OUR SLIDE TO ECONOMIC BANKRUPTCY: WHAT’S TO BLAME? WHO’S TO BLAME? DEBT? GLOBALIZATION? UNIONS? OBAMACARE?
Many agree that we are sliding to economic bankruptcy; so what’s to blame? Who is to blame? How do we stop this seemingly inexorable slide? Over the past week, many have sought to answer these questions.
Charles Lane writes in the Washington Post about the parallels between the debt-laden landscape of Greece and the public-debt burdened cityscape of Detroit in “Detroit’s Greek tragedy:”
Liberal economists have a ready response to conservatives who fret that U.S. debt might spiral out of control, a la Southern Europe: “America is not Greece.”
It’s true. Greece has much more public debt than does the United States, relative to economic output. Unlike Greece’s euro-denominated obligations, U.S. debt is in U.S. dollars. The U.S. economy is far more competitive than Greece’s tourism-and-tomatoes operation….
Certain parts of the United States, however, are like Greece. Just read emergency manager Kevyn Orr’s134-page report on Detroit, which has $20 billion in unpayable debt.
Couched in the workmanlike prose of a bankruptcy lawyer — which is what Orr is — the document nevertheless tells a harrowing story of institutional rot and social collapse, brought on by decades of government of, by and for special-interest groups.
Detroit’s struggle with bankruptcy might find some relief, or at least distraction, by presenting its desperate economic and social conditions as a tourist attraction. “Visit Detroit,” today’s advertisement might begin, “see your region’s future here and now: the streets, neighborhoods, abandoned buildings, and the desolation. Scary, yes, but more gripping than any imaginary ghost story.”
Wolff continues, describing the history of capitalism and its pathological cycle:
Capitalism and its driving profit motive first developed in England before spreading to western Europe, north America and then Japan. Over the last two centuries, those areas endured a growing capitalism’s mix of horrific working conditions, urban slums, environmental degradation, and cyclical instability. Capitalism also brought economic growth, wealth for a minority, labor unions and other workers’ organizations. Writers like Dickens, Zola, Steinbeck, and Gorky saw that capitalism’s workings clearly, while those like Marx, Mill and Bakunin understood it critically.
Workers’ struggles eventually forced capitalists to pay rising wages, enabling higher living standards for large sections of the working classes (so-called “middle classes”). Capitalists and their economist spokespersons later rewrote that history to suggest instead that rising wages were blessings intrinsic to the capitalist system.Capitalism and its driving profit motive first developed in England before spreading to western Europe, north America and then Japan. Over the last two centuries, those areas endured a growing capitalism’s mix of horrific working conditions, urban slums, environmental degradation, and cyclical instability. Capitalism also brought economic growth, wealth for a minority, labor unions and other workers’ organizations. Writers like Dickens, Zola, Steinbeck, and Gorky saw that capitalism’s workings clearly, while those like Marx, Mill and Bakunin understood it critically.
Workers’ struggles eventually forced capitalists to pay rising wages, enabling higher living standards for large sections of the working classes (so-called “middle classes”). Capitalists and their economist spokespersons later rewrote that history to suggest instead that rising wages were blessings intrinsic to the capitalist system.
Wolff asks, in short, if capitalism has a sustainable future:
Competition requires capitalists to raise wages instead in the newer, growing centers, where new sections of better-paid workers arise.
Will capitalism in its old centers of North America, Europe and Japan be able to hold the grudging support of their working classes, as it now delivers long-term declines of wages, working conditions, and living standards? Can capitalism achieve the social acceptance in the new centers that its first 200 years found in the old centers?
Finally, an editorial in the Wall Street Journal, “Part-time America,” analyzes the employment numbers and wonders if “Obamacare” might be the culprit behind high part-time hiring, but lower than desired full-time hiring.
The U.S. labor market may be gaining a little more steam, judging by Friday’s June jobs report. Imagine how much better it might do if ObamaCare weren’t encouraging employers to hire so many part-time workers.