Dean Baker has a nice snippet at 'Beat the Press' about 'Wall Street Welfare Queens' - you get 'em Dean!
Alas, the subject of this post pertains to the current book that I am reading, Dark Ages America. I've read a few other texts by the author before(good ones) and I possess a sense of loyalty to authors that I like. Initially, I was not all that keen on reading Dark Ages given that I am already pessimistic enough about the fate of America, but I do have a hunch that the window is open enough that things can be turned around with the right people conducting the orchestra. Also, one review of Morris Berman's latest book proclaimed that Jimmy Carter is the hero of it, and that kind of put me off - I never could abide Carter much(though Jimma' deserves two thumbs-up for his dedication to Habitat for Humanity, which is also my pet charity.). I waited until the local Uni library had a copy available, and now so I read it.
Morris Berman presents the similar theme with his current one that was in his previous, Twilight of American Culture. Now, he states that the sky is not only foreboding, it is already hailing & raining on us but we do not know it fully as yet. Berman is Spenglerian without ever mentioning Spengler in Dark Ages and he states unequivocally that TINA is the reality, though Berman's TINA has a strong case of STD's - he doesn't like the whore and is not a protagonist, willing Trick for her.
The focal point of this post will be his economic comments of Berman's book, and I found some of them spot-on, though he leaves out some essentials that should had been addressed for his arguments. Namely, Berman regards the demise of Bretton Woods as the epicenter of the end of the USA's economic hegemony which is but partially true. Berman believes that Bretton Woods was the 'check' on globalist laissez-faire and he looks upon economics as a sociologist/cultural historian that he is( we need more economists with this panache). Rightfully he remarks in said text that the post- Bretton Woods era opened the door wide open for this globalist catastrophe that we are witnessing now;the floating-exchange rate of currencies is a predator-speculator's dream come true, and there have been no authentic checks on the ebb&flow of international capital as it was in the post WW2 Era because of said Bretton Woods Agreement.
Morris Berman, like other protagonists for BWA, ignores why the edifice collapsed. Instead, he merely states "...for whatever reason...". This is rather odd given that he is usually a well-endowed researcher, and one would think that if someone felt that Bretton Woods was the Thing, that they'd want to know why, and inform their reader. I covered the *WHY* in previous post, 'Nixon Shock, Revisited', and I'll not rehash it much here. A few months ago, I visited Berman's blog and posted in brief some of these factoids about the collapse of BWA, but he never responded(Berman seems to only reply to commentators who claim to be fellow educators and Ph.D's....I won't call him a snob, but question marks are there.) to it. He should had read George Greider's, Secrets of the Temple, before he wrote on the subject, but that is neither here now there.
Berman's hero of Bretton Woods is the British delegate at the conference in 1944, John Maynard Keynes. Yet, Keynes was not at all onboard on all the final accords reached there - BWA was essentially that of Harry Dexter White who was not a 'Keynesian'. True enough, Keynes does deserve accolades. One of the most major misconceptions about Keynes is that he was a socialist - far from it. He was a capitalist who wanted to put a 'human face' to it and he himself got immensely rich with sound investments in stock( it's ironic that most professional economists often loose their ass in their own personal speculations). Another Keynesian myth is that the current status qua of deficit-spending with gargantuan debt is all based on his plan - Keynes only sanctioned deficit spending as a temporary measure during severe economic downturns as remedy instead of raising taxes;Keynesian prescriptions during 'good years' called for balanced-budgets, federal restrictions on spending, national debt reduction and the necessary tax hikes to reach these ends - basic common sense. JMK met an untimely death in 1946 because Vienna School predator, Friedrich August von Hayek's magnum opus,The Road to Serfdom, was actually a declaration of war on Keynesian economics and Keynes was up to meeting the challenge. If he would had lived longer, Keynes would had undoubtedly cleaned the clocks of the minions of the Mont Pelerin Society (Wilhelm Roepke, excepted.Roepke was closer to Keynes than he was to his neoclassical colleagues in said MPS;Roepke is the genius who found the synthesis of neoliberalism &neosocialism, some say). The Vienna School would had been discredited and laissez-faire would had remained deader than fried chicken as it was by 1945 - ass-up-end into the dustbin of economic history where it belongs.
Morris Berman, a Leftist and Red Diaper Baby, waxes like a fiscal conservative in his narrative, and correctly identifies LBJ's costly Vietnam War and Great Society(yes! a lefty critic of of Johnson's spend-thrift, Guns n' Butter,pipedream to end poverty!) for the inflationary spikes that led us up to August 15, 1971. However, the author omits Kennedy's role in this morass: JFK began the policy of deficit-spending within productive economic times and he also cut taxes for the wealthy Overclass - a prelude to Reagan twenty years later. The Kennedy-Johnson Administrations were the main culprits in the Bretton Woods debacle, and all of this was thrusted into Nixon's lap.
The author sighs over Bretton Woods's collapse, but unlike other partisans of it like Ravi Batra and James Tobin, he doesn't believe that it can be re-instated. Berman also demonstrates that branches of the BWA such as the IMF and World Bank has become the antithesis, the alter ego of its original benevolence. They are now the Enemy after the laissez-fairists have taken them over and now their program is to install cosmopolitan corporate feudalism(or fascism?) all over the Blue Dot, and they're making a fine job of it.
The year Nineteen-hundred-seventy-three, being held as the epicenter of the end of America's hegemony internationally( a horrible, shitty year indeed; nothing good came out of '73.Nihil.), plus the omega of the USA's 'human-face capitalism', the Dark Ages America directly lends acquiesce to this. Nixon did try to re-set the Dollar at a fixed-rate as before, but no international consensus could be reached to restart Bretton, thus the 'floating-exchange ' rates of currencies was officially adopted, which has become a predator-speculator's nirvana. De-industrialization in the USA took off with a passion, real wages have plummeted and have not moved of any significance since 1968( to get the real wages to '68 levels, our current federal Minimum Wage law would have to be set at $8.08 per hour. Scandalous!), and inflation has literally ate us alive since them. But Berman and others must know that Bretton Woods should not have been set up as a permanent international order, and the real cause of America's economic demise was lack of protection. I can't write this enough.
Here's a harebrained idea where internationalist BWA nostalgics and tariff protectionists such as myself,perhaps all can reach an accord to turn-back the globalist monster, beat-it down and have a pseudo-cosmopolitan economic order as well: given that Bretton Woods was primarily oriented for economic recovery of Europe and to avoid pitfalls of laissez-faire, why doesn't the powers-that-be in DC say to Brussels - "hey, it's your turn." ? In this here simplified form, all participants agree that the Euro should be the reigning fixed-rate reserve currency backed by a species of gold from reserves from all said participating nations. Convertibility of Euros to gold are conditional on majority vote and with limits on the transfer of gold reserves from one nation to another. The US Dollar remains constitutionally sovereign but stabilized in this format. Tariff rates(yes) will be assessed based on the current fixed-rate of the Euro compared to the value of the Dollar. In short, this is a reverse- Bretton Woods with many of the holes of the BWA plugged. Nations will be allowed to unilaterally raise and lower their own tariff-rates to rectify their own trade imbalances or for policies that require internal improvements or their vital industries that are getting hit with inordinate foreign competition. Both the fixed-rate reserve currency and tariffs will cover one another in this sequence. As for the IMF and World Bank and WTO - to the graveyard they will go.
Maybe this plan has glaring caverns in it as well, but it is worth a try to tweak and should be satisfactory to both economic-nationalists and those who are hung-up on international stability of a consensus. Berman's declaration of an impeding dark age may be halted economically.