BANKING IS NOT THE CREATOR OF PROSPERITY BUT THE CREATION OF IT
BANKING IS NOT THE CREATOR OF PROSPERITY BUT THE CREATION OF IT
By Kevin A. Stoda, in Kuwait
In 1904, ten years before the era in which the British domination of the world’s financial sector began to end (i.e. in the wake of WWI and WWII), the former colonial secretary of Great Britain, Joseph Chamberlain spoke to British Bankers, “Granted that you are the clearing house of the world, ‘but’ are you entirely beyond anxiety as to the permanence of your great prosperity? . . . Banking is not the creator of our prosperity but the creation of wealth; and if the industrial energy and development which has been going on for so many years in this country were to be hindered or relaxed, then finance and all that finance means, will follow trade to the countries which are more successful than ourselves.”
As both regionally, first Dubai and now Kuwait seek to become new financial capitals over the coming two decades, it is now time to reckon what it means to put one's future development primarily into the hands of the financial and debt sectors.
In his chapter on “Debt” in the non-fiction work AMERICAN THEOCRACY(2006), Kevin Phillips cited Joseph Chamberlain’s speech to bankers in Britain of 1904, i.e. in a land--similar to the U.S.A. in 2001--which had gernerally determined that investing in homeland productivity had less and less value. In short, over a hundred years ago this decade, British financiers, lenders, and bankers had determined that chasing global investment and investments in financial gimmicks were easier money than promoting productivity in the United Kingdom.
Phillips notes, “But while this [perspective of Joseph Chamberlain] was one of the most accurate predictions in British commercial history, it did not carry the day.”
Such was the case over the past two decades as critiques from all over the political spectrum in the U.S.--from Kevin Phillips to Paul Krugman to Nome Chomsky--warned America about its decision to hollow out its commitments to the poorest echelons of the society while focusing on the financial post-industrial development of the USA. The United Kingdom, Iceland, Hong Kong and other countries have mimicked the USA model of the past decades.
Kevin Phillips, in AMERICAN THEOCRACY, gives the examples of more balanced economies (than Britain and the United States) to make clear how the myths concerning the positive facets of post-industrialism should have been called into question by both the USA and the UK leaders over the past two decades. The three countries that Phillips lifted up as alternative models to the under-exploited industrial and productive capacities of the USA and its Atlantic counter-part are: Japan, Switzerland and Germany.
JAPAN, SWITZERLAND, GERMANY
Phillips begins his attack on the U.S. model (mimicked from Spain in the 15th and 16th Century, Holland of the 17th and Britain of the 19th Century) by warning American readers, “Postindustrialism, then, may be more a quest for genteel retirement than a real economics-based future for a major power.”
That is, if you want to retire as a superpower, you might try the financial emphasis.
Nontheless, as the U.S. federal reserve has already given 850 billion dollars in "cash for trash" in 2008 without reducing poor people's debt and housing losses AT ALL.
Furthermore, Phillips argues, “All three nations have wages or overall production costs higher than those in the United States. All have reasonably successful financial sectors and postindustrial accomplishments (tourism, ecological awareness, and renewable-energy emphases—wind in Germany, solar power in Japan). However, they balance these with highly developed manufacturing industries. For Germany, machinery, vehicles, chemicals, and metal products are the great exports; for Switzerland, chemicals, metal products, machinery, and mechanical-engineering products (especially clocks and watches); and for Japan, vehicles, electronics, and computers. Each nation’s products command global respect for quality.”
This, of course, does not mean that the U.S. doesn’t have quality production. It has wonderful production out of Silicon Valley and other IT firms—as well as high tech weaponry. It also has some medical technologies--which many poorer Americans can't afford--to export. It also currently has some nascent alternative energy research and techniqes to offer.
However, the U.S. is not competitive in super fast passenger train technology as are the Japanese and Germany. (China now through its purchase of such high level transport technology has gained greater command in this field than the U.S. offers.) Nor is it very competitive in the car market or any number of areas of which it had dominance over the 1940 to 1970 period.
As usual Phillips, backs up with a lot of statistics and research what he has been warning conservative, neo-con, and neo-liberal America about since the 1980s in his non-fiction books like, WEALTH AND DEMOCRACY.
Phillips notes, “Indeed, German, Japanese, and Swiss export prowess puts the once-mighty United States to shame. In 2003 and 2004 the U.S. trade deficit in manufactured goods rose from $470billion to $552 billion. The three better-balanced economies, by contrast, enjoyed huge surpluses in trade in manufactured goods and large ones in their overall current accounts. A set of statistics will demonstrate the point. Estimates for 2004 provided by the CIA in mid-2005 put Germany first in the world with $893 billion in exports (mostly manufactured goods)—this from a national population of 82 million. The united states places second with exports were dwarfed by $1.3 trillion worth of imports. The Japanese, chalking up the world’s third-highest export total, $538 billion, did so with a national population of 127 million. Pocket-sized Switzerland was even more of a per capita powerhouse: with a national population of only 7.5 million $131 billion worth of goods in 2004.”
Most Republicans and Reagan Democrats over the past 28 years have failed to read Kevin Phillips, even though Phillips is the Republican architect of most of the Post-1960 rebirth of the Republican party in the USA.
NEEDING TO END THE HEAD IN THE SAND ON BAD ECONOMICS
I recall this head-in-the-sand approach to Phillips at Texas A& M in graduate school history seminar. In review of Phillip’s writings, I observed one Reagan-Republican classmate (a doctoral candidate) stand up and say that Phillips, in his WEALTH AND DEMOCRACY and THE POLITICS OF RICH AND POOR, was simply using his own liberal and uninformed statistics to make his case. In short, he was poo-pooing facts and well researched documents on the hollowing out of the Middle Class in the USA in the 1980s and 1990s.
This particular doctoral student was simply going through college life assuming that everything is an argument and nothing matters but point of view—i.e. not statistics or facts on the ground. This politicization of logic in the US academia mirrored what was happening in the herd mentality in U.S. politics and political economics since the 1960s.
Americans have got to get their feet on the ground and stop believing facts are always political.
Both the U.S. and the UK were full of information and in-the-know-critiques, such as economist Paul Krugman, who have made clear over the past two decades that the overemphasis on financial sector was no-go in the long run. Moreover, the hollowing out of the social commitment of the state to the non-retired American citizen was also fodder for critique and alarm by Phillips, Krugman and others dating back to 1980 when John Anderson walked out of the Republican Party and ran against Ronald Reagan and voodoo economics.
Meanwhile, the Republican takeover reigned over by William (Bill) Clinton in the 1990s only continued the hallowing out of the U.S. social and mass transport infrastructure at a national level.
POST-INDUSTRIALISM--A DEAD END?
As many Americans, have been noting, i.e. as more and more jobs, companies and investments leave the USA over the NAFTA era, post-industrialism can be a dead-end to certain facets of many of America’s (and Mexico’s) local economies. We can't allow the old-mentality that OUR COUNTRY CAN'T AFFORD TO HELP THE POOR AND THE HURTING.
If we can help out wealthy and hurting bankers and financiars--and other schoundrals to the tune of nearly a trillion dollars in 2008 alone--we have to get it clear that we could have done better in the social contracts of the past 3 decades than to end up bailing out bad debtors. We could have competed with Switzerland, Germany, and Japan on providing high wages and high quality of life to our citizens.
Meanwhile, the bailouts of Wall Streets in banks are going to be over one-trillion dollars in 2008 and 2009. So, Americans need to collar the government leaders in these November 2008 elections. We must notify them of change.
I suggest one way of doing this is to vote for third party progressive candidates (and any other real progressives who are lucky to be on the big tent party tickets) who are willing to help out homeowners and debtors.
We also need to return to a progressive tax system to pay off the big 30-year party on Wall Street and in the Financial Industry in the USA and around the globe.
Please comment below what other progressive political economic change is needed as of 2009 below in the comment section. (For example, health care for all!!)
NOTES
AMERICAN THEOCRACY, http://www.americantheocracy.net/
By Kevin A. Stoda, in Kuwait
In 1904, ten years before the era in which the British domination of the world’s financial sector began to end (i.e. in the wake of WWI and WWII), the former colonial secretary of Great Britain, Joseph Chamberlain spoke to British Bankers, “Granted that you are the clearing house of the world, ‘but’ are you entirely beyond anxiety as to the permanence of your great prosperity? . . . Banking is not the creator of our prosperity but the creation of wealth; and if the industrial energy and development which has been going on for so many years in this country were to be hindered or relaxed, then finance and all that finance means, will follow trade to the countries which are more successful than ourselves.”
As both regionally, first Dubai and now Kuwait seek to become new financial capitals over the coming two decades, it is now time to reckon what it means to put one's future development primarily into the hands of the financial and debt sectors.
In his chapter on “Debt” in the non-fiction work AMERICAN THEOCRACY(2006), Kevin Phillips cited Joseph Chamberlain’s speech to bankers in Britain of 1904, i.e. in a land--similar to the U.S.A. in 2001--which had gernerally determined that investing in homeland productivity had less and less value. In short, over a hundred years ago this decade, British financiers, lenders, and bankers had determined that chasing global investment and investments in financial gimmicks were easier money than promoting productivity in the United Kingdom.
Phillips notes, “But while this [perspective of Joseph Chamberlain] was one of the most accurate predictions in British commercial history, it did not carry the day.”
Such was the case over the past two decades as critiques from all over the political spectrum in the U.S.--from Kevin Phillips to Paul Krugman to Nome Chomsky--warned America about its decision to hollow out its commitments to the poorest echelons of the society while focusing on the financial post-industrial development of the USA. The United Kingdom, Iceland, Hong Kong and other countries have mimicked the USA model of the past decades.
Kevin Phillips, in AMERICAN THEOCRACY, gives the examples of more balanced economies (than Britain and the United States) to make clear how the myths concerning the positive facets of post-industrialism should have been called into question by both the USA and the UK leaders over the past two decades. The three countries that Phillips lifted up as alternative models to the under-exploited industrial and productive capacities of the USA and its Atlantic counter-part are: Japan, Switzerland and Germany.
JAPAN, SWITZERLAND, GERMANY
Phillips begins his attack on the U.S. model (mimicked from Spain in the 15th and 16th Century, Holland of the 17th and Britain of the 19th Century) by warning American readers, “Postindustrialism, then, may be more a quest for genteel retirement than a real economics-based future for a major power.”
That is, if you want to retire as a superpower, you might try the financial emphasis.
Nontheless, as the U.S. federal reserve has already given 850 billion dollars in "cash for trash" in 2008 without reducing poor people's debt and housing losses AT ALL.
Furthermore, Phillips argues, “All three nations have wages or overall production costs higher than those in the United States. All have reasonably successful financial sectors and postindustrial accomplishments (tourism, ecological awareness, and renewable-energy emphases—wind in Germany, solar power in Japan). However, they balance these with highly developed manufacturing industries. For Germany, machinery, vehicles, chemicals, and metal products are the great exports; for Switzerland, chemicals, metal products, machinery, and mechanical-engineering products (especially clocks and watches); and for Japan, vehicles, electronics, and computers. Each nation’s products command global respect for quality.”
This, of course, does not mean that the U.S. doesn’t have quality production. It has wonderful production out of Silicon Valley and other IT firms—as well as high tech weaponry. It also has some medical technologies--which many poorer Americans can't afford--to export. It also currently has some nascent alternative energy research and techniqes to offer.
However, the U.S. is not competitive in super fast passenger train technology as are the Japanese and Germany. (China now through its purchase of such high level transport technology has gained greater command in this field than the U.S. offers.) Nor is it very competitive in the car market or any number of areas of which it had dominance over the 1940 to 1970 period.
As usual Phillips, backs up with a lot of statistics and research what he has been warning conservative, neo-con, and neo-liberal America about since the 1980s in his non-fiction books like, WEALTH AND DEMOCRACY.
Phillips notes, “Indeed, German, Japanese, and Swiss export prowess puts the once-mighty United States to shame. In 2003 and 2004 the U.S. trade deficit in manufactured goods rose from $470billion to $552 billion. The three better-balanced economies, by contrast, enjoyed huge surpluses in trade in manufactured goods and large ones in their overall current accounts. A set of statistics will demonstrate the point. Estimates for 2004 provided by the CIA in mid-2005 put Germany first in the world with $893 billion in exports (mostly manufactured goods)—this from a national population of 82 million. The united states places second with exports were dwarfed by $1.3 trillion worth of imports. The Japanese, chalking up the world’s third-highest export total, $538 billion, did so with a national population of 127 million. Pocket-sized Switzerland was even more of a per capita powerhouse: with a national population of only 7.5 million $131 billion worth of goods in 2004.”
Most Republicans and Reagan Democrats over the past 28 years have failed to read Kevin Phillips, even though Phillips is the Republican architect of most of the Post-1960 rebirth of the Republican party in the USA.
NEEDING TO END THE HEAD IN THE SAND ON BAD ECONOMICS
I recall this head-in-the-sand approach to Phillips at Texas A& M in graduate school history seminar. In review of Phillip’s writings, I observed one Reagan-Republican classmate (a doctoral candidate) stand up and say that Phillips, in his WEALTH AND DEMOCRACY and THE POLITICS OF RICH AND POOR, was simply using his own liberal and uninformed statistics to make his case. In short, he was poo-pooing facts and well researched documents on the hollowing out of the Middle Class in the USA in the 1980s and 1990s.
This particular doctoral student was simply going through college life assuming that everything is an argument and nothing matters but point of view—i.e. not statistics or facts on the ground. This politicization of logic in the US academia mirrored what was happening in the herd mentality in U.S. politics and political economics since the 1960s.
Americans have got to get their feet on the ground and stop believing facts are always political.
Both the U.S. and the UK were full of information and in-the-know-critiques, such as economist Paul Krugman, who have made clear over the past two decades that the overemphasis on financial sector was no-go in the long run. Moreover, the hollowing out of the social commitment of the state to the non-retired American citizen was also fodder for critique and alarm by Phillips, Krugman and others dating back to 1980 when John Anderson walked out of the Republican Party and ran against Ronald Reagan and voodoo economics.
Meanwhile, the Republican takeover reigned over by William (Bill) Clinton in the 1990s only continued the hallowing out of the U.S. social and mass transport infrastructure at a national level.
POST-INDUSTRIALISM--A DEAD END?
As many Americans, have been noting, i.e. as more and more jobs, companies and investments leave the USA over the NAFTA era, post-industrialism can be a dead-end to certain facets of many of America’s (and Mexico’s) local economies. We can't allow the old-mentality that OUR COUNTRY CAN'T AFFORD TO HELP THE POOR AND THE HURTING.
If we can help out wealthy and hurting bankers and financiars--and other schoundrals to the tune of nearly a trillion dollars in 2008 alone--we have to get it clear that we could have done better in the social contracts of the past 3 decades than to end up bailing out bad debtors. We could have competed with Switzerland, Germany, and Japan on providing high wages and high quality of life to our citizens.
Meanwhile, the bailouts of Wall Streets in banks are going to be over one-trillion dollars in 2008 and 2009. So, Americans need to collar the government leaders in these November 2008 elections. We must notify them of change.
I suggest one way of doing this is to vote for third party progressive candidates (and any other real progressives who are lucky to be on the big tent party tickets) who are willing to help out homeowners and debtors.
We also need to return to a progressive tax system to pay off the big 30-year party on Wall Street and in the Financial Industry in the USA and around the globe.
Please comment below what other progressive political economic change is needed as of 2009 below in the comment section. (For example, health care for all!!)
NOTES
AMERICAN THEOCRACY, http://www.americantheocracy.net/
posted by Kevin Anthony Stoda at 11:21 AM
1 Comments:
Hi Kevin, interesting article.
I just found your blog... we both worked as JETs in Niigata about 15 years ago, remember? I came to visit you once, and we got together again later in Bangkok and did a really fun boat tour of the canals early one morning. Shoot me an email if you'd like to catch-up, It's ben@samuelsdesign.com
:-)
-Ben Samuels
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