Ray Carey, author of "Democratic Capitalism: The Way to a World of Peace and Plenty," writes we have been wrong to blame the current economic disaster on capitalism. Instead, we should look to the misdeeds of the money managers and traders who used the peoples’ capital to speculate. He correctly points out these people are and were not capitalists and they perverted capitalism for short-term and individual gains. What he didn’t mention was the overturning of the Glass-Steagall Act of 1933 by the Newt Gingrich Congress of 1999 allowed them to do that.
Carey says capitalism is the peoples’ trillions of dollars invested in companies that produce and distribute goods and services while creating jobs. He writes, “Wall Street deflected this capital away from job growth exactly as Adam Smith warned that the ‘prodigals and projectors’ would do."
We should be furious with ourselves for electing people who allowed this perversion of capitalism and promoted the duplicity involved with spending trillions on the banks for even more speculation instead of requiring the investment in real capitalism in the form of jobs, goods and services. The Federal Reserve actually provided more than $7 trillion instead of the stated $700 billion Troubled Asset Relief Program money to the banks. The banks borrowed this money from the Fed at rates as low as 0.01 percent while raking in $13 billion (so far) by investing in government bonds.
The real scandal is that for about 25 years, shareholder capitalism has sacrificed job-growth programs for the price of the stock, thereby building an enormous cash surplus from job layoffs. There is $1 trillion of corporate cash surplus in the domestic economy, with another $1 trillion abroad, about $3 trillion left in 401(k) savings and $1 trillion above required reserves sitting idle in the banks for lack of borrowers, or perhaps lack of lending motive.
Carey concludes: “If our government had applied some of the energy and creativity in putting people back to work that they applied in putting the Wall Street speculators back in business, our economic crisis would be over.”
I think it is for a more sinister reason we are experiencing this global financial upheaval that threatens capitalism and the global economy. Beginning in the early 1980s, the political movements to deregulate everything created career politicians who supported corporate/banking America.
Now elected officials depend on the cash that comes from lobbyists, PACs and other groups that fund campaigns. Finally, the 2010 Supreme Court’s Citizens United decision allowed corporations and banks to fund elections and candidates with no constraints, thus opening up the vaults to literally buy influence and politicians. Before that final blow to the power of the people, there was creeping deregulation of business, industry and banking. One by one, the watchdog agencies were cut.
Stealing has become very sophisticated. Legalized speculation with other peoples’ money and without their permission is stealing on a global scale, and we let it happen.
Perhaps we will regain our senses in 2012 and replace the government of Wall Street employees with people who represent “We the people” instead.
Turner is a retired teacher and industrial engineer who lives near Marble Falls. He is an independent columnist, not a staff member, and his views do not necessarily reflect those of The Tribune or its parent company. "The Voter’s Guide to National Salvation" is a newly published e-book from Turner. You can find it at www.barnesandnoble.com/ebooks. He can be reached by email at firstname.lastname@example.org.