There may be a backlash against markets at the moment," acknowledged Kevin A. Hassett, economic studies director at the American Enterprise Institute in Washington and an advisor to presumed Republican presidential nominee John McCain. "But the backlash doesn't seem to be informed by any alternative view of how the world works."Doublespeak or triplespeak? "Informed by," is a phrase that always makes us chuckle. And just what "alternative view" of how the "world works" does this AEI clown expect? As far as we know here, the world rotates on an axis tilted 23° from the plane of the ecliptic, while revolving around the sun in an elliptical orbit. Not to mention lunar effects on our little cosmic golfball. Maybe Mr. McCain Advisor is suggesting that there's no way other than the glories of the free market for the house of financial cards to work to the advantage of AEI's funders, but we challenge him to show us any place on the face of this soon to be hotter globe where the unfettered forces of entrepreneurial, "risk-taking" greed have functioned well. Besides the amazing success stories of Russia & China, of course. People in the middle of the road are reminded that their chances of being run over are doubled by standing in the middle of the road.
"Nobody in this country really believes in unfettered free markets, and nobody really believes in socialism," said UC Davis historian Eric Rauchway, but economic crises of the past have produced constituencies favoring the reining in of markets and regulation of the economy -- constituencies that ultimately grew large enough to produce change.Yes, we mean you, Historian Rauchway. Get to one shoulder or the other.
Americans entered the new century convinced that "we had a new economy built on services and information technology that would let us win globally," said Harvard economist Robert Z. Lawrence." The whole premise of globalization in the year 2000 was that it worked well for us and the other developed countries but that the developing countries would need help," Lawrence said. Today, virtually all those optimistic assumptions have been turned on their heads. "We've seen unprecedented growth in the developing countries, while the developed countries are being led into a slowdown by the United States," Lawrence said. "We've found out that instead of services and information technology, it's all about oil and other commodities" that are not the nation's strong suit.Services & infotech. Waiting tables (soon to be outsourced to robots controlled by night-shift workers in Bukina Faso) & crummy movies & crappy music for 'tweens, that are free to all once the first peer-to-peer sharer buys one copy & puts it up on the web. Why have we paid any attention to any of the experts?
An investor who put a dollar in a broad market index fund early in this decade not only would have made no money by today but would have lost a little of his initial amount. That's a far cry from the 1990s, when people told pollsters that they expected to make 15% annual gains indefinitely.Golly, it's just too damn bad we couldn't get all the Social Security money in the markets sooner, isn't it? H. Ross Perot's "giant sucking sound" is more of a swirling sound, as our excessive way of life flushes down the toilet.