Tuesday, March 3, 2009

Decoupling America from Wall Street

Wall Street is a barometer for the health of the U.S. economy. Not because it has any credibility in predicting anything related to finances or the economy, but because Americans have allowed their fates to become inextricably shackled to that of Wall Street. All over the country, people are suffering, even starving and dying, as a direct result of the crisis and the societal structure in which Wall Street once flourished.

The commercial media is not reporting on it, but National Public Radio has been covering bread lines in Florida, fenced-in plots of land where people can live in their cars in California, and hundreds of people in the Midwest lining up to receive food packages from Save the Children. This is the reality of the crisis now.

We all know how it started by now. A long time ago, I wrote that institutions like AIG were like black holes, that the amount of debt in the U.S. exceeds the global GDP and so on and so on. Nothing can be done now to save the financial system as we know it, and that realization will come to everyone soon enough. America must start over. The country must be restructured.

The U.S. is not ready for this crisis, and this fact is intimately linked to the creation of the crisis 35 years ago, when America embarked on the road to anarchy under Nixon.

The real winners in the culture wars of the 60s were the libertarians. As cultural issues took over national politics, the traditional core of national politics: income distribution and societal economics, were swept aside, not to be seen again for a long time (at least not from the perspective of those who were not wealthy).

Somehow, the anarchistic libertarian way of organizing society became the norm for the U.S. government. “Every man for himself” and “the law of the jungle”, were not slogans in this process, but they might as well have been.

It was slowly decided that the U.S should follow its own route to prosperity, and one that entailed: no health care system, no elder- or childcare system, no real pension system, no real unemployment benefits, no labor rights, no consumer protection rights, no mass transit, no financial regulation, the world’s lowest taxes etc etc…

How could a country possibly make up for the lack of all these things that all other advanced countries have? The answer is: Wall Street. The free market was thought to be able to take care of all these things, which arguably make up the bulk of societal success and overall well-being of its people.

In other words, Americans didn’t just gamble their savings on Wall Street, they gambled everything. At this point, the country has only two choices: rely on Feed the Children or decouple from Wall Street.

Decoupling from Wall Street means purging the influence of speculation from the daily lives of everyone who does not actively seek it out. It means introducing stability and predictability for Americans who so direly need it. It means guaranteeing prosperity in the richest country in the wolrd. It means:

- providing national health care and collective bargaining for drugs, making private health insurance and expensive drugs obsolete. This would be a huge relief for both the public and corporations

- providing a good pension after a life of work through a national pension plan which is not subject to speculation

- heavily regulating the financial sector, and especially the mortgage sector, so that real estate price swings will be far less likely to occur in the future

- introducing much needed labor rights, including a much higher minimum wage and much stronger job security for everyone who is gainfully employed

- providing as close to free University education as possible, taking away the burden on families to save for college. (in most advanced countries, University is free, unbeknownst to most Americans)

The structural shift is absolutely inevitable. It is only a matter of time before the libertarian anarchy is a thing of the past.

Moreover, I advise that the winner-takes-all voting system should be destroyed.

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