Bush's false "economy"

Collarspace Discussion Forums

Home Login Search

Bush's false "economy"

View related threads: (in this forum | in all forums)

Logged in as: Guest

All Forums >> [Casual Banter] >> Off the Grid >> Bush's false "economy"

Page: [1] 2 next > >>

Message

<< Older Topic Newer Topic >>

Bush's false "economy" - 9/4/2007 10:11:54 AM

SimplyMichael

Posts: 7229
Joined: 1/7/2007
Status: offline

Financial Times: Don't forget role of Bush's policies in asset inflation
by Jerome a Paris
Tue Sep 04, 2007 at 07:04:08 AM PDT

Don't forget role of Bush's policies in asset inflation
This is the excellent title that the Financial Times (Europe's main buisness paper) has chosen for the letter to the editor I sent them 10 days ago and which they published yesterday.
That letter was the result of a joint effort over at the European Tribune, as can be seen in the thread that reacted to an earlier article by Martin Wolf, the FT's senior economics editor (Financial crash: blaming the victims)

Jerome a Paris's diary :: ::

Sir, In his article "Why the Federal Reserve has to keep the party going" (August 22), Martin Wolf refused to acknowledge one obvious cause of the current financial crisis: the policies of the Bush administration, carried out with the open support of the Greenspan Fed.

These policies, through tax cuts aimed at the well-off, massive corporate pork made possible by a war of choice, and lax monetary and banking policies, had as their goal making the investment class richer – at the expense of everyone else who participates in the economy.

Stagnant wages, made possible by weakening of corporate regulation and increased access to the Chinese labour pool, were instrumental in making higher profits possible, and lax monetary conditions allowed bubbling financial asset values. Lower taxes made capture of that wealth easier for the rich, and share buybacks (instead of investment) have been among the preferred instruments to get it done. The debt bubble also had the great advantage of making it possible to hide from most Americans that they were not sharing in that wealth capture, by hooking consumers on a habit of corrosive easy debt that substituted for real income increases.

The fact that spending growth was underpinned by debt and not by income is an inevitable result of the neoliberal policies pursued and the main cause of the American deficits, as financed by the rest of the world. With US spending directed at manufacturing based in other countries, their complicity has been easy enough to procure.

The imbalances are totally unsustainable and need to be corrected – in fact, they should have been several years ago. That correction will be painful enough; arguing for yet another round of the bubble merry-go-round, which can only lead to an even worse crisis later, is utterly irresponsible.

Jérôme Guillet,

Editor, European Tribune

I'm quite proud that negative concepts like policies that have as their goal making the investment class richer and wealth capture are used in such a publication to describe the reality of current policies. I consider this as my small part in influencing the narrative on the economy, away from corrosive debt-fuelled consumption back towards productive investment.