FAYE ARMITAGE
Guest Column: Congress, president ignored crisis
By FAYE ARMITAGE
St. Johns
Publication Date: 09/28/08
Our lawless financial system has been a disaster since the 1980s, when the savings and loan debacle cost hundreds of billions in taxpayer bailouts. Still, Congress and the President slept.
Take away the rules, and it's human nature to run amok.
Without speeding laws, people speed. Speed kills.
Similarly in free market capitalism, it is a myth that supply and demand imposes the "brakes" that supply side economists long claimed.
For an unregulated free market system to function optimally, transparency and informed participants are required so is healthy competition. All three elements are missing instead we have secrecy, uninformed decision makers and shared monopolies (oligopolies). There isn't anybody who fully understands the repercussions of market decisions with today's complex financial instruments (like derivatives). Reckless investment bankers spend what Justice Brandeis called "other people's money."
TV propagandists gloss over capitalism's darker side. We need public scrutiny, accountability and meaningful economics education. We need healthy government intervention to protect the public from the powerful forces of private self-interest (a/k/a greed).
Government must become proactive, to prevent economic catastrophes. Government must work to protect all, citizens, not just the wealthy. "Trickle down" economics has failed. For too long government has shirked its job to protect 99 percemt of our people, while failing executives walk away with golden parachutes worth as much as $161 million.
We must have reform with built-in safeguards, rather than crisis management and hearings after the fact.
Milton Friedman scoffed at cartels abusing ill-conceived government regulations like the Texas Railroad Commission and federal agencies telling oil men how much oil they can produce on what days, making overproduction a crime under the Connolly Hot Oil Act. Friedman called it "featherbedding."
Society's economic goal must not be to ensure the wealth of a few, at the expense of the many. It must benefit all of us, and achieve fairness as well as efficiency. Friedman also claimed that workers are paid according to their productivity, but wage gains have not matched productivity gains in recent years.
Declining real incomes show that the few are exploiting the many. Congressman John Mica recently asked where the "plan" is by Democrats to "lower" gasoline and food prices. His plan is more of the same for the oligopolists who raised one million in campaign contributions for him. My plan is to listen to you and represent you what America's founders had in mind.
"Ben Bernanke, the chairman of the Federal Reserve, and Hank Paulson, the Goldman Sachs tycoon who became U.S. Treasury secretary, have done more for socialism in the past seven days than anybody since Marx and Engels." That's how the London Guardian newspaper put it. Bush-style "corporate socialism" is "corporate welfare for the rich." It's wrong. It's immoral.
People die without health care in the world's richest country Yet we're spending an excessive 16 percent of GDP on health care, with charges rising five times inflation. The New England Journal of Medicine estimates we'd save some $350 billion annually with a Medicare-for-all system, like President Harry Truman first proposed in 1945.
Americans blame Republicans over Democrats by a 2-to-1 ratio for the financial crisis. We can't afford more of the same. Americans are justifiably angry at those who betrayed us.
Vote Nov. 4th. Our families' futures depends on it.
Faye Armitage is an economist and soccer mom from Fruit Cove. She is running for Florida's Seventh Congressional District against against U.S. Rep. John Mica.
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