Economists purport to have trouble seeing these effects in the numbers. But consider a dirigible into which someone has punched a small hole. The inevitable long-term outcome is that the pressure inside the dirigible will come to match the pressure outside. But while this process is ongoing, one would be hard-pressed to detect evidence of the leak from anywhere within the dirigible except right at the point of the leak. One can, however, observe the gradual decline in pressure from anywhere inside, and we have indeed seen a relative decline in the wages of the bottom 40%, and even 80%, over the last thirty years. (It's actually worse than that. The relative increase in income among the top 20% is entirely accounted for by the top 1% of income earners.) Our economy has been pricked with a gazillion tiny leaks, each one individually beneath notice, but with profound cumulative impact. The damage to our economy has been much greater than the $50B we save each year at Wal-Mart. We have been beguiled by cheap imported goods the same way the American Indian was deprived of his birthright with trinkets and cheap liquor.
The collapse of the bubble economy now exposes the sober reality that has been shaping up beneath the hype and glitter. When it comes time to revitalize the real economy, very little is found to be shovel-ready. When the banks are urged to lend, they see very little of promise. And when it comes to Wall Street investment firms, American labor remains as poor a bet as ever. This is a reflection of the power realities that have come to the fore over the last thirty years. Just as American labor has been neutered, so has the entire American government, right up to the Supreme Court. Our democracy matters only at the margins. Adherents on both sides of the political spectrum are thrown red meat in terms of the social issues to distract them. As far as the larger issues are concerned, we have been reduced to bystander status.
In addition to having been sold a bill of goods on globalization, we have been fed the line that we must look to Wall Street to fund innovation. But that is not where innovation comes from. The larger the institution, the more it is concerned with self-preservation. And the more a large institution feels threatened, the more it turns to a short-term perspective, i.e. toward tactical rather than strategic thinking. Neither of these is conducive to the pursuit of novelty and the undertaking of risk.
Just as the large energy interests of Carter's era---oil and
nuclear---snuffed out innovation on the energy front, the automobile companies
kept innovation at bay as best they could in their arena. Even when GM was
forced to innovate by California's zero emission requirements, they immediately
abandoned their own innovation as soon as they had successfully twisted the arm
of the California regulators.
We have other famous examples of how large institutions dealt with innovation. Bell Laboratories invented both the transistor and the laser, but AT&T, the parent company, was not able to parlay either of those discoveries into commercial success. The innovations that became the Apple computer had previously been orphaned at Xerox Palo Alto Research Center when Xerox management didn't recognize their value. Further back, the original inventors of the Xerox process famously had difficulty finding sponsors for its development. Even Microsoft largely grew through acquisitions of the innovations it needed, rather than through internal developments. The story is consistent. Large enterprises are not the incubators of true innovation. On the contrary, they are institutionally hostile to it.
By now we see large corporations either fighting progress on
various fronts, or bringing up the rear. We have seen this before with regard
to smog, acid rain, toxic waste reduction, cleanup of our waterways, and rapacious
forestry practices, and we are seeing it now with regard to global warming, renewable
energy, innovations in health care, securing stability in the financial sector,
and even military procurement.
What does it say about the locus of power when companies are able to compel even the Pentagon to accept stuff that it does not want? What does it say about the independence of the media when none could be interested in the fact that two of our Presidential elections were stolen?
President Carter's approval rating went up 11 points after his famous speech, but very quickly its impact was dissipated by media spin. That set the stage for our Teflon President, under whose aegis Carter's worst fears were even further actualized. We also saw the first of the bubbles, in the Savings and Loan scandals, and the first of the large-scale financial bailouts. That period was followed by Alan Greenspan's bubble economies, first under Clinton and then under Bush. Both ended badly.
And so here we are. As Carter's
admonitions were not heeded then, they are still relevant now. There needs to
be a power shift back toward the American people. This is unlikely to happen in
the absence of the public financing of elections. There needs to be
revitalization of our electoral process through such changes as instant runoff
voting and the ability simply to vote "None of the above" (they even have that
in Russia!). There must be the creation
of a journalism that cannot be yanked by the money chain.
There needs to be a restoration of the social contract that the basic conditions of life should be guaranteed to every American citizen. As one of those basic conditions, there must be the chance at meaningful participation in the economic life of the country. There must be the restoration of tax equity, where those who profit from our society also pay its bills. And for the sake of our collective well-being there must be a leveling of the playing field for the true innovators that our nation continually brings forth.
*) Voting yes in favor of drug importation was Leahy, Sanders, Feingold, Harkin, Franken, Brown, Boxer, and Feinstein along with McCain, Sessions, Shelby, Graham, Cornyn, Vitter, Grassley and DeMint.
Voting no was Reid, Schumer, Levin, Rockefeller, Dodd, Lieberman, Inouye, Durbin, Bayh, Kerry, and Lautenberg along with Kyl, Inhofe, Lugar, Chambliss, Cochran, Bennett, and Hatch. Never again will such an alignment of votes be seen. Only the overweening influence of corporate interests can explain it.
Sources: "What the Heck Are You Up To, Mr. President?" by Kevin Mattson, 2009, Bloomesbury, New York
"The Trap," by Sir James Goldsmith, 1993, Carroll and Graf, New York
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