But it's disempowering to simply stay angry. There must be ways to fight back. What, Jonathan, do you suggest?

I think you are correct—because this is a bi-partisan problem, it is not an easy task. You can see how that has been playing out in the debate over health care. You’ve got leaders of both parties mouthing the rhetoric—false, I would argue—that we can’t do anything in health care that eliminates free market competition. Well, why the hell not? If the choice is getting rid of the insurance industry and allowing one of the most effective programs in the country’s history, Medicare, (which operates at about 2-3 percent administrative cost compared to 20-30 percent costs in the private insurance business) to replace it versus letting the mythical “free market” stay in business, the same “free market” that has literally killed people and/or made them sick, to me, it’s a no-brainer…if we are thinking rationally based on the facts.

...a tangible commodity. In fact it was once when we were on the Gold Standard. But now that we have severed the connection to gold and silver, the Federal Reserve is free to print as much money as they wish to spend on whatever the government pleases, which they inevitably do, with inflationary effects. We The People should recognize what printing money to be spent by government is... a tax.

Using precious metals to back currency is not ideal, because the quantity of it in circulation can still be somewhat controlled, but it is far easier to create money from thin air if it's just paper and than it is if it's backed by real gold. I'm not convinced that simply because 'every nation which has had the gold standard has failed' is a compelling argument against it. All nations fail eventually, be they on the Gold Standard or something else.

I'm curious to know more about what it would mean to tie the value of the dollar to production... Could you elaborate on this??

Railroad barons. C&H Sugar taking over Hawai'i. The beginnings of Standard Oil. And of course, people like Alfred Nobel making a killing off dynamite. Teapot Dome scandal, Tammany Hall. That Gilded Age.

I would answer this in several ways. My book talks about the continued influence of the Rubbinites—the acolytes of Robert Rubin—like Summers. That whole coterie of people have utterly failed to construct an economic system that shares the vast prosperity that this country has had, and still has. They should be fired, sent into exile and never heard from again. There are plenty of very good, smart economists who ca do a whole lot better and have the peoples’ interests in mind (I think, for example, of a good friend of mine, Dean Baker of the Center for Economic and Policy Research). If we do that, we can start looking at the root causes.

To be optimistic, and I am an optimist by nature (that may come from being a lifelong Yankees fan, though there were some lean years there in my childhood), I think what people just went through in the past year has sent the ground a rumbling…for example, think of all those people who were told to have faith in the stock market and their 401ks because that would be the path to a secure retirement and, then poof, that was gone almost overnight. It was an illusion. So, I think we now have a moment in time to explode the “free market” myth—but it will not be easy, not the least of which is that the party of the average person, the Democratic Party, is not where it should be on challenging the fundamental beliefs that have held back the country from real economic progress in the past 30 years.

...has to do with the field being wide open to make as much money as possible, with no holds barred. Sounds like the thesis of the book (and I haven't read it yet!)

Too me terms like Free Market and Invisible Hand of the Marketplace sound theological, like they're replacements for Paradise and God.

The Invisible Hand could also be likened to Karl Marx's history as a natural force, sweeping all aside.

But it still sounds rather metaphorical. I prefer thinking of the economy as a continuum between decentralized and centralized planning. But the fall of Soviet Communism, and to all intents and purposes Sino-Communism (although they remain totalitarian and authoritarian), shows the dangers of centralized government planning. But the Laissez-Faire and Caveat Emptor that we've been having lately tends to vampirize the system it feeds upon.

I'm not sure what I am, but I see the middle-ground as still Keynesian.

How do we better educate the next generation? How do we frame America's corporate / industrial / economic systems to force some real answers from government on the issues listed?

But do I want to know what pennangalan means?

With you, I'm never sure.

I guess the easiest (laziest?) way to answer this is to quote from the chapter on this:

Members of The Club all had different roles in the looting of America, and were rewarded in various ways depending on their role.

Getting into The Club usually meant you could pocket a nice salary
for doing very little work—such as agreeing to serve on a company’s
board of directors—or, if you were a politician, receive help to remain
in office thanks to the cash the CEO Robber Barons aimed
your way come election time.

The job of The Club was perhaps most important in creating
a justification for the greed of the corporate elite. For example, the
most common argument for paying outlandish salaries to CEOs has
long been that “the market” dictates the necessity of such a high level
of pay. However, who and what exactly is “the market”? It isn’t some
mythical, amorphous God, dispassionate and all-knowing, possessing
other-worldly powers and insight, which hands down the rules
of competition that snags these special human beings. No, the market
is, in fact, the members of The Club. En masse, they descended
on television talk shows, lobbied Congress, met each other at private
parties and dispensed their wisdom to compensation consultants.
It was—and is—a self-perpetuating, self-reinforcing echo chamber;
the CEOs would regurgitate the nonsense about needing to keep
pay competitive, and then hire a small circle of compensation consultants,
who themselves earned huge fees to make sure that CEO
pay went up. Since they all traveled in the same circles, the members
of The Club would repeat, like robots, the “free market” argument
about CEO pay—which was, in turn, picked up by executives and
reporters in the mainstream media, all of whom were either part of
The Club or, in the case of journalists, people who wanted to continue
to have access to the CEOs and other members of The Club. This
incestuous circle occurred across the media and political spectrum,
regardless of ideology.

And The Club was not simply an American phenomenon. Indeed,
the looting of this country could not have happened without
The Club having gone global. Think of the chain this way: a CEO
would look for a way to increase revenues for his company; if he
could do it by chopping wages or benefits or laying off people, all
the better. But, in many cases, it was easier to lower costs and save
money by shifting jobs overseas, exploiting cheap labor in China and
other countries.

All this was enabled by the world of so-called “free trade,” whose
cop on the beat is the World Trade Organization. The WTO, as one
of its staff members put it, “is the place where governments collude
in private against their domestic pressure groups.”1 When it comes
to trade, the U.S. government—and, frankly, the majority of governments
around the world—are represented by professional lawyers
(many of whom come from corporate lobbying backgrounds) who
are devoted to the mission of advancing the “free trade” mission. As
consumer advocate Ralph Nader puts it, “The first thing a dictator
wants is for no one to know what he’s doing…The whole W.T.O.
process is a marvelous collage of privileged exclusion to make decisions while groups of the citizenry don’t know what’s going on and
aren’t free to participate in these power plays.”

For the members of The Club, “free trade” was, and is, a very useful
and powerful weapon, as it gives off the impression that the elite
is working on behalf of the citizenry—even if, at the end of the day,
broad prosperity did not arise from “free trade,” except if you were a
member of The Club, who usually profited quite handsomely.

END QUOTE FROM BOOK...

As for Rubin, in brief, I would say that he has always been the perfect “fixer”—he can move effortlessly between the worlds of Wall Street and government, between both parties and build the bridges that protect The Club. Rubin encouraged the increased use of leveraging (dangerous leveraging, as we now know) as an economic strategy. You may notice that he has gone quiet silent recently—that’s primarily because he is trying to avoid any fingers being pointed at him for the mess at Citibank, where, as one of its chief board leaders, he oversaw the strategy that would bring us the financial meltdown of last year. And he did much of that based on the quite oft-promoted view of the Clinton-Rubin “good years”—which I think is bogus.

And I note in passing the current post on your front page by Susie Madrak about the compensation for the aides to Tim Geithner (he, a great Rubin protégé) and, more important, the links and relationships that exist between The Street and the government and how those links may influence how we change the system—or don’t change as the case may be.

In brief, pay is only a small part of the robbery they engineered. The real money they walked away with has come via stock options and pensions on a staggering scale—and much of the stock option grants were just a scam that was aided and abetted by complaint boards of directors (chock full of the CEO’s friends and allies).

Some of this stuff you can’t make up. This was my favorite, from the book:

Vodka spouting from a penis must be a sight to see. And, vodka
spraying from the penis of a replica of Michelangelo’s David must
be something even more amazing to behold. Indeed, it is quite unusual
to find the words “Vodka,” “Penis” and “Michelangelo” linked
together in the same sentence.

For that unique string of words, we can thank Dennis Kozlowski
and, one assumes, the great love he had for his wife. In 2000,
Kozlowski decided that his second wife, Karen Mayo, deserved a
top-of-the-line party in honor of her fortieth birthday. So he flew
seventy-five guests to the Hotel Cala di Volpe in Sardinia, Italy,
where the privileged invitees played golf and tennis, ate fine food,
listened to a performance by the singer Jimmy Buffett (who was
paid a fee of $250,000 to appear) and enjoyed a birthday cake in
the shape of a woman’s breasts festooned with sparklers on top.

However, the defining extravagance of the party was an ice sculpture
of Michelangelo’s David featuring vodka spouting from its penis. I
wonder what people thought as they stood watching such a spectacle.
Did they think it was funny? Erotic? Artistic?

At the same time, I wonder if anyone at the party even gave a
passing thought about who had paid for the over-the-top festivities.
I suppose that a man should be allowed to throw a lavish birthday
party for his wife, even if the excess and bad taste border on the
bizarre. And, if you want to foot the bill—in this case, $2 million—
then heck, knock yourself out.

But Dennis Kozlowski had a small problem, which ended up
being quite a large problem—the money for the party came out of
the coffers of Tyco, Inc., the company for which he served as chief
executive officer.
END BOOK QUOTE

Well, it depends. Some of these guys—and not enough—are under investigation for what was, in my view, a massive fraud.; a lot of them should go to jail but will probably skate and live the life of fabulous wealthy people. The long term effect is this—millions of people will live a much more precarious life, perhaps for the rest of their lives, because they got deeply into debt because of the entire real estate illusion. To be clear, not because most of them actually bought homes beyond their means—but because of the way in which the real estate bubble reflected a larger illusion in the economy: that prosperity could be gained without real wage gains, which most people had not see in 30 years relative to productivity. Most people survived on debt. We didn’t achieve the American Dream. We rented it.

I, and many others, have advocated that very idea. If you search my site www.workinglife.org (try Tobin Tax) you will find such proposals--and actually there is a lot out there on the web about it. I am entirely in favor of that.

Why does the United States suffer from greed more than other, older established countries? It has to do with the pioneering aspect, the need to set up shop across the native lands and "civilize" them with our industries. The environment and quality of life be damned. That's why we need a new economic/political system. One that demands quality of life, value in work, and less greed.

Well, let me quickly say again--it was great to do this. Thank to C&L for inviting me and for all your great work and the community you have here. and especially thanks to Nicole for all the work and guidance!

I posted these earlier in response to an earlier question. so, here it is again:

#1Immediately raise the minimum wage to $10 an hour,
with additional increases over the next five years until it reaches $20
an hour, which would begin to return some level of justice to working
America.

#2 Pass H.R. 676, the so-called “Medicare for All Now”
bill, in order to enact single-payer health care.

#3Create a national guaranteed universal pension plan,
backed by the government, so that people can be sure that their retirement
years will not be threatened by the wild swings of Wall
Street.

#4: Repeal the Bush tax cuts, and raise the top income tax
rates—at a minimum—to 40 percent and 45 percent, and add a new
50 percent income tax bracket for those with taxable income over $1
million. In addition, tax investment income as ordinary income.
Until we stop the moronic rhetoric that says that every economic

#5: Pass the Employee Free Choice Act. The single most
important step we can take to rebalance the levels of power in our
economy is to increase unionization.

#6Publicly-financed elections

# 7:We need to push for changes that impose a proportional
pay cut on executives equal to whatever pay cuts their workers
are forced to take—and I would add that, given the level of pensions
granted executives, it should not be a one to one ratio, but one that
significantly scales back executive pensions in comparison to rank and file workers.

It was great having you here.

Our economy is in the commode?