Who's to Blame for the Brave New Economy?

[marmar]

from The American Prospect:



Who's to Blame for the Brave New Economy?

Are we all complicit in the erosion of economic stability in American life? Or are corporate and financial elites the culprits? Our resident Roberts -- each of whom has authored a new book on the political economy -- argue the responsibility question.

Robert Kuttner and Robert B. Reich | November 5, 2007



Prosperity Squandered
Robert KUTTNER



For three decades, the economy has increasingly become more unequal and more precarious for ordinary people. During the same period, risks that used to be absorbed by large, stable employers or social programs have been transferred back to individuals and families.

Meanwhile, the financial economy has become steadily more speculative and corrupt, as insiders, often with severe conflicts of interest, extract wealth from the real economy. The dot-com bust of 2000-2001 was the result of those conflicts -- accountants who were supposedly guardians of honest books colluded with management to pump up stock values and deceive investors; stock "analysts" compensated on the basis of their success in duping the dumb money.

But no sooner did Congress pass a mild corrective measure in the Sarbanes-Oxley Act of 2002 than the scams mutated into new forms. Unregulated hedge funds and private equity companies took excessive risks with borrowed money. Mortgage companies did end runs around lending standards. As this article goes to press, the credit crisis is already the most serious since the Great Depression with the Federal Reserve acting as enabler -- and it remains to be seen how well the broader economic effects will be contained.

In my book, The Squandering of America, I demonstrate that the increasing economic insecurity for ordinary Americans and the increasing financial risks to the entire economic system are two sides of the same coin. And the coin is the deliberate dismantling of the mixed economy, with the complicity of many Democrats as well as Republicans. This process is not only bad for broadly shared prosperity, but bad for economic efficiency and the stability of the system itself.

Even today, the hidden depression of flat or declining living standards is not a major topic of political debate. Too few politicians are serious about re-regulating an unstable and unjust market economy.

Why does market fundamentalism still hold sway? ......(more)

The complete piece is at: http://www.prospect.org/cs/articles?article=whos_to_blame_for_the_brave_new_economy

[A wise Man]

1. In other words....."WE ARE SCREWED!"

[fasttense]

2. Don't blame me I never believed that "free trade" bull crap.

Reagan had gone off his rocker before he got to fully implement the crazy neocon plans acted out in South American countries like Pinochet's Chile. But he made sure to start it before he totally forgot he was President. Then bush 1 came along and ignored the idiotic Friedman. Clinton kind of went along with the neocons and then came bush 2. The bush currently in office is 100% behind the neocon plan beautifully acted out in Pinochet's Chile. Friedman, the neocons and their idiotic bribed political leaders are responsible for this wonderful economy.

Free trade means no regulations, no morals, one big free-for-all (except for the liberals and the middle class). Just like in Pinochet's Chile the liberals and the middle class have to be silenced in order to complete the implementation of the neocon wet dream. But just as in Chile, it all ends with the economy crashing.