To Comfort The Afflicted
And Afflict The Comfortable

To Comfort The Afflicted And Afflict The Comfortable

Tuesday, June 2, 2020

New Observercast

The Importance of Learning From Mistakes

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VernTurner BY VERN TURNER

To err is human, of course, but is not learning from mistakes also human? It seems so when it comes to economics and politics in recent, post-industrial revolution times.

So, why are we constantly in a pickle when it comes to operating a successful economic theory, or a form of government in a highly complex world?

You are probably already cataloging reasons, but some are just so obvious as to boggle the mind that success hasn’t been a strong enough motive for continuation of those actions that yield success.

It has been repeatedly proven that Keynesian economics trumps austerity-only, Reaganomics or trickle-down, supply-side economics. So, why doesn’t the world get it?

The world’s economy is consumer-based. Other than the manufacturing of war machines, humans around the world make stuff for other humans to buy and use. The logic extends to the basic fact that consumers need the medium of exchange to purchase those goods and services; money flows and demand creates jobs for more goods and services. This even applies to health care devices and hospitals. Some argue that this model must change to a limited growth philosophy as we approach the limit of resources.

Since Ronald Reagan’s administration started the ball rolling, Wall Street has been allowed to abuse regulations and rules to gamble with depositor money. Finally, in 1999, Bill Clinton signed off on the overturning of Glass-Steagall, thus allowing banks to merge their service [depositor] and investment [gambling] branches and form the largest crap game the world has ever seen. So, naturally, greed won and the poor investors lost their butts to the moguls of money and the hubris of hedge fund hedonists. This was just the latest example of not learning from mistakes. Did we so easily forget the post-gilded age attacks on regulation from the Coolidge/Hoover administrations? Yet even then there were some progressive policies that saved the working classes from virtual slavery.

Now, the new indentured servant populations of China and other Asian countries are contributing to the profit-driven mindlessness of the corporate world. Asia has become the manufacturing floor for the West. Along with the relaxing of regulations that allowed corporations to ship jobs overseas and reap tax benefits in doing so, the profits from dirt-cheap labor ballooned the stock value of these corporations to the point of being on very shaky ground. Sure enough. As of the first week of January, China has been hit with a stock panic due to lack of demand for products produced there. Uh, oh.

Since most of the companies manufacturing in China have stock markets and holdings in western countries, China’s upset stomach is transferring instantly to Wall Street as acute indigestion.

Good-paying jobs left consumer countries for Asia and South America. Austerity-only economics applied, stubbornly, by various western countries still trying to recover from the deregulation-of-banks orgy from the Bush Administration continue to deprive the world economy of its money supply. The result is that consumers have less and less money with which to consume. Say hello to the next recession.

My basic question is probably rhetorical to corporate/banking America: How much profit is enough? The answer is equally obtuse, but telling. In the words of John D. Rockefeller, “Just a little more.”

This open-ended profit motive creates its own defeat, as Karl Marx to eloquently pointed out 160-some years ago. No, it doesn’t mean that our current level of socialism will suddenly become a commitment to the dreaded Communism that right-wing pundits have feared so much. Capitalism, on the other hand, must have regulation and controls or Marx’s prophecy will certainly come true. There is a kicker here, that isn’t often mentioned.

In Marx’s 19th Century, the world population was around two billion souls. By the end of World War II, the human population approached three billion. In the next seventy years, or so, the number of humans grasping for resources and profit is approaching eight billion. This is known as exponential growth. Leaders of large human populations often trumpet the theory of opportunity for all and promote better lives for everyone that are free of disease, malnutrition and ignorance. Sadly, nearly 25% percent of those eight billion see none of this largesse. Even more telling about the human condition is that all but several million people have no worries from want. How is this possible?

Well, it seems that the money supply has been hijacked by the corporations and banks around the world who have “invested” in their governments. A few democracies have resisted the temptation to give in to corruption, but most are on the fast track to oligarchy and despotism as their form of government. We haven’t learned that lesson, either. Anyway, austerity drains consumer money and money from social services, so not even socialistic countries can serve their people with any equality of basic needs. Add to that the bizarre tax-avoidance behaviors allowed by the United States [and to a MUCH less degree by other countries] of its richest corporations and individuals and even more money is drained from the system and deposited with the elites. In the United States alone, around 400 individuals own more wealth that the lower 57% of the entire population. This trend has been increasing with fewer individuals actually acquiring increasing amounts of the wealth available. There are even some studies that show nearly $35 trillion locked away in safe from taxes, off-shore bank accounts. This, while 47% of our citizens – in the richest country on Earth – are food insecure.

I could continue with the statistics and data that show how rapidly we are moving toward the next global depression and the subsequent revolutions that will ensue. I include the United States as a nation vulnerable to revolution. The next “recession” won’t have a Federal Reserve bailout, because the trillions of dollars lying there were used to bail out the banks from their gambling habit in the early 2000s. The bankers used that money to pay themselves bonuses and paid off the bad debts with a fraction of that taxpayer money.

This is how revolutions start. You can look it up. It’s almost always about where the money goes and who has it and is reluctant to share any of it. It’s the inherent human instinct to hoard that will be our undoing, because we learned to hoard to survive 200,000 years ago when there were just a few million of us – if that many – and a whole world to exploit. The game, as it is said, is now up. Is it too late to learn from our mistakes?

– Vern Turner lives in Marble Falls, TX, and is a regular contributor to The Oklahoma Observer. His latest book, Racing to the Brink: The End Game for Race and Capitalism, is available through Amazon.com.

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Vern Turner
Vern Turner
Denver resident Vern Turner is a regular contributor to The Oklahoma Observer. His latest book, Why Angels Weep: America and Donald Trump, is available through Amazon.
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