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Author Topic:   What Went Wrong & The Price of Civilization
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Message 1 of 5 (762926)
07-17-2015 10:41 PM

I have been reading these two books—one I keep at work and one at home—and I must recommend them:
What Wend Wrong: How the 1% Hijacked the American Middle Class ...and What Other Countries Got Right by George Tyler

The Price of Civilization: Reawakening American Virtue and Prosperity by Jeffrey Sachs

They are two separate books by two separate authors, but they deal so closely with similar topics that I can never really remember which book I've gotten certain facts from. I am only about half way through each book.

What Went Wrong deals with the effects of Reaganomics in America (and to a lesser extent other countries that have tried similar tactics) and how other countries have prospered despite living in the same social and economic world as America by instituting meaningful policies that put the prosperity of families before the profits of businesses.

The Price of Civilization looks at the effects of globalization and changing social values on American economic and social prosperity and the role politics and the government have played in helping (or not helping) America adjust to these changes.

Both authors are critical of the political and economic policies of Republicans in the last several decades. For example, they both speak disparagingly of Alan Greenspan. Tyler discusses Greenspan's role in undoing the budget-balancing trend of Clinton:

George Tyler in What Went Wrong (2013):

It was a breathtaking moment in American fiscal history with budget surpluses projected to entirely eliminate the national debt in just seven years. But in one of the oddest and most memorable incidents in American fiscal history, the chairman of the Federal Reserve was aghast at the prospect. Days after George Bush took office, Greenspan appeared before the Senate Budget Committee on January 25, 2001, eagerly endorsing big tax cuts. His logic was bizarre, breathtaking nonsense: Clinton's budget surpluses were so large and certain that they would pay off the national debt in 2008, requiring the US Treasury to then invest further surpluses in private sector assets and cut taxes. Avoiding that prospect "required" immediate tax cuts to eliminate the budget surpluses. And the Republican dominated Congress and George W. Bush quickly agreed. (pp. 208–209)q

Sachs describes Greenspan's obliviousness to the effect things like global competition of the labor market was having on the American economy:

Jeffrey Sachs in The Price of Civilization (2011):

As Federal Reserve chairman from 1987 to 2006, Alan Greenspan presided at the Fed during the rise of the new globalization. Yet, like Reagan, he basically misunderstood or neglected this crucial phenomenon on repeated occasions. By treating the United States as a closed economy, he continually overlooked the severe risks of his own policies and thereby helped stoke several financial crises, including the megameltdown of 2008.

Greenspan was fixated on a key point: that as much as he pushed down interest rates to spur consumer spending and housing purchases, U.S. inflation remained low. He considered this a miracle of U.S. productivity, that the economy had a new growth potential because of a surge of innovation in the "new economy" of information technology. His staff repeatedly demurred, saying that such a surge of productivity could not be found in the data. Greenspan persisted, however, insisting that low inflation could be explained only by the elusive productivity miracle.

He missed the real point, and with serious adverse consequences: inflation was being held down not by a productivity miracle, but by the surge of consumer goods that were arriving from China.
All of these adverse outcomes suggest that it was imports from abroad, rather than a productivity surge, that was the main reason for low inflation. The Federal Reserve's easy monetary policy succeeded in creating manufacturing jobs, but in China, not in the United State. (pp. 91–92)

Something interesting that I just finished reading from Sachs's book relates demographics to the shift in political power (toward batshit crazy) despite the overall attitudes of American's remaining "generally moderate and mostly generous in spirit" (p. 84). Sachs points out that even though American values have been more moderate than not, the migration of liberal northerners to conservative southern state has increased the political power of those states while the immigration hasn't been great enough to alter the majority political position in those southern regions (a modern day 3/5 effect, if you will):

Jeffrey Sachs in The Price of Civilization (2011):

Here is a funny thing about the rise of the Sunbelt anti-government political power: it created Sunbelt power without necessitating a nationwide swing in values. The shift in the Sunbelt's demographic and economic weight was enough to give rise to a new national political orientation. (p. 74).

Anyway, you all know I find this stuff fascinating, and these are some of the best books I've read on these topics.

Anyone who wants a good analysis that puts the decline of American society into proper perspective really needs to read these books.

Love your enemies!

Replies to this message:
 Message 2 by Jon, posted 07-19-2015 12:20 PM Jon has acknowledged this reply
 Message 3 by Diomedes, posted 07-19-2015 4:30 PM Jon has responded

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Message 2 of 5 (763004)
07-19-2015 12:20 PM
Reply to: Message 1 by Jon
07-17-2015 10:41 PM

The Economic Crisis
Who's taken carried the brunt of the economic crisis?

Jeffrey Sachs in The Price of Civilization (2011):

There is absolutely no crisis in corporate America. Consider the pulse of the corporate sector as opposed to the pulse of the employees working in it:

  • Corporate profits in 2010 were at an all-time high.
  • CEO salaries in 2010 rebounded strongly from the financial crisis.
  • Wall Street compensation in 2010 was at an all-time high.
  • Several Wall Street firms paid civil penalties for financial abuses, but no senior banger faced any criminal charges.
  • There were no adverse regulatory measures that would lead to a loss of profits in finance, health care, military supplies, and energy
 (pp. 130–131)

Love your enemies!

This message is a reply to:
 Message 1 by Jon, posted 07-17-2015 10:41 PM Jon has acknowledged this reply

Inactive Member

Message 4 of 5 (763036)
07-19-2015 8:13 PM
Reply to: Message 3 by Diomedes
07-19-2015 4:30 PM

I've been debating whether to take the time to watch that film, but now that you've mentioned it I am going to make it a point to see it.

Oligarchy, here we come!

Sachs refers to the system as a corporatocracy, but I agree with you that oligarchy is a more apt descriptor.

The current system works to serve a few wealthy elite and everything is sacrificed for their benefit, and this includes the corporations, which are routinely destroyed as CEOs rape them for profit. The businesses upon which many depend for employment go bellyup, pay the fines for their executives' misdeeds, and then get passed on to the next guy to reem while the others take off like bandits and move on to the next company (or Washington).

Love your enemies!

This message is a reply to:
 Message 3 by Diomedes, posted 07-19-2015 4:30 PM Diomedes has responded

Replies to this message:
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