How to Bring Back American Prosperity

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Self-regulation has never worked in world history...so it will certainly work "this" time. How did self-regulation work on wall street with the fraud committed by the financial sector and ratings agency's and those stellar AAA rated securities? . there is no such thing as free markets in reality. Outside of the US, you don't even hear those words, they are only uttered by ideologues dreaming to return to a world that never was in reality.
Clinton had federal spending down to 20% of GDP then GWB ran it up and then there was the recession. Reducing corporate taxes does nothing to increase real wage growth. US large firms are paying 2% of US GDP one of the lowest in the OECD.
Long ago there were not many regulations, it was tried before didn't work. In the US people and especially US large firms covered by limited liability only do what is required of them by law, no more and no less. Supreme court decisions in the 1800's decided that corporations are people and that lobbying was protected by the constitution. anybody that knows anything about language knows that words are open to interpretation and the meanings change with time and from place to place. lobbying to the degree that it is allowed in the US has perverted capitalism and democracy. The lobbyists and those on the hill in DC all earn on average 4x the current median income plus benefits. The markets have been manipulated for over 100 years. And "free trade" agreements have liberalized labor in specific sectors of the US economy while others remain under government protection.
30 years of neo-liberal economic policy has greatly empowered capital over labor when it needed no such help. capital has the natural advantage over labor and now labor in the US has no power at all, with US workers being the least protected in the OECD.
Since the 80's taxes on capital, corporate profits and income are at all 40 year lows yet the median unemployment rate has steadily increased since the late 70's. US GDP has tripled in the past 30 years yet the median wage once adjusted for inflation has the same purchasing power as the median wage in 1990. The US low-wage service sector is paying $8-$14, which are poverty wages. With babyboomers retiring and accounting for nearly 30% of the current US workforce US GDP will drop, college educated new workers are too heavily ladden with debt to consume beyond the necessities. Debt based consumption by the working has been fueling the US financial sector since the 80's.
And don't talk of Progressives expanding the government. Government and debt grows the most when Republicans are in the white house and the economic policy from the top down has nothing except negative effects on the economy by further increasing inequality of income and wealth.

supertech86 of PA 4:06AM August 05, 2012

The truth about our economy failure is definitely related to the regulations imposed by the Federal Government, the lowering of pay to provide more profit for companies, the school system for not adequately training students in the work required by today's advancements, the horrible greed, and self-enrichment of our politicians, and large companies, the lack of support for trade unions to allow them to get a portion of all of their companies profits (within reason of course), the lack of our voice in the labor market, and the tremendous amounts of money spent on welfare. Unfortunately, this same trend is occuring in every developed country, Germany, the standard for growth achievement for a decade, now has the same problem, and France is starting to see the same problem, and if Hollande is elected in France, those problems will multiply. I read an interesting article on the Spiegel International web pages, about what the IMF has told Germany what they need to do to correct the situation, which seems like the most sensible thing I have read about How to return economic growth for Germany, and what they suggest, does apply directly to thew U.S. as well as Germany. Take a look at this posting on spiegal International, and see if you do not agree.
http://www.spiegel.de/international/business/0,1518,830972,00.html

Robert of TX 12:16PM May 05, 2012

Well put. I wish all Americans really understood their history and what made them great. Companies who are at the top of the heap because they do something better than any other company do not try to be like other failing companies throwing away the key to their success. This is what we are doing today. Destroying the most generous, prosperous, technologically advanced country that there has ever been so that people can get free birth control and government cheese.

Becky of NC 11:28AM April 18, 2012

This is a wonderful article, well-written, succinct, and clear. Thank you!

John Switzer of MS 9:17AM April 10, 2012

An excellent summary of how this country has gotten off the track. The solution is clearly simple, trust free markets and the limitless resource of the human mind to solve all needs.

Kent Misegades of NC 3:23PM April 09, 2012

Gee.... This Blog Sounds Familiar... I wrote of this 3 years ago.
However Mr. Luddy, I feel we are both bound for disappointment.
The economic collapse of America and the middle class was a long process. The acute phase took place in the last year of the Bush Administration and will continue until a stable, but lower, standard of living has become the norm. The end result, two tier society - a subsistence class and the wealthy - separated only by a narrow, middle class strata.
The reasons for the this change in our economic default setting should be obvious to anyone with an open mind.
1. Business and industry is tied down by thousands of Lilliputian strings of government regulation and fees. California is a good example - employers continue to flee the Eco-Socialist state. But they can't "flee" from the Fed's regulatory behemoth.
2. Corporate greed and rewarding failure in the private sector. The rich getting richer and most of the middle class being forced downward - with only a few managing to scramble up the ladder. "Minimum Wage" is the new standard.
3. Outsourcing and downsizing driven by "profit margins", automation and a hostile business environment.
4 Unrealistic expectations. Speculative bubbles and the credit frenzy they promoted was the acute factor that led to the crisis.
5. The progressive notion that we no longer need manufacturing jobs and heavy industry. Only the "clean and green" are acceptable. Global Warming hysteria and big "E", "Environmentalism" has created a perfect, prodding handmaiden for Progressive dogma - or perhaps it's the other way around. Either way, the outcome is the same.
6. Millions of illegal aliens who are a costly burden to society and tend to vote for those who promise rewards of one kind or another. This will become a real problem as they gain majority status in the Southwest.
7. Environmentalist theology hamstringing energy production and raising the cost of energy to private consumers and businesses - offering only the chimera of subsidized "Green Jobs" in return. Business can not compete when energy costs are high and consumers can't spend when their disposable, discretionary income is spent for ever increasing energy costs.
8. Selfish and unrealistic demands by unions and their members, and the subsequent burden of legacy costs.
9. Executives who put short term profits above long term economic stability in their quest for larger bonuses.
10. Schools belittle labor as an unfulfilling or dead end vocation in our "new economy". "No nation can prosper unless it realizes that there is as much honor in tilling a field as in writing a poem."
11. Government's failure to recognize that extreme deficit spending is not healthy for our economic future.
12. The rising juggernaut of China. It's really hard to compete with a country with no regulation, cheap energy, virtual slave labor and an urge to control the world.
Sadly, we lack the personal will and national resolve to do what must be done.