The American Economy

Response to Essay by Chris Floyd

While Floyd makes many good points, it is important to highlight the truly atrocious stewardship of our economy during the last decades, not only this administration but many before it. The reasons are close to what the author of the article suggests: vested interests of the elite, but exactly how does the elite benefit? The crucial factor to keep in the mind is that the status quo benefits by maintaining the status quo; ergo, by definition, it is always conservative, even regressive, because it resists, in the present case by force of arms, changes that could undermine its privilege. Exactly how necessary, intelligent, or sound is this resistance?

 

We need only look at the transistor to get our answer. Americans developed the technology but did not implement it. Sony beat the U.S. to the market and we know the rest of the story. Had this not occurred, our TVs might still have tubes and all sorts of other now antiquated technology. So, how do we sustain the myth that Americans are innovative and entrepreneurial, you know, that "good 'ole American know how." Obviously, we cannot any longer support this myth. The U.S. is, according to this author, in an "advanced state of decadence." Precisely what does this mean? Basically, it means we have lost our grip on the economy, but partly this is because of many other myths, including some taught at Harvard Business School. For instance, we were taught that competition is good for us; we were told of the benefits of antitrust laws; and we were made to believe that by endless pillage and plunder of resources, the economy could continue to grow at a proud rate of 5-10% a year. Of course, many only invest in stocks that they hope will grow at 30% or more per year, showing that these people do not really believe any of the basic laws of Nature or the economy.

 

For instance, Nature does not have an endless growth potential; it is cyclical and depends on renewability. A tree grows, produces fruit, and next year, it produces fruit again and again. We are all of us alive today because our ancestors understood this fact, but where did I learn to discriminate the difference between macro economics as viewed on Wall Street and as seen by Nature? in a village in Andhra Pradesh where American entrepreneurs were trying to coax illiterate farmers into growing a different kind of rice. The farmer looked at the "experts" very respectfully but sternly and said, "Sahib, I am here today because my father and his father and his father's father grew this kind of rice. Please take your rice back to your country."

 

In the news last week, we heard how 1800 sheep died after foraging on GMO crops in India. The farmer did not prevail over the aggressive marketing of the multinational corporations that are totally out of touch with the most important word in economics: sustainability. We are so fiscally immature that we covet very short-term profits without thought for tomorrow. Mañana however comes and brings with it the hardship of bad decisions.

 

We are now in a muddle over pump prices, but we are told Europeans have been paying much more for years. Is this true? Has anyone bothered to add the cost of taxes to build weapons and wage war to the sticker price at the pump? This is the true cost of lack of ingenuity, failure to develop viable alternatives to fossil fuels, and criminal misuse of power. Why should the elite worry so much about investments? At any time in the last fifty years, Mobil could have invested in alternative energy and staked out a place for itself as the primary provider of solar panels and wind generators, but will we be importing these from Denmark or China in the future?

 

Investment in weapons benefits the arms dealers, people who sit on the board of the Carlyle Group and make deals with petty tyrants they elevate to power one day and crush the next. There is a long list of CIA favorites who were later deposed for failure to tow the official line. What is most shameful in the present scenario is the collapse of clear thinking and moral rectitude because no society can remain viable when its agenda is based not only on lies but an intolerable lack of foresight and criminal deception of the masses.

 

Many argue that it is too late; the world is doomed. I do not believe this. I believe these arguments are based on science that has been bought for a price. There are countless "fringe" scientists with solutions for every problem facing us today.

 

As a former economist, I can also say that if we cannot "afford" our standard of living, it is possible we are not earning our way in the world. If we look at the two most expensive costs, they would be "defense" (which ought to be called "offense") and "health care" (which ought to be called "hype" or something much worse.) Both are easily addressed through creative restructuring of the foundations of the economy. Who cares whether Dick Cheney retires with $100 million a month income or just $1 million. For the $99 million a month good policies might cost Halliburton, countless others would be better off, significantly better off.

 

Energy is basically free. There are countless alternatives to the present reliance on fossil fuels. So, let's see, we take 20% of the defense budget and invest it in development of alternative energy. I wonder how many windmills and solar panels $100 billion would buy? I bet it would be enough to make the whole of New York independent of fossil fuels, maybe with enough left over for Pennsylvania and Ohio!

 

Then, let's take 20% of the Health and Human Services budget and invest it in sound research of natural alternatives to expensive and usually dangerous pharmaceuticals. Like, who cares how much Rumsfeld's personal income is impacted by this? I would imagine that with $150 billion, we could bring health care to the level where everyone currently uninsured could have free health care. You see how simple it is?

 

The irony is that, as we are told, "this is your money." It's your tax dollars working for you . . . or against you? The theory on Wall Street, when I worked there in the mid-60s, was that we need massive amounts of capital to invest in research and development, but I discovered this is another myth. If smaller countries like Iceland and Sweden can declare their intention to become independent of fossil fuels, then the cost of developing alternatives is easily within the budget of the U.S. if, IF, IF there were a will to lead honestly and not pander to lobbyists for big interests. For these crimes against citizens, not to mention the environment, nearly everyone on the Hill is guilty of total lack of leadership, lack of vision, and lack of courage.

 

Ingrid Naiman
7 May 2006