The focus for President Obama is still "Anglo-Saxon" capitalism (i.e. the US, Brits, northern Europe). On the surface he calls for a green economy, health care reform, infrastructure rebuilding, etc. None of these really make for a viable economy and, his ace in the hole, it seems to me, is to go back to what worked before—the old Greenspan Multiple Bubbles program: i.e. low interest rates, easy credit, debt, leverage and the so-called wonders of the unregulated free market.
But going back to our old ways and you have Finances dominating the economy--Wall Streeters flipping paper and making a huge buck that way. They lied, cheated, gambled and untimely lost big time.
And then there's the hope of 21st century technologists. But what they have given us , compared to say, electricity, engines, oil of the early 20th century? Sure, mathematical geniuses at MIT and the University of Chicago recently figured out securitizing subprime mortgages would spread risk and would never fail. These Nobel geniuses were wrong!
Capitalism has finally developed its own economic weapons of mass destruction: cdo's, quants, credit default swaps, securitization, mega-million dollar salaries. Combine this with the usual greed, fraud and avarice and you have a killer system. Except it will kill itself.
Is there a way out of the Wall Street-Geithner-Obama nexus? Finances replaced Manufacturing as the largest part of GDP (21% vs. 12%), our best and brightest minds make more money flipping papers on Wall Street than they do making planes in Seattle or cars in Detroit and the downward spiral continues--you cannot maintain a world class empire on computer clicks and paper flipping. Once you have finances dominating the economy, the country becomes slack with the easy ways of easy money. In this we're following the path of other empires that went down the tubes with finances--Spain, the Dutch and the Brits. They all survived the fall as second-tier powers. That's probably in the cards for us. Summers and Geithner may know people in powerful places but they can never bring back what made this country supreme: manufacturing.
Is there a way out? Possibly. Energy wars have been and will be our undoing. That and our continuing policy of salvaging banks that are too corrupt to exist. Three simple ideas: cut our energy use in half, cut our military in half (we already have a nuclear submarine fleet that is armed with enough nuclear weapons to destroy the world many times over AND these subs are impervious to a first strike)and let the BIG BANKS go down the tubes.
