Our Impacted Economy
I’ve been thinking about how our economy should work. Also in my mind is Martin Luther’s oft-used metaphor of bowel problems. I think our economy is impacted. Bowels become impacted when nothing moves. There is a Jewish prayer for going to the toilet. In that prayer the blessing of a well-constructed body is praised. “You are blessed, Eternal our God, ruler of the universe, Who formed humans with wisdom and created within us passages and openings. It is well-known before Your glorious throne, that if one of them that if one of them [that should be closed] is open or if [one of them that should be open] is closed, it would be impossible to exist and to stand before You.” What is true of our bodies is, I believe, true of society and of economics in general.
What I see is that corporations and government need each other in many ways. Without going into details (much of which we mostly know anyway) the transcontinental railroad made a lot of our economic growth possible. That was a partnership between government and private spending which benefited American commerce and manufacturing. The fact that doing so was part of why we committed genocide on the aboriginal Americans (I hope Tony is joking about beating them fair and square, because there was nothing fair or square about it). By the same token the railroads also were the occasion for the first regulatory federal controls on interstate commerce:The Interstate Commerce Act of 1887. I believe this was also why we created time zones. In the 50s the government created the Interstate Highway System and that was a huge boost for our economy and for our corporations.
Capitalism requires the movement of money and assets. I’ve written this before, but here I am adding a bit of context, I think.
If any of the major segments of our market economy fail to act or are unable to act, the entire economy suffers. Corporations have to invest and government has to spend and consumers have to earn enough money to spend. Over-control of corporate activity stifles economic activity, as the GOP keeps saying, but the failure of government to spend on infrastructure and on needed services to our population and our businesses also stifles economic activity. Failure to pay a living wage with decent benefits also stifles the economy. Government is also responsible for making sure there is a level economic playing field.
It seems to me that our economy is in poor shape and having trouble getting stronger is because corporations are not investing enough in manufacturing here; banks and financial organizations are either sitting on their money or are using what they have (which is often other peoples’ money) instead of financing investments; the governments (federal, state, and local) are now being parsimonious, which slows down needed growth. The real job creators, which is us consumers, are insufficiently funded to spend enough to justify (in the minds of entrepreneurs) investing. Our national infrastructure is an embarrassment and we are seeing increasing failures, especially from our obsolete national power grid and other major systems that are aging and need big funding. Money is not moving enough to sustain economic vitality. Whose fault is that? I place the blame at the feet of the GOP, which seems to understand only what expenditures cost and not what they buy; and our financial institutions and corporations that have gambled with other people’s money and who resist needed regulations to make our system fair and the necessary risks of capitalism real. Corporate board members who pocket the profits instead of investing them in productive investments are a relatively minor prolem, but they do point to the underlying problem: selfishness. Our national motto today ought to be “Ubi Mea.” Romney attacked the 47% for depending on government largess, but he should have been looking in the mirror.
I also blame the Democrats because they have all but abandoned the principles that were their hallmark. They have done so in response to the political climate in DC. From my perspective Clinton and Obama are responsible for that. Obama is often depicted as a leftist or even a marxist (which is just really stupid name calling) when, in fact, he is a moderate a bit to the left of center. I do not have much hope that he will change in his second term despite his rhetoric.
In the end we will need a Roosevelt (Teddy or Franklin) to really shake things up. That was how the Gilded Age ended and the Depression ultimately defeated. Our system must benefit corporations and consumers (all of us) or it will not work. It is government’s responsibility to make that possible. I am always skeptical of government but I believe they can be pushed in the right direction. As it says in the Talmud, “Pray for the welfare of the ruling power, for without it, people would eat each other alive.”