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The Death of Reaganomics
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| The Death of Reaganomics
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| Fdubya247 |
The legacy speaks for itself, but most "conservatives" and other willing tools and thralls of corporatism/corporatocracy/American Fascism are still in denial....
The Death of Reaganomics
http://www.truthdig.com/report/item...of_reaganomics/
Posted on Jul 10, 2008
By E.J. Dionne
The biggest political story of 2008 is getting little coverage. It involves the collapse of assumptions that have dominated our economic debate for three decades.
Since the Reagan years, free-market clichés have passed for sophisticated economic analysis. But in the current crisis, these ideas are falling, one by one, as even conservatives recognize that capitalism is ailing.
You know the talking points: Regulation is the problem and deregulation is the solution. The distribution of income and wealth doesn’t matter. Providing incentives for the investors of capital to “grow the pie” is the only policy that counts. Free trade produces well-distributed economic growth, and any dissent from this orthodoxy is “protectionism.”
The old script is in rewrite. “We are in a worldwide crisis now because of excessive deregulation,” Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said in an interview.
He notes that in 1999 when Congress replaced the New Deal-era Glass-Steagall Act with a looser set of banking rules, “we let investment banks get into a much wider range of activities without regulation.” This helped create the subprime mortgage mess and the cascading calamity in banking.
While Frank is a liberal, the same cannot be said of Ben Bernanke, the chairman of the Federal Reserve. Yet in a speech on Tuesday, Bernanke sounded like a born-again New Dealer in calling for “a more robust framework for the prudential supervision of investment banks and other large securities dealers.”
Bernanke said the Fed needed more authority to get inside “the structure and workings of financial markets” because “recent experience has clearly illustrated the importance, for the purpose of promoting financial stability, of having detailed information about money markets and the activities of borrowers and lenders in those markets.” Sure sounds like Big Government to me.
This is the third time in 100 years that support for taken-for-granted economic ideas has crumbled. The Great Depression discredited the radical laissez-faire doctrines of the Coolidge era. Stagflation in the 1970s and early ’80s undermined New Deal ideas and called forth a rebirth of radical free-market notions. What’s becoming the Panic of 2008 will mean an end to the latest Capital Rules era.
What’s striking is that conservatives who revere capitalism are offering their own criticisms of the way the system is working. Irwin Stelzer, director of the Center for Economic Policy Studies at the Hudson Institute, says the subprime crisis arose in part because lenders quickly sold their mortgages to others and bore no risk if the loans went bad.
“You have to have the person who’s writing the risk bearing the risk,” he says. “That means a whole host of regulations. There’s no way around that.”
While some conservatives now worry about the social and economic impact of growing inequalities, Stelzer isn’t one of them. But he is highly critical of “the process that produces inequality.”
“I don’t like three of your friends on a board voting you a zillion dollars,” Stelzer, who is also a business consultant, told me. “A cozy boardroom back-scratching operation offends me.” He argues that “the preservation of the capitalist system” requires finding new ways of “linking compensation to performance.”
Frank takes a similar view, arguing that CEOs “benefit substantially if the risks they take pay off” but “pay no penalty” if their risks lead to losses or even catastrophe—another sign that capitalism, in its current form, isn’t living by its own rules.
Frank also calls for new thinking on the impact of free trade. He argues it can no longer be denied that globalization “is a contributor to the stagnation of wages and it has produced large pools of highly mobile capital.” Mobile capital and the threat of moving a plant abroad give employers a huge advantage in negotiations with employees. “If you’re dealing with someone and you can pick up and leave and he can’t, you have the advantage.”
“Free trade has increased wealth, but it’s been monopolized by a very small number of people,” Frank said. The coming debate will focus not on shutting globalization down but rather on managing its effects with an eye toward the interests of “the most vulnerable people in the country.”
In the presidential campaign so far, John McCain has been clinging to the old economic orthodoxy while Barack Obama has proposed a modestly more active role for government. But the economic assumptions are changing faster than the rhetoric of the campaign. “Reality has broken in,” says Frank. And none too soon. |
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| JTProcess |
Anyone with a brain has been screaming about this since the 80's... reaganomics is a bullshit system designed by white collar crooks to perpetuate an Aristocracy. Period.
to add.. this is a great article that breaks it down more thoroughly than I ever could...
http://polaris.gseis.ucla.edu/pagre/conservatism.html
The tactics of conservatism vary widely by place and time. But the most central feature of conservatism is deference: a psychologically internalized attitude on the part of the common people that the aristocracy are better people than they are. Modern-day liberals often theorize that conservatives use "social issues" as a way to mask economic objectives, but this is almost backward: the true goal of conservatism is to establish an aristocracy, which is a social and psychological condition of inequality. Economic inequality and regressive taxation, while certainly welcomed by the aristocracy, are best understood as a means to their actual goal, which is simply to be aristocrats. More generally, it is crucial to conservatism that the people must literally love the order that dominates them. Of course this notion sounds bizarre to modern ears, but it is perfectly overt in the writings of leading conservative theorists such as Burke. Democracy, for them, is not about the mechanisms of voting and office-holding. In fact conservatives hold a wide variety of opinions about such secondary formal matters. For conservatives, rather, democracy is a psychological condition. People who believe that the aristocracy rightfully dominates society because of its intrinsic superiority are conservatives; democrats, by contrast, believe that they are of equal social worth. Conservatism is the antithesis of democracy. This has been true for thousands of years.
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| zimmie |
more regulation = bigger and bigger government
bigger and bigger government = higher taxes
bigger and bigger government = inefficiency
bigger and bigger government = socialism |
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| JTProcess |
Quote: Originally posted by zimmie
bigger and bigger government = higher taxes
bigger and bigger government = inefficiency
bigger and bigger government = socialism |
Thank you for accurately describing the last 8 years of conservatism. (all I had to do was take out the regulation part) |
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| Billyfromsphily |
Quote: Originally posted by zimmie
more regulation = bigger and bigger government
bigger and bigger government = higher taxes
bigger and bigger government = inefficiency
bigger and bigger government = socialism |
So all those signing statements by Bush are helping to grow Goverment. So what side are you on zimmie? |
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| Fdubya247 |
Quote: Originally posted by zimmie
more regulation = bigger and bigger government
bigger and bigger government = higher taxes
bigger and bigger government = inefficiency
bigger and bigger government = socialism |
:rolleyes: |
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| patcracker |
Quote: Originally posted by zimmie
more regulation = bigger and bigger government
bigger and bigger government = higher taxes
bigger and bigger government = inefficiency
bigger and bigger government = socialism |
Bush = bigger Government (yeah that Home land security was a great idea)
Bush + deregulation and zero oversight = Mortgage institution and bank failure
Mortgage institution and bank failure * higher fuel prices = higher unemployment
Bigger Government + tax cuts= More money borrowed from China and other nations
Zimmie, any way you slice it it doesnt look good for your Hero G. W. Bush |
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| MLBoros72s |
| Someone has to educate the American electorate. The idea that Ronald Reagan somehow was helpful to them more then then 1% of Americans who own us now is absurd. |
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