In short, it wasn't until the last two (or so) decades that the USA decided to allow the financial, insurance, and real estate (FIRE) sector to surpass manufacturing. Phillips notes again and again that this overdependence on FIRE to run the US and global economy and provide GNP figures to rise is unparalleled in world history.
How could Americans have allowed this to happen? What happened to big projects that would have raised American production, like better directed investment into manufacturing and alternative energies. Imagine what we would be facing today if President George W. Bush had said in 2001 (in the wake of 9-11) that Americans should save more and invest in good products like regional metro lines and more efficient transport systems, instead of simply telling citizens to "borrow and consume consume consume!"-
I'm sure there would have been a much smaller real estate and economic bubble over the past 6 to 7 years.
Moreover, fewer Americans would have gone bankrupt of lost savings and houses over the same period.
Over-reliance on predominantly on the financial sector is a losing approach for great nations. History shows this. The USA must invest in infrastructure and good sound construction, production and manufacturing""in balance with other sectors of the economy.
Americans cannot afford to continue to be exposed to so much debt. A great nation cannot borrow its way from one crisis to another.
BUSH FAMILY'S BIAS & THE USAWhat is worse, no presidency in USA history has been so dependent on the FIRE (finance, insurance and real estate) sector for its campaign financing as the George W. Bush Administration. Phillips writes,"In the mid-2004, the Center for Public Integrity tabulated the leading lifetime patrons of George W. Bush: the big four were Morgan Stanley, Merrill Lynch, PriceWaterhouse Coopers, and MBNA, the credit-card giant. The [Bush] family background also blended these same origins and commitment."-
This does not mean that the Clinton Administration didn't make the same sort of errors in abandoning more secure economic development in the areas of manufacturing (and in the areas of failing to reduce the average American's debts, including education, investment, real estate, and credit card debt). However, the number of economic bubbles created in the last decade dwarfs the previous record-setting levels of the 1960 through and early 1990s.
Long-time critiques of the rise of this unfettered finance, insurance and real estate industries over the past few decades have called this phenomena the "Rise of the U.S. Debt and Credit-Industrial Complex."-
It is a debt system of short-term joy which promotes long term pain and high cost of living for most American.
THE DEBT AND CREDIT INDUSTRIAL COMPLEXThe hollowing out of the U.S. manufacturing and production economy has been propelling the casino-like nature of the world's largest debtors--the U.S.A. and its citizens.
The solutions are clear:
(1) We, the people of the USA, need some control over banks, insurance, investment, and real estate lenders as long as the liasse faire system fails to stop greed from ruining so many American's lives.
(2) America needs to build real things to sell and produce for all--for example: high speed trains, local alternative energy sources, local manufacturing and construction, and products and educational or health services that help reduce our mammoth personal and national "important-export"- deficits.
(3) The federal government needs to reduce its own debt and encourage Americans to save.
(4) The USA must become more supportive in the creation of jobs and education. Debt elimination in these two processes need to be important secondary goals of these areas of the economy. This means: Don't unnecessarily encourage large or medium sized debt by individuals on the behalf of banks, even to jump start spending!
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