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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsObama has to Explain Why Fairness is Essential to Growth & Some Democrats Have to Stop Believing It
http://robertreich.org/post/23640146977by Robert Reich
The Cory Booker imbroglio has ignited a silly but potentially pernicious debate in the Democratic Party between so-called pro-growth centrists who want the President to focus on how well hes done getting the economy back on its feet after the Bush administration almost knocked it out, and pro-fairness populists who want him to focus on the nations widening inequality and Wall Streets (and Romneys) continuing role in generating profits for a few at the expense of almost everyone else.
According to the National Journals Josh Kraushaar, for example:
Conversations with liberal activists and labor officials reveal an unmistakable hostility toward the pro-business, free-trade, free-market philosophy that was in vogue during the second half of the Clinton administration
.. Moderate Democratic groups and officials, meanwhile, privately fret about the partys leftward drift and the Obama campaigns embrace of an aggressively populist message
[T]hey wish the administrations focus was on growth over fairness.
This is pure bunk or should be.
Fairness isnt inconsistent with growth; its essential to it. The only way the economy can grow and create more jobs is if prosperity is more widely shared. The key reason why the recovery is so anemic is so much income and wealth are now concentrated at the top is Americas the vast middle class no longer has the purchasing power necessary to boost the economy.
The richest 1 percent of Americans save about half their incomes, while most of the rest of us save between 6 and 10 percent. That shouldnt be surprising. Being rich means you already have most of what you want and need. That second yacht isnt nearly as exciting as was the first. It follows that when, as now, the top 1 percent rakes in more than 20 percent of total income at least twice the share it had 30 years ago theres insufficient demand for all the goods and services the economy is capable of producing at or near full employment. And without demand, the economy doesnt grow or generate nearly enough jobs............
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related:
Why Obama Should Be Attacking Casino Capitalism (Both Bain AND JPMorgan)
http://www.social-europe.eu/2012/05/why-obama-should-be-attacking-casino-capitalism/
I wish President Obama would draw the obvious connection between Bain Capital and JPMorgan Chase. That way his so-called attack on private equity is neither a personal attack on Mitt Romney nor a generalized attack on American business. Its an attack on a particular kind of capitalism that Romney and JPMorgan both practice: Using other peoples money to make big bets which, if they go wrong, can wreak havoc on the economy.
Its the substitution of casino capitalism for real capitalism, the dominance of the betting parlor over the real business of America, financial innovation rather than product innovation. Its been terrible for the American economy and for our democracy. Its also why Obama has to come out swinging about JPMorgan. The JPMorgan Chase debacle would have been prevented if the Volcker Rule were sufficiently strict, prohibiting banks from using commercial deposits to make bets except very specific offsetting bets (hedges) on narrow classes of trades.
But Jamie Dimon and JPMorgan have been lobbying like mad to loosen the Volcker Rule and widen that exception to include the very kind of reckless bets JPMorgan made. And theyre still at it, as evidenced by Dimons current claim that the rule that eventually emerges would allow those bets.
As a practical matter, the Volcker Rule is hopeless. It was intended to be Glass-Steagall lite a more nuanced version of the original Depression-era law that separated commercial from investment banking. But JPMorgan has proven that any nuance any exception will be stretched beyond recognition by the big banks. So much money can be made when these bets turn out well that the big banks will stop at nothing to keep the spigot open. Theres no alternative but to resurrect Glass-Steagall as a whole. Even then, the biggest banks are still too big to fail or to regulate. We also need to heed the recent advice of the Dallas branch of the Federal Reserve, and break them up...........
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Obama has to Explain Why Fairness is Essential to Growth & Some Democrats Have to Stop Believing It (Original Post)
stockholmer
May 2012
OP
Scuba
(53,475 posts)1. "Fairness isn’t inconsistent with growth; it’s essential to it. "
Thanks for posting!