Hump-day topics and Reading List

First, I’ll start with a must read macro-perspective from the inestimable Noam Chomsky:

The United States effectively has a one-party system, the business party, with two factions, Republicans and Democrats. There are differences between them. In his study Unequal Democracy: The Political Economy of the New Gilded Age, Larry Bartels shows that during the past six decades “real incomes of middle-class families have grown twice as fast under Democrats as they have under Republicans, while the real incomes of working-poor families have grown six times as fast under Democrats as they have under Republicans”.

Differences can be detected in the current election as well. Voters should consider them, but without illusions about the political parties, and with the recognition that consistently over the centuries, progressive legislation and social welfare have been won by popular struggles, not gifts from above.

I’m following that up with a succinct plea for culpability on the part of Paulson and the banksters that are set to benefit form public liquidity injections, from Jesse’s Cafe Americain:

The current plan is to flood a few relatively large banks with public liquidity, without substantially changing their management, their charters, and their regulatory constraints. What if these banks defer on lending to others as their primary objective, preferring instead to buy up valuable assets on the cheap for their own speculative purposes?

I think these two perspectives help set the stage for this story on the European initiatives to stem the crisis and to address the larger issue of how to reform the international financial markets. Britain’s Brown and France’s Sarkozy appear to be stepping up to the plate while the US remains paralyzed. Hopefully the US will join in solidarity after the elections, to work towards real monitary reform, which is at the root of the crisis, along with imposing stricter regulation on bank enterprises that threaten global trade. That Prime Minister Brown has already previously called for a ‘new Bretton Woods’, suggests that the European Union is far less reluctant to retake the reigns from the banking titans than their counterparts in the US establishment.

As we overcome the inertia of big banking’s grip on our policies, my thoughts on this disaster and the way forward have been increasingly focused on the role of modern economic policy in shaping our environmental policy. Specifically, the climate crisis and the economic crisis are in many ways one and the same. The ‘engines’ of the economy are literally driving the climate crisis. That is why I was so very disturbed to read these comments from the Telegraph that some EU governments are already talking about backing off their goals for reducing carbon emissions for fear that it will slow economic growth! We have a chance now to realize that growth at all costs is not the model for a sustainable future. Some very significant ground work in economic theory on steady-state capitalist economies is already in place. Granted, as the economy melts down we may find ourselves forced into lifestyles that produce net carbon reductions, but the chance to create an interdisciplinary authority (with a lower case ‘a’!) to rethink the world’s financial systems around the finite nature of resources and the intangible values of healthy humans and healthy ecosystems is here. Let’s run with it.