The Other I

June 25, 2013

What’s the matter, honey?

Filed under: The Economy: a Neophyte's View — theotheri @ 9:17 pm
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I said in my last post that I was going to try to summarize the main points in What Then Must We Do?, a book I have now read twice.  My initial enthusiasm for some of the solutions proposed by the author is not quite as unquestioning as it was after the first round, but it remains a provocative book.

It is provocative first of all because of the questions it asks and the depth of some of the problems that our American system of “Democratic Capitalism” seems to have developed.  There are four areas I find particularly worrisome.

The first problem, as I mentioned before, is the huge unequal distribution of wealth which has developed in the States during the last thirty years.  It is not only that a mere 400 at the top own more wealth than 180 million people at the bottom.  It is that this trend continues to accelerate.  This tiny group at the top are continuing to amass more and more wealth, and more and more power while the purchasing power of the middle and lower classes has almost stagnated completely for three decades.

Can we still call this a land of opportunity then?

This leads to my second concern:  unemployment.  The benefits of global trade are huge, and  it has done more to reduce poverty in under-developed countries than any other single factor.  But the benefits are not universal and companies often abandon workers in the States with little concern for their subsequent welfare.  Many of the dismissed workers remain unemployed despite their best efforts for the rest of their lives.  The devastation spreads from individuals to families to entire communities.

Should corporations have responsibility only to their shareholders and little or none to their workers?

Banks are my third concern.  One does not need to come to this blog to know that in 2008, banks brought the economies of the developed world to their knees, and it will be generations before they recover to pre-2008 levels.  The $2.6 trillion dollars lost to the American GDP alone, the $19.2 trillion loss in household net worth, and the loss of 9 million jobs is bad.  But the real worry is that almost every economist I have read, from far right to far left, are agreed that it has happened before and that it is going to happen again, probably in less than ten years time.

Yet today, banks are still the most powerful lobby with the most highly paid lobbyists in Washington DC.  With the Supreme Court’s recent ruling that corporations have the same rights as private individuals to spend as much money as they wish to influence the vote, banks and corporations are terrifyingly powerful in determining our laws.

And what about Health Care?  America spends 18% of our GDP on health care, close to twice as much as other developed countries.  1/3 of all federal expenditures goes to health care, and 1/2 of all federal revenues.  But our health care is far worse.  Infant mortality rates are 31st of the 34 countries with developed economies.  Our life expectancy is less than 79, 27th of the 34 developed countries, below life expectancies in countries as diverse as Australia, Hong Kong, Switzerland, Singapore, Andorra all of whose residents can expect to live well into their 80’s.  We rank a shocking 34 out of 34 in terms of obesity.

What could it do for the quality of life if the American health system could get the same results as many other countries do for half the cost?  What if the savings could be spent instead on roads and bridges, on schools and education, on our energy grids?

No system is perfect, even good systems, like the one in the U.S. that has produced the biggest economy in the world and improved the lives of hundreds of millions of people.  But to hold onto the gains we have, we need to find a few new ways to achieve our goals.

In my next post I will talk about some of the solutions the author Gar Alperovitz suggests.

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2 Comments »

  1. Your third concern reminds me of the line: ‘Give a man a gun and he can rob a bank – give a man a bank and he can rob the world.’ I would have loved to have thought that one up 🙂

    Like

    Comment by Chris Lawrence — June 26, 2013 @ 5:08 am | Reply

    • Me too! Terry

      Like

      Comment by theotheri — June 26, 2013 @ 2:06 pm | Reply


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