The System Cannot Be Saved

It was painful to watch an albeit under the weather Jon Stewart try to explain to Rachel Maddow his motive behind the DC rally. For while the discussion centered on the cable news media the elephant in room was as invisible as it had been to the 200,000 Daily Show fans gathered in Washington to 'Rally for Sanity' and rebuke Glenn Beck. For while Rachel, incisive intellect that she is, wrings her hands at Stewart's suggestion that she and Bill O'Reilly are ethically equivalent, she is forced to pretend that the problem that divides us is something other than the slow but incontrovertible death of American capitalism.

Put simply. Enslaved to the global financiers our system has grown to opaque and complex to be competently managed. By defending capital while placing the burden of profits on the working stiff our late stage capitalism has devoured its head.

As macroeconomist, Mancur Olson explains in “Power and Prosperity” 'A society that does not shift resources from the losing activities to those that generate a social surplus is irrational, since it is throwing away useful resources in a way that ruins economic performance without the least assurance that it is helping individuals with low incomes. A rational and humane society, then, will confine its distributional transfers to poor and unfortunate individuals.”

The Tea Party faithful are correct to blame our corporate government but their remedy is naive. Contrary to Washington's supposed wisdom, it is not limiting handouts to the poor that defines a free and dynamic economy but limiting rents that flow to the privileged. And the public though confused understands, as did Henry Ford, that a working economy necessarily means putting the power to purchase not in the hands of the investor but the worker. And so does China.

The British economist Samah El-Shahat, writing in August 2009 stated:

"China hasn't allowed its banking sector to become so powerful, so influential and so big that it can call the shots or highjack the bailout. In simple terms, the government preferred to answer to its people and put their interests first before that of any vested interest or group. And that is why Chinese banks are lending to the people and their businesses in record numbers."

In the US and UK, by contrast:

"[B]anks have captured all the money from the taxpayers and the cheap money from quantitative easing from central banks. They are using it to shore up and clean up their balance sheets rather than lend it to the people. The money has been hijacked by the banks and our governments are doing absolutely nothing about that. In fact, they have been complicit in allowing this to happen."

Why, you might ask? Because while we have the surplus labor, thanks to our regressive tax rates which essentially guarantee a woeful commitment to public education we lack the skills to nimbly adapt or attract foreign capital.