Monday, September 29, 2008

'Greed is Good': The Death of an Economic Religion

by Len Hart, "The Existentialist Cowboy"

The worship of the 'free market' model had become a religion that celebrated greed, self-absorption and, at its worst, religious intolerance! If the 'party is over', then good riddance! The religion of the 'free market' became a vehicle by which the Republican party would bestow legitimacy to bigotry, intolerance and authoritarianism. In defense of its free market religion, the Republican party embraced every lie, every crime, every atrocity, every aggressive war.

Throughout history, nations have gone to war with 'God on their side'. America's free market right wing would take the nation to war with 'unseen forces, an 'invisible hand' on 'our' side. At home, enemies of the free market religion often found themselves charged by an 'inquisition' --the House Un-American Activities Committee.

It was not necessary to espouse Karl Marx to get branded. The mere mention of John Maynard Keynes or Kenneth Galbraith would lose you a public office had you been interested in politics. John F. Kennedy paid with his life for having challenged the 'free market' model with regard to Cuba, the Texas Oil Industry, and the FED. It was the religion of the market that demanded not just loyalty but obeisance. In the name of 'free markets', freedom itself fell victim to 'assassination', the authoritarians remedy of choice.

The US economy became an going 'scam' and required a slick, Hollywood 'star' cum grandfather figure to sell it, to put a smiley face on it, while making self-absorbed, greedy materialists 'feel good about themselves'. The Reagan era was summed up in a phrase from the movie 'Wall Street': GREED IS GOOD!

The model never worked as advertised, though the very astute knew what was happening and supported it. The real effects were papered over. Critics repeatedly warned that only the very, very rich benefited from GOP policies. But as long as the GOP could buy votes with policies that enrich its base, everyone else was effectively disenfranchised and out of luck. Now, it would appear, the GOP is a victim of its own success. If their case that bailout is needed is true as represented, it proves that the GOP was, in fact, interested only in making the rich, even richer while every else fell off the scale. At present, about one percent or less OWNS as much as 99 percent of the wealth in the US.

Republicans benefit from the boom and bust cycle. Wall Insiders have always had the means by which the cycles could be manipulated. It was, of course, a short-sighted strategy that could only succeed in the short term in the attainment of short-sighted objectives. In fact, 'capitalism' is endemically flawed.
What I like to say is that Karl Marx was right, socialism works, it is just that he had the wrong species. Why doesn't it work in humans? Because we have repro­ductive independence, and we get maximum Darwinian fitness by looking after our own survival and having our own offspring. The great success of the social insects is that the success of the indivi­dual genes are invested in the success of the colony as a whole, and especially in the reproduction of the queen, and thus through her the reproduction of new colonies.

--Edward O. Wilson, Karl Marx was right, it is just that he had the wrong species
The leadership of the GOP would never tell you that the joy ride could not have lasted forever. Their own 'fortunes' were on the line. Everyone, it seems, had bought into the scam and most had made the Faustian bargain.
Capitalism's representatives argued that the collapse of Stalinism and, with it, the planned economies of Russia, Eastern Europe and elsewhere, left capitalism as the only effective vehicle for delivering goods and services to the peoples of the world. The future was one of endless rises in living standards.

--Capitalist crisis: Karl Marx was right
A 'financial crisis' will eventually affect the 'real eocnomy', the real world. White collar workers, the beneficials of 'trickle up' will be among the first to feel the impact of collapse. Already, 63 thousand are out of work, mostly in the financial centers of New York and London. Another 20,000 jobs will vanish within another year.

Bureau of Labor Statistics tell the story: during GOP regimes elites grew richer even as most citizens suffered from increased unemployment, weaker currency, and well-timed recessions.
  • Any Democratic President has presided over greater economic growth and job creation than any Republican President since World War II.
  • Job creation was worst under a Republican, Bush Sr, at 0.6% per year; best under a Democrat, Johnson, at 3.8% per year.
  • Economic growth under President Carter was far greater than under Reagan or Bush Sr. In fact, economic growth in general was greater under Johnson, Kennedy, Carter, and Clinton than under Reagan or Bush.
  • The job creation rate under Clinton was 2.4% significantly higher Ronald Reagan's 2.1% per year.
  • The "top performing Presidents" by this standard, in order from best down, were Johnson, Carter, Clinton, and Kennedy. The "worst" were Nixon, Reagan, Bush, Bush being worst with Reagan in the middle.
  • Half of jobs created under Reagan were in the public sector--some 2 million jobs added to the Federal Bureaucracy.
  • Reagan, though promising to reduce government and spending, tripled the national debt and left huge deficits to his successor.
  • By contrast, most of the jobs created on Clinton's watch were in the private sector.
To sum up: any Democratic President chosen at random beats any Republican President chosen at random since World War II.

Recriminations --the source of many interesting sidelights --are inevitable whenever any group is forced by circumstance to confront the consequences of its failures. Reagan loyalists, for example, blamed Bush Sr's much maligned tax hike for the recession which occurred under Bush Sr. Yet, Bush had not signed the tax hike into law until the recession was well underway. The cause of the recession was a huge deficit left Bush by Reagan.

The height of Republican absurdity was the attempt by Republicans to take credit for the Clinton prosperity. We were asked to believe yet another fairy tale that the bad effects of Reagan's tax cut for the wealthy in 1982 were to be felt in the form of a 16 month recession then, but the "good" effects of the same tax cut were not to be experienced for a full generation later under Clinton!

More recently the demon du jour is 'terrorism'. Like 'communism' in the fifties, 'terrorism' became the bogey man upon which the nation's fears and anxiety were first project and then made real. One is reminded of the fifties' sci-fi classic, Forbidden Planet, a 20th century retelling of 'The Tempest'. The monster was of our own making. It was the monster from our ID.

Can that be said of the Bush administration, an internal threat and clearly the greatest threat to civilization and the American way of life since World War II? Many have wondered if Bush, having arrogated unto himself the powers of a dictator, will bother to leave the office he seized in a stolen election that was characterized by violence and fraud.
In May 2007, Bush issued NATIONAL SECURITY PRESIDENTIAL DIRECTIVE/NSPD 51 and HOMELAND SECURITY PRESIDENTIAL DIRECTIVE/HSPD-20. These directives gave Bush the authority to assure the Continuity of the Federal Government in the event of a Catastrophic Emergency that resulted in, among other things, some extraordinary disruption of the economy.

Under Presidential Directive/HSPD-20, a single National Continuity Coordinator is responsible for coordinating the development and implementation of Bush's Federal continuity policies. Currently, the Assistant to the President for Homeland Security and Counterterrorism (APHS/CT) is the National Continuity Coordinator.

--Adrien Burke, The Party is Over
It's hard to refute the author who makes the point that Bush has been 'waiting [for this crisis] for a long time'. McCain appears about to crash, having pinned his hopes upon an airhead who thinks human beings walked with dinosaurs. One should worry! In the past, whenever this mentality was threatened by JFK, MLK, and later RFK, the resort to murder was never improbable 'coincidences' they would have us believe. All three men and other besides were murdered because they threatened the Wall Street establishment, the entrenched power and wealth of some one percent of the US population. [See: Inequality in the US and Three Reasons JFK was Murdered].

As the old Soviet Union broke apart, a wall in Berlin was razed, and 'labor', long suppressed in the US, found voice in Poland, it was fair to ask: what bogeymen are left that might be exploited by the GOP! The answer was obvious: terrorism! Indeed, terrorism has been worse under every GOP regime at least since Ronald Reagan. FBI stats, published by Brookings, indicate that there were three times as many terrorist attacks against US interests under the regime of Ronald Reagan than under that of Bill Clinton. And more recently, there is probable cause to bring criminal charges against George W. Bush, Dick Cheney, Donald Rumsfeld, Consoleeza Rice, et al in connection with the 'terrorist attacks' of 911.

As he did the, the fear that George W. Bush will exploit the financial crisis to consolidate right wing, dictatorial power is real and rational. Already the 1st Brigade Combat Team has been re-assigned to domestic duty. According to the Army Times, it will perform the same duties in the United States --or, as the Times puts it --"at home".
They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.


The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”

The package includes equipment to stand up a hasty road block; spike strips for slowing, stopping or controlling traffic; shields and batons; and, beanbag bullets.

“I was the first guy in the brigade to get Tasered,” said Cloutier, describing the experience as “your worst muscle cramp ever — times 10 throughout your whole body.

“I’m not a small guy, I weigh 230 pounds ... it put me on my knees in seconds.”

--Army Times Brigade homeland tours start Oct. 1
The waging of war against the people, defined by the US Constitution as sovereign, is a case of high treason! But what's another count when there is probable cause to bring those charges against George W. Bush right now?

The nation's financial disaster cannot be considered separably from the myriad of crimes, failures and outrages that follow directly from the disastrous GOP stewardship of George W. Bush, clearly the very worst and criminal occupant of that high office since Warren Harding.

Will Bush, the miserable failure, have brought about the end of American capitalism? Certainly! It's already a done deal. The house of cards has fallen, the Ponzi scheme collapsed. History will record that Bush's only legacy will turn out to have been a result that he had not sought. The only other alternative is that it had been planned all along and that his legacy will be nothing less than a right wing tyranny 'justified' as the 'response' to crisis and supported by US troops in American streets.

Indeed, this is the end of American 'free enterprise' as we knew it. Turn out the lights; the party's over. In its place come storm troopers and jack booted thugs with whom there is no dissent.

Willie Nelson: Turn Out the Lights; The Party's Over


Anonymous said...

More great insight into right wing Christian economics Len too few express [or don't have the balls to confront;-]! I had just made a post about the Free Market hoax in the Evangelical Roots of Economics to the Paulite Cult of Ronulan Libertarian Conservatives at their 'anti-neocon' forum without having yet seen your fine article here. I end up reading your articles after linked from Buzz Flash 'most popular ranked'.

Oddly their 'anti-neocon' stance appears to completely ignores and render harmless the Zionist Christian Identity in US Neocons while only vilifying neocons as Jewish Zionists in Israel - hence their seemingly irrational anti-neocon conservative support of 'right authoritarian', anti-secularist and dominionist Ron Paul... [who has 'come out' to endorse the constitution party's theocratic presidential candidate with a platform to an unconstitutional US theocracy].

You of course realize more than most that the Texas Republican Party Platform includes the fundamental roots of Christian Calvinist Economics from free market deregulation of corporate greed, bankrupting the Federal Government through Tax Cuts, elimination of Fed pubic education and welfare to put it in the hands of Christian churches and private Christian schools, increasing material wealth by hook or by crook, and the plunder natural resources...

Read Let There Be Markets: The Evangelical Roots of Economics for a historical look at Calvinist based Xtian economics if ya haven't yet.

Unknown said...

Our current economic atmosphere is undisputedly a result of massive greed and corruption on the part of governmental and financial institutions.
So why is this viewed as a crisis instead of progress if, in fact, greed is good?

The problem is we hold onto the myth that greed is integral to the success of Capitalism.
The reason this myth hasn't been universally denounced is because it is caught up in language and how we choose to define greed.

Ambition is defined as a desire for rank, fame, money, power, or to achieve a particular end.
It does not speak to the motivation for that desire or one's intentions after having achieved the desired end.
It is neither good nor bad, but is generally regarded as a virtue and the driving force fueling competition.

Greed is often defined as an excessive desire to acquire and possess more than one needs or deserves.
The key element (the element distinguishing from ambition) is 'more than one deserves' since what one actually needs is arbitrary.

By one interpretation, greed offers the most practical incentive for people to work harder than the next guy, get a good education, invest in a business, and acquire wealth. This implies hard work, ability and determination and is, by definition, not really greed. This is actually just ambition and can be good and healthy and a necessary component of our economic system.
Another flavor of greed is being the motivating factor to lie, cheat, scam, and do other unethical or illegal things in order to achieve one's ambitions. This form of greed defies the tenets of the free market.

The blanket statement "Greed is good" ignores such distinctions of interpretation enabling cheaters and, in turn, degrading the free market system. As a matter of common sense, we can say "Love is good", but when we further qualify it to love hurting people or loving a child sexually, it no longer holds water. So the legitimacy of the statement "Greed is good" is more a matter of language than of ideology.

In the most basic sense, a Venture Capitalist is just another job in the free market system.
The responsibilities are to analyze and speculate as to the actual value of commodities, stocks, etc. and invest accordingly thus driving the free market. If you do your job well you should make a profit, but this alone does not imply greed. I think we can all agree the system works when properly checked and balanced, but the effectiveness of the system is perpetually hamstrung by greed (2nd form).

In short, Gekko was wrong. Greed is NOT good.

Where do we go from here?

We may or may not sympathize with home-owners who have been foreclosed as they did take their chances and hopefully understood the conditions of their loan contracts, but we all agree the burden of this catastrophe (if that's what it is) should not be borne by Main Street.

To quote Michael Josephson, "If you have an unregulated arena, cheaters win".
That isn't to suggest that the answer is more regulation, but perhaps better regulation - simpler and more transparent regulation.

The legal system in the United States is by far the most complex in the world and each year it only grows larger and more convoluted, especially in economic policy and tax legislation. This ensures that fewer and fewer people are capable of understanding and vetting proposed legislation before it goes into effect.
Our uneducated congressmen, let alone our citizens, have almost no chance of catching bad legislation in time to prevent the inevitable exploitation by those who have the resources and foreknowledge to take advantage of the changes.

Then we have the Federal Reserve, the hidden power-players who are accountable to no one.

We all realize the game is fixed, but we still play because no one truly believes that systemic change is possible and we figure, "Hey, at least we know the rules well enough to gain some ground this year."

I daresay if you go back to one year ago we, as a nation, had less faith in the American Dream than anytime since the war in Viet-nam so it came as no surprise when last years' presidential election boiled down to one word. Change. The same rhetoric that is guaranteed to work at least once per generation. In pessimistic times change is a surefire bet and Obama was a shoe-in. We, as a populace, suffer from the battered citizens' syndrome, telling ourselves that "this time will be different." Why? Because we need to believe again.

Don't get me wrong, I am an Obama man. I'm not sure if we ever had a candidate that exuded so many of the qualities we all look for in a leader: intellect, empathy, composure, integrity, and even moderation in divisive times. Also, not enough can be said about boons that come with being in the right place at the right time.

It's way too early to pass any judgement, but the pledges to introduce more transparency to the legislative process are inspiring. Sure, the bailout is more of the same, but it was on the table even before the election and it's just too early in his term as president to try anything too radical. The jury is still out and will be for some time, but I truly think there is a sense of optimism in the minds of the people these days, despite the continual doom n' gloom overtones. Obama is still managing expectations in anticipation of more bad news. You can't start selling optimism if things are about to get worse. The one thing I think we can all agree on is that these are some interesting times in which we are living.