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Home  At Length Tear Down This Wall
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Tear Down This Wall |
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Written by James Preston Allen
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Friday, 05 June 2009 |
The collapse of the Soviet Union at the end of the 1980s was unexpected by our best national security analysts. President Reagan in his best Hollywood role prophetically called for the tearing down of the Berlin wall, but didn’t really know what he was asking for, except that it sounded good on the news. And then it happened: Communism was defeated. My claim is that we just outspent them in the arms race and that the Soviets believed Ronnie could actually build the “Star Wars” defense system. The U.S. Military Industrial complex still hasn’t made “Star Wars” work yet after some hundreds of billions being invested, but the irony is that the Communists probably were watching the movie and figured that if we could put it on the silver screen the real thing wasn’t that far behind! Ha!
Oddly enough, we have been somewhat lost without our old Cold War adversary. We’ve had to keep inventing new evil empires to conquer in their absence. In my lifetime, it would seem that there have been very few years between the ends of World War II and now in which our nation hasn’t been at war. Some would argue the maxim, “war is good for the economy,” I suggest that this only true as long as our economy is based on war. I have been thinking lately that there was a certain symmetry to the balance of power during the Cold War, not unlike the checks and balances we have imbedded in our own governance by our Constitution. Communism checked the power of Capitalism. Since the fall of Soviet Communism, we have seen this unprecedented expansion of unbridled capitalism, even to the extent that the Red Chinese have become better Capitalists than we are! They now hold some 24 percent of our U.S. Treasury bonds and could without ever firing a hostile shot attack our economy by simply cashing them all in at once. Remember all war is economic. I don’t think that they’d do that just yet, but we might consider diversifying as the Chinese are starting to buy up gold.
It’s taken us nearly 20 years to figure this out, but as it now seems quite apparent that unregulated capitalism, unbalanced and unchecked, is probably just as bad as a dictatorship of the proletariat. For the entirety of my career as publisher, I have been inaccurately accused by a few misguided folks of being “a Communist” or “a Socialist” or some other kind of “ist” because I espouse social control over the evils of unregulated capital—as opposed to insider control—or what is mistakenly referred to as “the free market.” For the record, I am no more a Communist than either Teddy or Franklin Roosevelt, both of whom instituted controls over the capital markets by passing anti-trust, food and drug laws, banks and securities regulations, adopting labor reforms, and creating Social Security as a public pension fund. We have all now seen the unfortunate result of the unwinding of these historic economic reforms.
What I have come to argue over these last three decades is that the strength of our economy is derived from its tripartite nature—a nature that evolved out of the Great Depression. This tripartite economy consist of one third socialized government spending, one third capital investments, and one third limited free market entrepreneurship commonly called—the Main Street economy. The tripod of this economic model is superior to others simply because of its reliance on three sources of spending, and the check and balances inherent in the manner money is created and spent. The demise of our core capitalist foundation, the failure of some 30 banks, the nationalization of Freddie Mac and Fannie Mae and the exposure of the Federal Reserve to public scrutiny have only drawn new light onto the completely abstract nature of our monetary system. Who knew that the Federal Reserve Bank wasn’t owned by the U.S. government or how currency was transferred from the U.S. Treasury?
The collapse of the Wall Street investment firms, AIG and the others, which now include GM, should come as no surprise, but it does provide a curious punctuation to the era of Reaganomics (trickle down theories of wealth) and the free market analysis of Milton Friedman that have driven our conservative economists and public policy for the last 35 years. Friedman is now dead and as should be his idea that freedom and democracy can only exist in a free market place. We are now some trillion dollars in debt because of these inanities and it hasn’t done anything to preserve democracy. It has only done the opposite. What is even worse is the Obama Administration’s timidity at taking true ownership over these tanking enterprises and giving us real investment rights along with our huge bailout investments.
We should not be afraid to tell GM to build better, greener, and more affordable cars—or even diversify into bullet trains, wind turbines, and other forms of green infrastructure. We should not be restrained from breaking up corporations that are too big to fail and we should not resist re-regulating the capital markets and/or prosecuting the thieves who thought that owning a bank was the best way to rob one! We also should be very suspicious here in California as our latest, actor-come-Governor, Arnold, campaigns for cutting one-third of our economy via chopping off education and other social services on the premise that this will solve the deficit. One might argue that eliminating the office of governor would accomplish some of the same goal.
Lest we forget, he promised to solve the deficit problem upon taking office. But due to sheer incompetence or his intransigence, he has only caused it to deepen. In the end, cutting California’s budget will only add to the continued downward spiral of recession and create even more economic hardships on both businesses and citizens who will end up paying for it out of their own pockets. There is another way, but we may have to tear down another wall.
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