When one envisages conflict quite often strife of a personal nature comes to mind. However, in today’s milieu of interconnectedness facilitated by the ever increasing technological enhancements to communications we find ourselves not only involved in human conflict of untold proportions but an evolving economic conflict brewing on the horizon, albeit a disingenuous one!
The arrival of the “great financial collapse” which began in the summer of 2007 was hurried by the avarice of the financial oligarchs and their unholy alliance with the ruling although clueless elite in Washington. The pursuit of financial gain for the few at the expense of the many is nothing new in the world’s economies. The Harvard historian Niall Ferguson offered an eloquent and authoritative treatise on the history of financial calamity and malfeasance from the time of antiquity.
The contemporary economic conflict that is fermenting has its origins in the recent financial collapse with each country attempting to maintain its sovereignty and grow its way out of the economic tsunami that originated in the shallow water of the United States….specifically the financial sector of the U. S. economy. The financiers’ greed and penchant for the quick non-productive buck has placed the global economy of Main Street on the precipice of financial ruin and has resulted in the great recession of 2008-2009.
So what pray tell are the economic conflicts we should be so worried about? Well, first, the United States is limping along economically and the pace of job creation is dismal ….hence the ten percent plus unemployment rate in our economy. Secondly, as countries attempt to grow their way out of the financial malaise they are inclined to adopt protectionist behaviors which begets additional protectionist behaviors until the tipping point is reached resulting in a dramatic shift to the left for the global aggregate demand curve.
The self-appointed experts and financial pundits would have us believe the protagonist of the ensuing conflict are the varieties of foreign currency regimes and currency valuations especially the increasingly polemic rhetoric around the Renminbi and the United States dollar exchange rate. According to Timothy Geithner, (yes the man responsible for the IRS…. yet did not pay his taxes….. and yes, the man partially responsible for the current financial debacle when prostrate at the feet of Robert Rubin and Lawrence Summers when Glass- Steagall was repealed under Clinton, ….and yes the man who was President of the New York Federal Reserve Bank when Wall Street was permitted to lever itself , in some cases 40 to 1) the current Treasury Secretary postulates the culprit of the United States current economic crisis rests on a bilateral currency exchange rate discrepancy. Simply have China revalue their currency and all our ills will go away. Speak about a disingenuous and spurious argument…did we not hear similar rhetoric from all the self-appointed “experts” in the 1980s when Japan’s currency, the yen, was also believed to be undervalued against the dollar. Last I looked, the trade imbalance with Japan continued to remain large even in the face of the yen’s dramatic appreciation against the dollar. Yet here we are, approximately $12 trillion dollars in debt, a current budget deficit expected to reach $1.8 trillion dollars, and GDP growth that is both jobless and anemic…….and it is all due to a bilateral currency exchange rate. Yeah right!
So what is missing in this current debate and looming economic conflict….possibly some common sense? What if we ask different questions…would that better frame the debate? Why not ask the following:
- Why do the Washington elite continue to encourage a hollowing-out of our domestic production capabilities and continue to champion inappropriate tax policies that encourage consumption at the expense of investment?
- Why do the Washington elite continue to spend when they know we are simply adding to the financial burden of the current and future generations of Americans?
- Why do the Washington elite permit corporations to outsource jobs knowing that the financial burden in transfer payments to support the unemployed is disproportionally placed on the shoulders of the working class and not the corporations responsible for the layoffs?
- Why do the Washington elite permit almost 100% of the economic benefits derived from twenty years of growth in productivity to accrue to the top 10% of earners in America while the wages of the middle class have been stagnant over this same period?
- Why do the Washington elite permit CEOs to walk away with hundreds of millions of dollars in bonuses and then decry the working person in the United States a minimum wage of $7.25 per hour?
The simple answer is because they CAN! We have a populace that appears more concerned with the rants of a twit judge on some TV show about talent than about the economic and even worse, humanitarian conflicts. Moreover, we have a system that provides very little in the way of real choice given the constraints of a two party system. We have a capitalist system that has been hijacked by the ruling elite resulting in regulatory capture where profits are privatized while losses are socialized. And lastly, we have a system that has elevated the professions of economists and econometricians, social scientists, to heights equivalent to real science and have perpetuated their policy positions as infallible.
To quote a popular aphorism….”what we have here is a failure to communicate.” The failure on the part of our elected officials to communicate the economic reality they have placed the American people in; their failure to exhibit a lack of leadership in proposing realistic and necessary budgetary constraints; and the failure of the American people to take action, by what ever means necessary, to overturn the egregious economic policies imposed on the masses by the ruling elite attendant to their regulatory capture of our political system.
What we have here is a failure in leadership…..Amen!