is no asset wealth boom; Americans were sold a bill of goods that ended up turning into Monopoly Play Money.
So, what type of economy does President Obama want to see rise from the rubble during his 4-year term? Now, if he wants to resurrect the product capitalist economy (Professor Hudson calls this the Mature Capitalist Economy), then he better get busy! Jobs are disappearing and may reach 800,000 per month in the coming months.
Bada Bing Bernanke, and TimmyG cannot stimulate the economy through monetary policy. It just won’t work. The creation of esoteric debt instruments, or taking a blowtorch to the frozen credit pipeline will do very little. What needs to be done is government investment into the funding of manufacturing jobs and industrial jobs that will build a new production-based capitalist economy for domestic and export production. This will improve our GDP, our standing in the world, the lowering of our trade deficit, and the lowering of our national and budget debts. It is so simple that President Obama’s daughters could figure it out.
If he were to ask Malia or Sasha the following question, what would their answer be?
If for some unfortunate reason an entire town burns down in a forest fire, how best would it be rebuilt? Would you use the dollars to directly hire construction workers, bricklayers, electricians, architects, designers, utility line workers, suppliers, and others to rebuild, or would you give the same dollars to banks so they could improve their balance sheets, while, at the same time, giving the bankers raises, and bonuses, so as to prop up their mega-financial institutions even though they were losing more than they are taking in, and made it very difficult to lend out the given dollars to those who needed to rebuild? Do we give it to those banks, which then in turn, might lend it out, or you might say dole it out, to the unfortunate townspeople, of their choosing, who need to rebuild their lives once again? Malia or Sasha, what answer would you chose?
No doubt, they will pick the first one. It is so simple that a child could easily figure it out. But, their father, and his Knights sitting around his Round Table feasting on the best food money can buy seems to have chosen the second answer. Look where has it gotten us! Further down the black hole, it seems. Yes, our health care system is a major problem for us, and needs to be fixed quickly. That is simple, too! Single-payer. Our military spending needs fixing, as well. Simple. Cut their budget in half. The daily damage is impacting upon us and penetrating directly into the labor side with disappearing jobs!!!
Through the restoration of jobs, building new manufacturing industries to rebuild America into an energy independent country, with a high speed rail network, insulating every single home in the country, establishing sources of local food production, efficient farming techniques, alternative energy grids, the allowance for farmers to save their own seeds from their own supplies, instead of our food supply being exploited and controlled by Monsanto, and there is more, of course, we would discover that the Treasury would be able to replenish dwindling tax revenues with new tax revenues, as well as our state and local governments seeing their coffer grow, at the same time.
I don’t think President Obama needs to spend valuable time meeting with bi-partisan committees and community groups, nor try to reassure and encourage us to stay calm through his radio and television broadcasts that we can endure through our resiliency, which will allow us to come through these terribly tough times as we have in the past. The Great Depression was a time we surely don’t want to relive as a result of bad policies. These rough times are not meant for platitudes, but for aggressive decisions and actions that may not be popular with the monopoly-debt financial capitalist royalists, such as the jihadi Right-wingers in Congress and the jet-setting corporate elites who contribute to campaign war chests. President Obama must embrace the populist agenda wholeheartedly; otherwise he may repeat the failures of the past.
Thanks for reading, jerry