EMAIL SIGN UP!
Most Popular This Week
Popular content
Today's Top News
Will Obama Reboot Capitalism Anew?
A hundred years ago, Republican President Theodore Roosevelt tried to reign in some of the most toxic behaviors of capitalists that he found incompatible with modern democracy by pushing through congress a law that banned the practice of corporations giving money to politicians. He slowed down the robber barons a bit, but three consecutive Republican presidents in the 1920s led us straight into the Republican Great Depression.
Franklin Roosevelt, his distant cousin, rebooted capitalism in the 1930s, ushering in an era of regulated capitalism - embraced by Republicans like Eisenhower and Democrats like JFK - that brought us the largest, strongest, and most stable middle class ever seen. We also became the world's economic superpower, as the world's largest importer of raw materials, exporter of finished goods, and banker to the world. We imported iron ore and exported televisions and cars and washing machines. The rest of the world was in debt to us. A worker with a high school diploma could find a job that paid enough to raise a family and have a safe and comfortable retirement.
The Reagan Revolution of the 1980s was the third "rebooting" of capitalism in the 20th Century, and continues to this day. Scorning the "regulated" part of "regulated capitalism," economic Reaganites from the Gipper himself to GHW Bush to Bill Clinton to GW Bush flipped our economy upside down. Today, after just thirty years of "free trade" and "right to work" and other oxymoronic nostrums applied as policy, we've become the world's largest importer of finished goods and the world's largest debtor. We now export minerals to Asia, and import back from them televisions, cars, and washing machines.
So now the big question: Will Obama reboot capitalism anew? Will he move us into a new realm of capitalism, back toward regulated capitalism, or continue the slide toward a poverty-ridden Dickensian economy that Reagan started?
At the moment, nobody knows.
Reagan began the war on working people when he busted PATCO in the first year of his administration, and then began the process - largely uninterrupted right up to a few months ago - of dismantling the protections organized labor had enjoyed since the New Deal. When Bill Clinton totally abandoned the national industrial policy that Alexander Hamilton had put into place in 1791 with NAFTA, GATT, and the WTO, we made the shift from a "Made in the USA" to a "Do you want fries with that?" economy. And the near-total deregulation of the commodities (including energy) and financial sectors begun in the last years of the Clinton administration and put on steroids by Republicans during the GW Bush administration led to a shift from a "Do you want fries with that?" economy to a "How much would you like to borrow from us?" economy.
Now the manufacturing jobs are shipped overseas, and we're left with lousy jobs and maxed out of credit cards. Many of the few manufacturing jobs that will be created by the Obama stimulus plan will be done in American factories, but the profits will go back to Denmark, Japan, Norway, and other countries whose "green" companies are buying or building our manufacturing facilities.
All of this seems just fine with the Summers and Geithners of the world, and many of the Democrats who rolled over in the face of Republican opposition to the "Buy American" provision that was thus and then removed from the Stimulus bill. "Cheap credit" seems like a goal rather than a warning. And, tragically, several democratic senators have already signaled their fealty to the Robber Barons by refusing to endorse the Employee Free Choice Act.
One can only hope that - like the Obama reversal on the possibility of prosecution of Bush war criminals - our new president will change course and take us back to a "Made in the USA" economy. Like Franklin Roosevelt famously (and perhaps apocryphally) said, perhaps Obama is waiting for us to pressure him to "Make me do it."
- Posted in
Comments
Note: Disqus 2012 is best viewed on an up to date browser. Click here for information. Instructions for how to sign up to comment can be viewed here. Our Comment Policy can be viewed here. Please follow the guidelines. Note to Readers: Spam Filter May Capture Legitimate Comments...
64 Comments so far
Show AllObama needs to embrace his own rhetoric. Gather some strength and create change we can believe in, not this timid go with the corrupt flow he is espousing now.
Obama either 1) doesn't understand the problem, or 2) is too corrupt to fix it.
Two key industries that need drastic reform now if there is any hope of the economy picking up are the 1) financial industry, and 2) health care system, both of which are out of control. To date Obama's actions are enabling these industries to be more corrupt and out of control than they were when they created the economic meltdown.
the financial system and the health care system are one and the same under the existing hegemony of for-profit insurance corporations---which as you correctly observe are out of control.
or 3) Political conditions will not allow it (he'd become an impotent Carter); or 4) Obama is charting a moderate course of reform.
Have you heard the shrieks from the right? What do you think would happen if he banged a hard left like many on this board would like (and I would like too)? I think Obama, a Progressive himself, has the sort of respect and understanding for democracy that he will not completely shut out a large portion of the country. He is not Bush, who had no use or respect for the opposition. Obama is attempting a more measured, incremental approach. He does not want to cause serious unrest in this country.
Obama is getting heat from both ends. I dare say he is getting a lot more heat from the right. We need to turn it up.
13 to 1 Thom.
13 Trillion so far given/promised to criminal bankers.
1 Trillion (approx) given to we the people as economic stimulus.
In an economy where the GDP was 72% based on consumer spending does this ratio seem right to you?
If the President were serious about economic recovery (rebooting capitalism) wouldn't he have demanded these numbers flipped around?
Obama appears out of his league when it comes to economics.
He's getting rolled by big time by Summers, Geithener and Bernanke.
Great point on the ratio between bailout and stimulus. I don't think I've seen it put that way before. As far as "getting rolled" by Summers and co., I think Obama is, pardon the pun, thick as thieves with these guys. I hope I'm wrong.
The last comments Obama made about the economy he appeared to be reciting lines that had been drilled into his head.
It didn't appear to me he particularly understood what he was saying.
Nor did it appear that he had sought other points of view.
On constitutional issues I will not cut him an inch of slack: HE'S COMPLICIT.
On economic issues we'll have to wait and see if Obama is naive, stupid, criminal or cowardly.
We'll just have to make him change it, or find someone else who will. To do that we will have to make it clear to people exactly how they're being ripped-off, and exactly what needs to be done to stop it.
"Today, after just thirty years of "free trade" and "right to work" and other oxymoronic nostrums applied as policy, we've become the world's largest importer of finished goods and the world's largest debtor."
As such, it would seem that the Washington/Wall Street motto is:
Ask not what you can do for your country - ask what you can do for its corporatists!
That would include TARP, TALF, and all the other recently engineered forms of theft for "the good of our country?" and its grossly imbalanced globalized trade policies to support the financial portfolios of international corporatists.
The betrayal continues.....
"Will Obama Reboot Capitalism Anew?"
He will try and the attempt will fail. The American working class is too tired and over its head in debt and the American business class is financially and morally bankrupt, thoughy it $till has enough power to enforce its insane will on the rest of the country.
American capitalism is a flawed system that deserves to fail and be cast on th ash-heap of history. It won't happen tomorrow, next week, or even next month, but when it does happen it will be rapid, dramatic, and irreversable--and good riddance too.
Poet
Nice post.
v.purto
"The American working class is too tired and over its head in debt and the American business class is financially and morally bankrupt..."
----------------
Cannot be said better. Besides, American working class, including relatively highly paid engineers and IT professionals, is so disunited and brainwashed by inceasant propaganda, and, gold-chained to their houses, has so much to loose, that when collapse does happen it will be a big splash.
I personally think that the size of cathastrophy is known to our fuhrers and they are scare to death much more than we think. This is the only explanation I see in paradox called Obama.
and just think--like women are always taking the fall for the good old boys, a black man will be blamed for fall of empire.
Hey, you never know, history has a strange way of twisting back on itself--maybe some day he will be seen as the great (unintentional) liberator.
Sioux Rose
VERN: Interesting perspective.
If Europe and Asia developed the green technology that we need to launch the green revolution, I have no problem paying for it. Playing catch-up is not the way to develop technology which is so vital to the future of the US and the world.
Many times, in the past, the government has worked with private industry to solve "urgent" problems. Virtually all manufacturing was converted to wartime production (WWII) in a relatively short period of time.
The atomic bomb, the rocket delivery systems, the space race, the internet and countless other technologies (good or bad) came from "crisis"
There is a lot of technology that is being developed or encouraged by the military and the government.
GPS technology, photonics(lasers), nanotechnology and the use of catalysts for clean energy are just emerging. They must be stimulated - quickly
If "Detroit" is closing down, buy the foreign talent needed to retool for the future. We have trillions of dollars to spend on usary; why not channel it into the purchase of technology (patents, expertise)
And why not have partnerships with other governments? If China wants to put in 50% of the money, to buy expertise and develop new industries, they can get 50% of the profits. Or Iceland...or South Africa.
Since we are printing the money, we can buy whatever we want...Let's buy some good stuff for the future, for a change.
Dear Mr. Hartmann:
"Reboot[ing] Capitalism", is in fact, the problem, not the solution. It is often said that F.D.R. saved Capitalism from itself, and protected the ruling class from a revolution from below. FDR's "reboot", only ensured that a crisis like the Depression would resurface again when the ruling class were able to finally cast off the regulations cramping their style. We should not reboot, rather we need to change the Operating System. It's time to say no to T.I.N.A. ("There Is No Alternative" (to capitalism)).
Nope.
His model is Clinton--so expect more of the same until we enter the dark ages of empire.
And that you can take to the casino and win.
...already entered the dark age of this empire.
"So expect more of the same until we"...stop blogging and take to the streets as the CITIZENS of Europe do. The oligarchy knows Americans will be complacent.
Franklin Roosevelt, his distant cousin, rebooted capitalism in the 1930s, ushering in an era of regulated capitalism - embraced by Republicans like Eisenhower and Democrats like JFK
I remember my father constantly complaining about Eisenhower when I was a kid, yelling "forrrrrrrrrre" whenever he saw him on television. Ike looks pretty good now . . . for a Republican.
Excellent Essay Thom. I like the way you frame the pressing questions of the day in history. I believe that President Obama CAN reboot capitalism... if we all help.
Apparently, "Instant gratification takes too long", for many of the readers here.
While Obama is piling sandbags on top of the levee to keep the river from engulfing the town, they're demanding that he tear the levee down and rebuild it from scratch. Lord knows, we need structural reform in the economy. But first we have to deal with the present emergency.
If gasoline supplies dried up the way credit has, would we want the government to build a brand new chain of gas stations - or put oil into the existing infrastructure of refineries, pipelines, tanker trucks, and retailers?
My job is hanging by a thread because my boss can't get a business line of credit to help with payroll. His business is hanging by a thread because our clients can't get construction loans.
The Revolution is going to have to wait until Obama's second term.
"The bailout is going to make financial serfs out of the whole population, & might well lead to a catastrophic inflation, and/or collapse of the dollar."
That looks more and more likely. And since the finance fiends have completely captured the government, they will just add extra zeroes to their accounts, one way or another, while the rest of us become paupers. I suspect there will be a few openings for capable and talented sophists to explain it all to an angry public, given the historical precedents involving guillotines and such.
Ruinous inflation is the best bet . . . followed by armed insurrection in certain locales. It is not just the violent and paranoid right that will decide it has had enough. Many ordinary people will snap completely once their life savings have been totally wiped out and they lose their homes, etc. You can count on it. Barack Obysmal, aka Sigmund Fraud. The joke is monstrous and it's on us!
I recently saw an item about some right-wing loons hoping to organize a million militia man march on Washington, where the marchers plan to be armed! I think what we need to do is to convince the right-wing loons that their greatest enemies are on Wall Street (difficult, but not completely impossible given that it is true) and that is where they need to march. Then maybe the banksters would stop laughing at the joke, that joke that is on us. I can dream, can't I?
"My job is hanging by a thread because my boss can't get a business line of credit to help with payroll. His business is hanging by a thread because our clients can't get construction loans."
The above quote pretty much sums up why the majority are so afraid of revolutionary change. There is still too much for them to lose...
.
.
.
"In the midst of discontent, talk, theoretical discussions, an individual or collective act of revolt supervenes, symbolizing the dominant aspirations. It is possible that at the beginning the masses will remain indifferent. It is possible that while admiring the courage of the individual or the group which takes the initiative, the masses will at first follow those who are prudent and cautious, who will immediately describe this act as "insanity" and say that "those madmen, those fanatics will endanger everything". They have calculated so well, those prudent and cautious men, that their party, slowly pursuing its work would, in a hundred years, two hundred years, three hundred years perhaps, succeed in conquering the whole world..." --Kropotkin
.
.
.
While we wait for the 'prudent and cautious' blue party to slowly pursue its work, we allow ourselves to become debt slaves in the hopes of preserving the status quo. Even worse, some people are able to overlook the fact that the blue party already sold themselves out a few decades ago. But, God dammit, they say... we must stop being cynics and pessimists and fall in line with the rest and HOPE for the best.
One should note that the only politicos capable of taking on the robber barons are their neighbors – Roosevelts and Kennedys – because they do not require the largesse of Wall Street to run campaigns. In order to become serious candidates, all others must pass through the hidden primary, available by invitation only, where they swear their allegiance to the elite and their businesses. Overthrowing capitalism cannot occur by electing a new president and I do not know of any members of patrician families who would even want to defy their neighbors in political office. We are forced to await someone of a mischevious and stubborn character who considers politics a hobby.
Trade doesn't always have to be a bad thing but when it's misused for backdoor slave labor, then it is no longer capitalism but slavery. What TH also forgot to mention is what we are mistaught in life about buying and selling. We are taught that whole-sale volume-sale is "good for the economy" while being taught to write off or even demonize product quality because somehow it cannot generate enough profit. For example, let's say that I am selling a high quality product for $20 but it lasts for 5 years while a competitor is selling an inferior version for $10 and it doesn't last for more than a year. I sell 1 or 2 while he is selling 5. One customer buys my $20 product and it lasts for 5 years. Another customer buys the inferior version from my competitor. 1 year later, assuming its best, he comes back for another one. So in 5 years, that customer who bought from the competitor ends up spending $50 in the same 5 years. Because I'm not expected to make a high profit compared to the one selling the "cheap" version, I will be considered a nobody as far as the "economy" is concerned. The person spending $50 is considered as "contributing to the economy" while the frugal one who bought my product is left out or even blamed for the recession. I know that there are other factors to consider but even those factors do not change the indisputable fact that whole-sale-volume-sale madness is completely destructive. Now, let's apply that to "free" trade over fair trade, wars for oil instead of alternative renewables, quality labor vs "cheap" slave labor, etc ... While on the surface, whole-sale-volume-sale looks artificially "good", what the weasels don't want you to understand are the long term damages and costs that will follow. No economics or finance class that I have heard of will ever teach students that dirty rotten secret.
JenniferBedingfield
"Trade doesn't always have to be a bad thing but when it's misused for backdoor slave labor, then it is no longer capitalism but slavery"
Fair trade is good foe everyone involved, but you put your finger on the current trade problem. Exactly in the middle of it. "when it's misused for backdoor slave labor, then it is no longer capitalism but slavery"
And the real damage as you pointed out recently as others do is the loss of jobs. No jobs, no nothing. You end up on the dole.
Speaking of jobs, isn't it amazing that back in the days when product quality mattered more than quantity for profit that unemployment wasn't as bad compared to the last decade? I know the 80s and 90s had their share of putting quantity over quality but this decade pretty much exposes the fatal flaws of the misnamed "free" trade scams. Every time something breaks and I find that it was made in China, I keep getting that haunted feeling about the events about slave labor in that country. And despite all that supposed trade surplus China got from our "cheap" electorate, I hear that the country's economy keeps collapsing from time to time. It will be interesting, well scary, to see what happens when China's done lending us money like mad.
Will Obama Reboot Capitalism Anew?
It depends on who has his ear, or balls.
Will Obama Reboot the Capitalist Idealogy? He's trying. That's what the Democrats are all about.
Will Obama Reboot Capitalism Anew?
I t _ p a r t l y _ d e p e n d s _ o n :
Who he BOOTS, off the wall-eyed St's raptor roosts
Where he puts the BOOT ( a ' hem )
If de-CAPITATIONalism can re-grow a moral HEAD
If Cranial anal inversion, can be reversed
Do we really want to "reboot" capitalism? The post-war period that Hartmann always speaks of so glowingly, led to the frenzy of consumerism and mass production of junk that has nearly destroyed our environment AND the economy. It's time to think of more long-term and rational solutions.
Right, and it was all downstream then, as virtually all the other major industrialized economies had suffered catastrophic damage from the war and US manufacturers had weak competition. Now it is upstream, against a strong current, with a decimated manufacturing base, and it does not look so easy.
blessthebeasts/kivals
"Do we really want to "reboot" capitalism?"
Yes we do. I believe the period you spoke of really didn't take flight till the 80's. Thats when the indulgance started as I remember it.
The post war period was a great time.....not too much spending, little debt except for a house...not the palace's built these days. Expanding economy but not at the expense of the American worker or citizen.
When you look at all the infoemation, our enviornment is not in near as much danger as advertised (my conclusion...everyone is welcome to their own)
The porblen arose when the Captains of Industry decided they were not average mortals and their needs and decisions should be paramount. Much the same hapopened with our educational elite. The numbers are there for anyone that cares to compare.
As Kivals rightly points out, in the post war period Mickey Mouse could have run a fortune 500 company and couldn't have messed it up.
There is nothing much wrong with the system, the problem begins with the folks both left and right that have perverted things to suit their own agendas rather than the needs and welfare of their own nation's citizens.
That is what needs to be fixed in my opinion.
And Kivals is again right, the competition is there now and trying to compete in the world by allowing your country and another country to be robbed under trade traties like NAFTA is not a good way to start. Or failing to put financial safeguards back where they belong.
I'm sure from your white-bread perspective the post-war period was a great time. And the environment's not in much danger? Go ahead--keep kidding yourself.
Darn, I forgot you have a problem with White people. I was speaking of the economy...just the economy.
As to the enviornment, there simply isn't any proof that climate change is causedby Man and there is certainly no science that is credible that even if it was there would be anything anyone could do about it. No science at all. And I don't consider models scienceas they are so fallible. As I said above, that is my conclusion, you are welcome to your own.
Come Thomas, no science at all?
You mean the mass consensus of scientific associations of the world on anthropogenic global warming contains - in your words - "no science?" I'll grant you that it is not as conclusive as the Pythagorean theorem, but I think by making such an absolutely delusional statement, you have confirmed in the mind of every rational thinking poster here on common dreams that you are a complete irrational loon. No science at all? No proof at all? Wow.
I wasn't referring to White People--I am one. I was talking about the culture of consumerism, convenience food (white bread for instance), and rah-rah, the USA can do no wrong which arose after World War II. I should have known you wouldn't get it.
The environment had a big problem in the 50's into the 70's, polluted water, sooty air, trash, chemical waste. We were like China is today. But the environment is much better now, maybe because we moved our manufacturing to China, which is one reason our economy is bad.
Of course there is the CO2 myth that CO2 is going to turn the planet into a green hell, maybe thats what you are referring to. If you believe this, my sympathies.
(post deleted because I violated my own self-imposed rule to try to be polite whenever possible)
Re Green-is-Red April 24th, 2009 3:19 am, who claims
"But the environment is much better now, maybe because we moved our manufacturing to China, which is one reason our economy is bad."
Good thing for the USA that pollutants respect national borders, eh?
Capitalism contains within it the seeds of its own destruction. Despite your willingness to don rose colored glasses and see the past as a desirable place, it was already sowing the seeds that grew to fruition these past few years.
Your glasses are also useful to see no looming environmental disaster, yet the majority of scientists disagree with your assessment. Im going with science. Not only does environmental protection become a way to save our species it also contains within it the path to a new and far more equitable economic model.
The gap between wages and production has become way too big to ignore. And, of course, corporations keep the spread and then waste it on bonuses and such rather than shore up their own books. We see this dynamic in a lot of sectors of the economy; most notable in the criminal financial markets. In a broader context, and by a default position, we should hope to see many trillions more go to bailing out the top. In this way it will bankrupt the government completely and - finally - allow the people the level of equality our Constitution intended. Not ideal but history seems determined to repeat itself.
"History repeats itself, first as tragedy, second as farce."
Karl Marx
The fault (faults) in America's banking system are easily traceable..and correctable. We at the American Peasant are not hopeful that the slogans being offered by Federal Reserve lackeys will be helpful. If one looked at the problem through a prism which included the class warfare elephant in the room, then one might be able to see clearly through the delaying actions/propaganda being shoveled at us. If we American peasants live like Mexicans, as we very well, in the near future, it wouldn't change how Bernake lives his life one whit.
Will Obama Reboot Capitalism Anew?
The only capitalist boot around is the one George Orwell talked about, smashing everyone's faces forever.
That boot isn't only 'capitalist', it's 'communist', 'socialist' and just about every other '-ist'. With a debt-money system operated by and for bankers, all the '-isms' become 'monopolist', i.e. total control, total power ... totalitarian, as George Orwell warned.
I believe you are wrong. Socialism, Communism and Fascism are all about Monopoly Capitalism and Central government control and planning. The difference lies only in the execution and details. In all forms, the worker and non-elite is exploited and manipulated to serve the elite leaders.
Today we are about 40% socialism, 40% fascism (better named corporatism), 20% other. Corporatism involves governments unhealthy relationship with monopoly capitalists. Regulation is the way the created and protect monopolies (cartels).
Socialism is used for areas where there is not enough profit, like insuring the old and poor, thus protecting the insurance cartels who insure the mostly healthy population and at risk for a move to 100% national health care (single payer). The health care providers are also kept in the private domain and secure to charge what the insurance companies, government and private, are willing to pay from increasing premiums (in governments case from increasing taxes or debt). The high cost works in the private insurance companies favour because it is the crippling cost of medical care which makes people need private insurance. The higher the cost, the more people are willing to pay higher premiums for the insurance.
Also, the military is socialist and used by government to open up markets for monopoly capitalists and provide protection for their operations overseas, all while pretending to keep us secure from the enemy. Banking is essentially fascist, with government protection and corporate welfare for the banksters, ensuring the tax payer is on the hook for the losses, and the profits get booked by the monopolists.
The enemy is anyone not going along with the Global Empire being built via Globalization on behalf of the Global Monopoly Capitalists. The Global Government will be one giant Global Corporation with many divisions, and the Global Corporations CEO will be the Global leader of it's Global Work force, maybe called the Global President. There will be no distinction between corporate control and government control, they will be integrated into one entity. That my friend is Global Communism according to Marx. If you don't work, you don't eat, as Stalin once said.
Communism and Socialism was marketed to those as an alternative to Capitalism and Democracy. Both of the latter were discredited by the banksters who financed the Communist movement and used their influence to create depressions, bankrupt companies and control politicians and moved the economy toward Monopoly Capitalism.
FDR did more for Socialism and Monopoly Capitalism than any other President. He was the founding father of our current state of affairs, although Woodrow Wilson might be the grandfather. Wilsons chief adviser was Colonel House. House was a Communist and he was Wilsons Dick Cheney. Under Wilson, we got the Fed, and income tax, and entry into a war we need not have entered at the cost of 150,000 lives and a mountain of debt.
Monopoly capitalism = socialism and fascism, and they are just stepping stones to Global Communism. That's where we are heading, but they will call it some other -ism
I say good luck to obama if he really means to fix this financial mess, but his actions speak so much more than his words on this, and he may as well just be pissing in his boot since the financial and economic sectors are NOT about to give up what they are getting away with(possession is 9/10th of the law, for now). Even if he gets it turned around there is the unsustainable high % of growth that just cannot be sustained unless the population of humans is reduced to balance out the resources used and the renewal of those resources that are renewed. Then the question of another attack that can happen at any time the 'elite' really feel threatened.
But, as I said, if he really means to fix the mess, his actions so far for me pale in comparison with his rhetoric and that leaves me doubting just where his loyal really is. I still want to believe he will get something constructive done but I am running short as hell on belief.
Thom, you should know by now that a growth-based economy is not a real economy at all, but a major drain on resources and human life that eventually sends the majority into penury while temporarily lifting the boats of an ever-decreasing minority.
You should know that as long as Obama attempts to reboot this growth-based economy, nothing will happen that will make life better for the majority of people, and scarcity of resources will continue to mount.