Blog #4 -- The Present Situation

BLOG # 4

Though it may seem odd, the present economic situation was not a necessary one, even though the United States has been declining partly on account of the rise of other economies since 1960, a long and irresistable process.

The key point was the election of 1980.  The nation reversed field and went in another direction, antagonistic to the Welfare State, which was mirrored by politcs in Great Britain, which signalled a decline in that state also. 

The election of Ronald Reagan to the presidency marked a great downturn, not because he was a poor actor, or because he was indifferent to principle and truth, and not because he was already feeling symptoms of senility.  The most important fact about him was that he was a motivational speaker of long duration, and no one should ever vote for a person of that type, and the reason for that is that they start to believe their own sickly smooth nostrums.  A second reason was that Reagan had been in the pocket of the rich folk for decades for years, where he was quite happy to be, having overthrown and betrayed his colleagues in the Actor's Guild during the McCarthy period. 

Here is the reason for the belief that paying attention only to the rich is bad for the economy.  Remember, the key to development and economic prosperity is always, in developed economies especially, effective demand.  The rich can never have effective demand at their disposal, since there are so few of them, by definition.  They rich have almost all the levers of economic power, but they basically ride on the back of the ordinary worker, the ordinary consumer.  So, though high unemployment rates are always bad for wealth creation, the rich love high unemployment, because, first, their wealth does not come form being at work, and, second, because the one most important thing that the rich want out of the market is the elimination of unions.  Generally, high unemplyment weakens unions considerably, and that is the name of the game for the rich, who often as not are merely parasites on the economy. 
Reagan, who mainlines rich folk's rhetoric, did not need to be told.  There is a lot of luck in politics, and when Reagan was sworn in to the presidency he had laid upon his doorstep a golden opportunity and he took it.  A nationwide union, the Air Traffic Controllers, went on strike for higher pay.  Reagan immediately fired them all and used militray traffic controllers to carry on with airport safety.  This, despite the fact that the union he killed had endorsed and campaigned for him.  Another treachery on the way to the top.  He had the model of Calvin Cooledge before him, who had fired all the police in Boston for going on strike in the 1920's.  "No one has the right to strike against public safety, at any time or any place," Coolidge had said, and Reagan followed in his footsteps, in this and in so much else.
Reagan did have charisma, and that is why he was loved, and is still loved today.  But that fact, in this case, was bad for the United States of America, because he was able to dismiss his critics with a joke and a wave of his hand.  The very people who suffered the most from his aberrant economic policies werre his greatest defenders.  By the way, Hitler benefitted in the same way from the destruction of labor unions in 1933, and the workers there generally admired him. Hitler had charisma too.  Charisma is no sign of ability or care for the common good. 
Immediately after he came in, the economy fell into a little depression.  Over ten percent unemployment, something you don't hear about these days, and one does not have to wonder why. In effect, the 1920's was the desired model for Ronnie Reagan, so it is proper to say that the 1980's were a replay of the '20s. 
How to distract the workingman from the crappy economy?  Well, here again instinct played its role: war is the answer to domestic disaffection, as every dictator knows, and even Aristotle taught this.  A strong buildup of the military will help the unemployment numbers, and a very vigorous, even bellicose foreign policy will also assuage the feelings of the common man, who like all common men is nationalistic.  And that is what Reagan did.  Having never served in the military, he wanted to prove how tough he was by engaging in lots of little invasions, where hardly anyone could get hurt, just like in Hollywood.  Teh common man admired him for that also.
As a result of all this, the rich got a lot richer and the poor got a lot poorer in the decade of the 80's, and with only his smile and his shoeshine Reagan pulled it off.  Most of his reputation for accomplishing good things was undeserved.  For example, he is creditied with the disarmament agreements with the Soviets, and sometimes also with the fall of Communism in Russia and Eastern Europe.  These ideas are wholly wrong, and arrived at only by a process so contorted that they could never be true.  I would be eager to discuss this last statement with anyone who cares to dispute it, but I offer here the real reason for these welcome developments: it was Gorbachov who caused these things, which were most welcome in Europe especially, since the peole there assumed that any war between the US and the USSR would be fought on their territories, and with nuclear weapons. 
Meanwhile the United States has become a militarized nation in-waiting, and I do not feel anguine about the American democracy surviving the assaults from the side of the rich, or the possibility, not so apparent right now, of a military coup in this country. 

Blog #3

BLOG #3

In earlier blogs an thumbnail economic history was provided in order to set the stage for an explanation of the present situation we in the USA are in now. 
After the New Deal and World War II, America, virtually unharmed by the war in comparison with other nations and strengthened mightily by the tremendous productivity shown by the inudstrial might of its economic modernism and the work ethic of its people, was indeed on the top of the economic heap. 
Unions had grown very strong in the war years, and everyone wanted life to return to "normal" since the years of war had brought stress and deprivation.  This yearning for normality showed itself in many ways, for example in the "baby boom" that lasted from 1946 to about 1960.  With respect to unions, I have already mentioned the Taft-Hartley act of the late 40's, which was a way of lessening their power.  But, all in all, the fact that everyone who had eyes could see that the great corporations were like governments, planning for the far future, using new technologies, and oftentimes literally owning the very town in which they were situated. 
The two great conglomerates in production process and therefore of prosperity, unions and corporations, "coutervailed" one another (a phrase from John Kenneth Galbraith) and prosperity and labor peace were the results.  A feeling came over the economic writers that an era of labor peace and soaring prosperity would be a permanent condition. 
But, there was another shot across the bow by the Republican Party in 1964, when Barry Goldwater, scion of a very rich family in Arizona, was nominated for president with the slogan of rolling back the Welfare State. 

At this point there was a great desire to stop communism in Latin America.  Castro had come into power on the first day of 1959, and the Kennedys had bent their energies to assassinating him, to no avail.  But in 1964 the government of Brasil was overthrown by the army, who stayed in power for over 20 years, and the race to overthrowing governments all over the world got into high gear.  Actually it had begun in 1948 with the purchase of the election in Italy for the Christian Democratic Party, but that was Europe.
The point of the overthrow of various elected regimes in Latin America was a gross form of hatred for democracy, and the installation of military dictatorships was something that the citizens of the USA would never have tolerated here in their own country.  The details of all this disgusting history are contained in the excellent book by Naomi Klein, recently published, entitled The Shock Doctrine.  These coups were committed to preserve a medieval economic structure, with Kissinger playing the role of God, approving every bloodbath which occurred under his watch, from Chile to Indonesia.  But this ten year exercise in overthrowing governments had an unexpected outcome, which was the foisting on these nations the laissez faire doctrine of Milton Friedman, perhaps the most primitive economist who ever lived.  The gist of his thought was: break down economic structures like unions and large corporations and let the markets reign! 
Enter Ronald Woodrow Wilson Reagan, stage right.  The great turnaround of the economy was about to begin, with the rich getting fabuously richer than ever before, workers' combination such as unions being destroyed by various and sundry means, and those in the bottom third of the income ladder and wealth ladder becoming significantly poorer every decade until the present day.

Blog #2

99 percent of everything you think you know is pure manure