The sheer size of our economy, and I suspect our military too, kept things fairly stable. By the early eighties, a one-sided, dollarized world economy had emerged, in which the sheer bulk of the American economy was the global financial anchor. America provided stability by growing more-or-less predictably, and by providing access to its vast domestic market. Other countries were more-or-less free to compete for a share of this market – it being clearly understood that their claims on the U.S. were, and would remain, financial only, not real. No strategically important U.S. corporation was for sale, nor would foreign capital be allowed to buy one. What other countries were allowed to accumulate were real estate holdings, media companies and dollar-denominated financial assets – mainly T-bonds. The U.S. economy’s vast size and inertia gave U.S. financial assets their stable, long-term staying power. Which, for the moment, they still retain. Through both threats and actual cases where access to U.S. markets was selectively blocked or limited for certain products and countries, successive U.S. governments secured agreements that were labeled “free trade” pacts. But in reality, it was American financial capital – and agricultural exports – that were “freed” to penetrate and ultimately dominate markets around the world. Big U.S. corporations had already determined that closing U.S. plants and outsourcing jobs to other countries was the easy way to play the globalization game. Their sales and profits continued to grow even after real wages in the U.S. became stagnant and stayed that way. Technological progress continued to boost U.S. labor productivity – firms just stopped sharing the higher revenue with workers. As Ive written here and said on my TV show weve been brainwashed. Weve been taught FDRs job programs didnt help. That LBJs Great Society was wasteful. That the 75 years of solid growth and lack of economic meltdowns were the products of other dynamics. Things would get even better, we were taught, if only we would relax the regulations on business, especially finance. And, see – look how many more millionaires and billionaires there are now! What more proof could anyone possibly need? And if poverty, misery and homelessness are all going up even as long-term unemployment sets records not seen for a generation – so what? We break eggs to make omelets. Someone just forgot to tell the little people that unregulated capitalism’s destructiveness always serves some greater, more glorious and creative purpose.
Posted on: Wed, 19 Mar 2014 21:37:08 +0000