By Ron Forthofer
Posted: 11/14/2010 01:00:00 AM MST
The Daily Camera
I’m afraid we’ve almost reached a point of no return on the road to total domination by a small number of wealthy and powerful people. Throughout our history, “we the people” have struggled to protect our rights and interests against attacks from a few elite. Unfortunately we have been losing ground in this battle, particularly since the early 1980s. We were then hit by the one-two punch of: 1) the financial sector gaining more influence on government; and 2) the religious-like devotion of many economists, politicians and pundits to the unregulated free market despite overwhelming evidence that it doesn’t work.
The financial sector
James Madison and Thomas Jefferson strongly warned about the dangers of allowing banks to have control over our currency. Additionally, Andrew Jackson’s opposition to and veto of the renewal of the charter of the Second Bank of the United States are well known. In his farewell address in 1837 Jackson said: “It is one of the serious evils of our present system of banking that it enables one class of society–and that by no means a numerous one–by its control over the currency, to act injuriously upon the interests of all the others and to exercise more than its just proportion of influence in political affairs.”
Theodore Roosevelt’s address to the 1912 Convention of the National Progressive Party strongly echoed Jackson’s concern. In 1913, despite Roosevelt’s warning, government created the Federal Reserve in a flawed attempt to solve our financial problems. The name Federal Reserve made it sound as if the government finally had control of our monetary policy. However, the government doesn’t control the Federal Reserve. In reality, a small number of privately owned gigantic banks effectively still control our currency.
The free market
In November 2008, at the height of the financial crisis, Michael Skapinker of the Financial Times wrote: “The cry of ‘leave it to the market’ has lost any credibility. This is the second time in less than a decade that the market has shown its inability to prevent corporate excess…”
The 2008 financial meltdown and the concomitant Great Recession are, unfortunately, only the latest in a long line of major financial crises. Since 1790 the United States has experienced 47 recessions including numerous major panics and depressions accompanied by terrible suffering.
Speculation by the financial sector played a major role in creating this volatility while decisions made by politicians and the courts also contributed. Increased deregulation and privatization of the economy as well as changes in the tax policies have played an especially detrimental role since the 1960s. Deregulation or lack of enforcement of regulations along with low interest rates allowed some in the financial, insurance and real estate sectors to commit crimes and/or to take huge risks that brought the world to the edge of financial collapse in 2008. Many of these policy changes and subsequent bailouts have also led to the transfer of even more wealth from ‘we the people’ to a relative few at the very top of the wealth ladder.
Our current status
Americans are legitimately outraged at the Bush/Obama bailout of the too-large-to-fail corporations in the financial sector while relatively little was done to: 1) prevent a future crisis; and 2) to help ordinary citizens.
As a result of past policies and the 2008 crisis:
~ almost 44 million (one in seven) Americans live in poverty;
~ about 27 million (one in six) workers are unemployed or underemployed;
~ almost 51 million (one in six) Americans lack health insurance;
~ about 3 million American homes will be foreclosed on this year, a slight increase over the 2.8 million in 2009;
~ approximately one in four homeowners with mortgages owe more on their mortgage than the home is worth;
~ the richest 1 percent of Americans received about 21 percent of the total income in 2008;
~ the U.S. inequality between the rich and the rest of its population is the greatest among Western industrialized nations; and
~ the U.S. democracy has further been weakened.
Our situation is far worse than in almost all other industrialized Western nations. Is the control of our government by a relatively few wealthy elite acceptable? Isn’t it past time to consider changes to the U.S. approach?
Among the many groups working on these issues are: United for a Fair Economy, Move to Amend, and the local Rocky Mountain Peace and Justice Center at 303-444-6981. Get involved and make a difference before it`s too late.
Ron Forthofer lives in Longmont.