(Article changed on October 24, 2012 at 06:46)
In the endless swirl of headlines about the current global
financial crisis, the dominant narrative, which is also driving the 2012 U.S.
presidential election, is that crippling amounts of public debt run up by
profligate government spending have brought us to the brink of financial ruin
and must be offset by deep cuts in social services and
"entitlements."
This patently false narrative masks the largest ongoing
financial swindle in human history, a swindle being carried out at public
expense by a small class of elite financial speculators. This speculative class has been unleashed
over the past three decades by a Utopian neoliberal political project now
embodied in its most virulent form, in the Republican presidential ticket of
Mitt Romney and Paul Ryan.
* * *
We are where we are today, in part, Tom Friedman says , because the merger of globalization and information
technology has transformed how goods and services are bought and sold, made and
designed. This merger makes old jobs obsolete ever faster
and spins off new jobs rapidly. Problem
is, all the good new jobs require highly skilled workers who are well educated
in particular fields. And there are not
enough of them.
As a country, we have, at least historically , ensured that our work force kept up
with new technology by steadily expanding public education -- first universal
primary education and then universal secondary education. But
since the 1980s, when we needed to move to some form of universal postsecondary
education to keep pace with globalization and I.T., we failed to make that move. Instead,
our high school graduation rates stopped improving and our growth in college
graduates slowed substantially -- far below what we need for rapid growth and
shared prosperity. Academic standards in
many community and state colleges fell as well.
Today, as a result, we have a major problem. While our workers ages 50 and over may be the
most educated in the world, our younger workers are below the middle of the
global pack for industrialized countries; and our national dropout rate remains outrageously
high, around 25% -- one of the highest in the industrialized world.
How and where did we
go wrong?
Instead of ramping up the education and skills training the
country so badly needs, we created employment for our relatively unskilled workers, by way of a massive
injection of subprime credit that created a large number of relatively
unskilled home construction and retailing jobs.
Meanwhile, Wall Street ballooned,
in part by shifting from an industry
that invested in innovative new firms, to
an industry that funded the creation of unproductive financial instruments, by
which some people made a great deal of money, entirely at the expense of the others
who lost it. In other words, Wall Street,
by and large, became a giant casino. And
billions of dollars that could have been profitably invested, were instead
squandered in the great new Wall Street casino.
In recent years, our job creation engines have been re-oriented: from competitive global markets to inwardly
oriented sectors that were then taken to unsustainable levels, (e.g.,
construction, finance, housing and retail).
The result was a badly unbalanced
and vulnerable labor force. We also overdosed on debt and credit
entitlement, spending trillions of dollars that had to be borrowed instead of derived
from productive and societally beneficial enterprises.
In other words, we got seduced by the riches and rewards of financial
engineering. Too little genuine economic growth, too much
debt, and a Wall Street risk-(gambling)-culture gone crazy. Together, these things culminated in the very
messy global financial crisis of 2008 and its aftermath -- a costly shock to
society, the impact and penalties of which will be with us for years.
For quite some time, America
has under- and mal-invested in education
As we slipped down global rankings (way down), we assumed that our traditional global edge in
entrepreneurship and innovation could compensate for our declines in
educational attainment. But that assumption was faulty in the extreme.
All of this came to a head during the terrible 2000s. The
housing/credit markets exploded, creating a systemic banking crisis and a
painful recession, which coincided with our sharpening education deficit, which
coincided with two wars and a big tax cut for the rich that dramatically
worsened our national deficit.
The result is a kind of deep hole we are in as a nation, and
that hole now requires us (as soon as is practical) to cut spending, yes it's
true. But of far more pressing
importance, it requires us to:
* raise taxes on the rich;
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
3
1
1
