My great friend and fellow sociologist Douglas H. Pressman sent me the best summary I’ve seen of what’s happening these days. With his permission, here is his analysis:
I have been searching in vain for a comprehensive assessment of how we got into this mess, so I have had to assemble one myself.
My own analysis of our predicament is per follows. In short, we are reaping the whirlwind that was sowed over a 25-year period, extensively involving the dismantling, under neo-liberal pressure, of reforms established via the Progressive Movement, the New Deal, and the Great Society:
1) Excessive concentration of wealth, thanks to not paying producers (workers) enough to clear their own production from store shelves, etc.
1b) The robbing of producers of much of their work-product via extensively non-productive, astronomical military expenditures, a massive prison-industrial complex, and outright theft of public tax money, with resultant chronic price-inflationary effects on the civilian economy.
2) Simultaneously, the attempt to concentrate even more money wealth at the top by destroying (the Czech word is nice: ‘tunneling’) productive companies via takeovers, downsizing, outsourcing, or effectively predating on the capital of smaller firms [e.g., WalMart’s business model, the corporate takeover of agriculture, aggressive promotion of GMO seeds], etc.
2b) Simultaneously, the attempt to concentrate even more money wealth at the top by decoupling, via trade agreements etc., of investor interests from US national interests (‘globalization’).
2c) Simultaneously, the attempt to concentrate even more money wealth at the top by shifting tax burdens onto the poor and reducing expenditures on public goods (roads, railroads, schools, etc.).
3) Thanks to 1 and 2, a restriction on avenues for domestic investment that yield real wealth, e.g., factories.
4) Thanks to 1 and 2, the substitution of consumer debt for real wages, via aggressive expansion of credit card usage, car loans, etc.
5) Thanks to 1, 2 and 3, the attempt to make additional money on the increasingly-concentrated money wealth via ‘investments’ aimed at producing dependable rents for the owners of concentrated wealth, resulting in a massive secular misallocation of resources into housing, offices, shopping malls, and financial service businesses.
6) The impossibility of the real economy, premised on 1 and 2, ever being able to afford those geometrically-expanding rents, and accompanying disconnect between the accounting economy and real wealth (e.g.,’bubbles’).
7) In reaction to 6, the scramble to produce money wealth via computerized accounting games, ‘derivatives’, outright fraud (Enron), etc.
8] An inbred, amoral and utterly corrupt ruling class, assisted by similarly degenerate auxiliary institutions: legislatures, judiciary, neo-liberal think-tanks, political parties, universities, press, Wall Street, military-industrial complex, Hollywood entertainment complex, fundamentalist religious-media complex.
9) A global empire cemented together and kept loosely intact by an endless stream of payoffs and bribes of foreign leaders and legislators.
10) The longest wars in US history, bleeding the savings of the developed world white, for an historic gamble by 8: attempting, with borrowed money, to consolidate a global empire based on military-enforced monopolization of core petroleum sources before the house of cards described in 1 to 9 collapses into permanent recession.
11) Thanks to the recklessness and corruptness of 8 in pursuing 10, while heavily relying on the strategy in 9, the loss of their historic gamble.
12) In view of 10, and increasing recognition of 11, plus initial signs of system breakdown thanks to the disappearance of buying power that had been unleashed previously by beneficiaries of a (now-fizzling) real estate boom, attempts by 8 to patch over the disconnect between the real economy and the accounting economy, via desperate implementation of 7-style measure by central banks.