Tuesday, May 25, 2010

Radical Free-Market Ideology Run Amok by Gerald R. Lotierzo

For at least four decades, we have been witnessing the decline and fall of the fortunes of the majority of American citizens. Yet we were repeatedly informed by the gurus of the free market, those neoliberals, that a new age of American expertise was upon us and manufacturing products would not be the source of our economic well being. Fifty years ago, a third of U.S. employees worked in factories, making everything from sox, clothing, lipstick, cars, and whatever else you could think of. Today, a little more than one-tenth of the nation's 131 million workers are employed by manufacturing firms. We have outsourced our factories so Goldman Sachs, JP Morgan, Citibank, and the rest of the banksters can make lots of money off of cheap foreign labor.

Don’t worry they told us, let China, Mexico, Bangladesh, and the rest of them make what the world needs---our middle class existence will be perpetuated by the financial services industries. The “market” will save us with mutual funds, individual shares, derivatives, credit default swaps and hedge funds. The financial world---Finance, Insurance, and Real Estate— we were told has been producing millionaires and billionaires and you can be one of them. They didn’t tell us that you had to leave your integrity at the door in order to play the game and even then only a few were allowed in.

The finance sector’s share of domestic corporate profits, never higher than 16 percent until 1986, hit 41 percent in the last decade. The justification for financial deregulation and the Reagan and Bush tax cuts for the rich was the trickle-down theory; wealthy peoples' earnings would fall off the table like crumbs and trickle down to the rank-and-file. The livelihood of much of the U.S. workforce and perhaps half of the rest of the world's population—maybe three billion people—is being threatened by such financial lawlessness. This is nothing short of white-collar crime. No government whether Republican or Democrat will defy them. Nor will any government in the rest of the world. The system has institutionalized an increasingly stratified worldwide culture of haves and have-nots.

The world economy is in free fall, but the top money men came out of the squeeze with all their billions intact, if not multiplied. One billion people, almost one tenth of the population of the world now live in shantytowns all over the world. The Planet of Slums by Mike Davis vividly describes nightmarish cities where people live in filth and are deprived of everything we take for granted.

The US now has the highest poverty rate in the industrialized world with over 50 million citizens living in poverty and even though they don’t live in comparable slums the time may soon come when we may not be able to distinguish the slums of Calcutta from the slums of Detroit. In the past two years, Americans have lost $5 trillion from their pensions and savings. They have also lost $13 trillion in the value of their homes. The US now has the highest inequality of wealth in our nation’s history. The economic top 1% controls an all-time record 70% of all financial assets. While CEO salaries have been soaring and corporate profits are breaking all-time records, average worker pay is declining and double-digit unemployment may become a permanent fixture of our neoliberal economy.