So the things got so abusive that it caused a reaction to the
regulation, and then the reaction has gone to far. They've completely deregulated the financial
system, they've taken all the constraints off of debt leverage, they have taken
the position limits off of speculators.
So, it's now gone back to where it was before Roosevelt (laughs). So this sort of thing happens because it gets
out of balance. When one side runs with
it too far it becomes abusive, it becomes too much regulation, and then it
becomes too little regulation. So
keeping the balance requires sensibility, intelligence, and not
ideologies. If the people are committed
to ideologies and are operating ideologically, then it always gets out of
balance.
Rob Kall: It seems, though, that currently we have two
parties that are both on the same side, the corporate side - more than anything
else What do you think about that
statement?
Paul Craig
Roberts: Well, that's true, the two
political parties. But they're not
necessarily identified with Right Wing and Left Wing. What happened to the Democrats was the
offshoring of the manufacturing jobs destroyed the power of the labor unions
and the ability to finance the Democratic party. See, the Democrats were financed by labor,
the Republicans were financed by business, and so there was countervailing
power. They could contain one
another. Neither side could go too far
away from some sort of balance. But when
the unions lost all these manufacturing jobs, and former cities which were
powerhouses in manufacturing just dried up and disappeared, the Democrats then
had to go to the same sources of financing as the Republicans. So now, both parties are dependent on the
same financing, and this then has made it easy for the corporations to control
both parties!
Rob Kall: So you take it back again to
globalization. Again, globalization has
contributed to the loss of us having two really different political
parties. So what do we do about
globalization? Could we just shut it
down? When Bush was president, he just
said "We're not going to participate in the Kyoto treaty." Is it possible that a leader could come along
and say, "We're just not going to participate with the World Bank, and the
World Trade Organization, and NAFTA and CAFTA.
We need to re-write all of them!"
Is that something that could change things? Could that make a difference?
Paul Craig
Roberts: I don't think it could happen
because it serves corporations in the short run. You know, American corporations, not Japanese
or even German, not Chinese, but American corporations are very short
term. The chief executive is there only
four of five years. That's the time he
has to make his fortune, and the way they're making their fortune is by
offshoring. So they're not going to want
-- and the WTO, NAFTA, all these things were set up for corporate interest. So since they have the power now, political
as well as economic, particularly the banks, then they're not going to say, "OK
let's get rid of our get rich quick scheme that's serving us so well." They're not going to do that.
What's happening though is that it's failing. It doesn't work for the industrial countries,
it works for China (laughs), who gets all the offshored production, and so
American GDP becomes Chinese GDP, and American jobs become Chinese jobs, and
American consumer income becomes Chinese consumer income. What's happening is the balance of power in
the world is shifting completely away from the West. It's washed up.
Rob Kall: So what you're saying is, the more trade
agreements that Obama and any President signs, they're basically accelerating
the transition of power to China.
Paul Craig
Roberts: Exactly. Yeah.
And India, other former third World countries, but they're the rising
countries now.
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