Tuesday, October 4, 2011

Jeffrey Sachs on the economy

Economist Jeffrey Sachs has a couple new posts of interest at the Huff Post. The first is a response to Congressman Paul Ryan’s critical review of Sachs’ new book, The Price of Civilization. Ryan claims Sachs has un-American values, meaning "the ideals of individual liberty" without "an intrusive, unlimited government." Sachs rips Ryan a new assholon by arguing that democracy is the prime American value, and what Ryan proposes is counter to that democracy. In Ryan’s eyes protecting the environment, regulating the criminal behavior of banks, promoting science, having a fair tax system and limiting the power of corporations is “unlimited government.”

To the contrary Sachs makes the case that from its inception America has championed the positive role of government in the economy. He quotes Jefferson as opposing banks and corporations in their lust for greed at society’s expense. He also mentions all the federal projects that made possible the infrastructure upon which to do business, like canals and highways. And then there the public investment in education and scientific research, which provided the personnel and ideas for business to employ. Other things the majority of Americans value—i.e, American values—is support of Medicare, social security, help for the indigent, stronger bank regulation and higher taxes on the rich. Ryan’s value conversely are corporate values, as if they were synonymous with American values, especially given the obvious fact that large corporations are shipping jobs overseas to increase profits. Where’s the “America” in those values?

In fact our long-standing American values are being sold to the highest bidder by our representatives. The humongous influx of money set free by Citizens United has unleashed previously unheard of, and often hidden, amounts of money into campaign coffers on both sides. What does this buy? Ryan himself has fought regulation of the banking industry since entering Congress. He supported the repeal of Glass-Steagall, which led to the recent financial meltdown. He was a huge advocate of the bailout, not surprising since his main contributors are the banking and insurance industry. And now he wants further deregulation and lower taxes? Is this sort of corporatocracy really our values?

The second piece says both sides of the aisle are misguided in economic policy. For the Dems is a temporary government stimulus until things stabilize, demand for products rise and the business cycle returns to normal. The Repubs, like Ryan, think excessive regulation and taxation are the problem and reducing both the solution. Sachs though thinks our current situation is the result of a long-term trend fed by a changing global economy with its need for increasing technological innovation. Hence production of such tech like computers and i-pads are shipped overseas for cheap labor, low taxes and virtually non-existent labor laws. And yet the know-how to build newer and better tech is what can create American jobs if but we invested in an educational system to retrain our former production workforce. Instead we are cutting the lifeblood of education funding, where only the already rich can afford to attend.

But how do we pay to retrain our workforce and send poorer people to college? Tax the rich! For the last 30 years they have reaped the benefits of public works to support their record profits. A fair tax system makes them pair back to the society which gave them so much, gave them their roads and bridges, the internet and educated workers. Their tax rates are the lowest in modern history and it is not spurring economic recovery. That’s because for the entire economy to recover the entire population needs to be employed with good work and good pay. Only then can the whole system work for everyone, not just for those that want to rape the system for their own gain with no regard for the rest of us. This is not class warfare against the rich, just asking them to pay their fair share. Is that really too much to ask?

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