Reply #6: Ideology - Economics

[alvarezadams]

The US' and the DNC's greatest economic success took place during FDR's presidency and its aftermath.

Previous to FDR the economic philosophy of the US was little different from today's "trickle down" neoliberalism: a minimum of government intervention, very low taxation, almost no regulation. The result of such economic policies was an erratic cycle of booms and busts, leading to the biggest bust of all... the Depression.

FDR applied Keynesian economic theories to take the US out of the doldrums - the recovery was well under way when WWII began and finished the job.

What did Keynesian economics bring? After WWII it was the consumer society and the buildup of a prosperous middle class. Economic cycles certainly continued but with smaller and softer shifts between peaks and valleys. For the first time in history economic growth and development were not generated solely by big capital but by a combination of consumption and the collective capital accumulated by the middle class.

It isn't coincidence that the influence of Mt. Pellerin neoliberal economists in government coincided with the first decline of the middle class since the Depression. Nixon began the move away from Keynes and at some point (I have been unable to ascertain when), even the DNC embraced neoliberal economics with nary a public debate. Every president since Nixon has, to a greater or lesser degree, contributed toward the prevalence of what I consider an atrocious economic philosophy that has only resulted in greater profits for the wealthy and corporations -- and a decline for everyone else.

Yet virtually every president ultimately falls back on Keynes when the times get rough, at least as far as the idea of "pump priming" the economy through government spending. Even Reagan had to use such "tired Keynesian policies" as priming the pump in order to get out of the funk neoliberal economic policies created - albeit through military spending as opposed to spending that would benefit citizens.

I firmly believe that the role of government is, as the DoI mentions, the "common weal". Thus a government's economic policies must be guided to wards a paramount goal - the prosperity of all its citizens. Plainly neoliberal economics does not have this goal in mind.

So I'll start what I hope will be a debate by posting my ideas for a progressive economic ideology:

1. Taxation MUST be progressive, with the weight of taxation falling heaviest on those who most benefit from society, its laws and the infrastructure that made the wealth for the wealthy. Taxation must weigh the least on the heads of those with less to spend. The tax code must be simplified and the numerous loopholes used by capital to remain under-taxed must be closed.

2. Government must spend in times of economic regression or stagnation and save in times of economic growth - in order to soften the impact of the economic cycle. Such spending should be constructive, labor-intensive and tending to wards improvements in infrastructure, etc.

3. All extremes are almost, by definition, wrong. Laissez faire capitalism is every bit as bad as communism. Thus I support a mixed system of capitalism with some socialist policies. Government intervention in the economy should tend to support capitalism where it is successful and reign in the negative tendencies of capitalism. The litmus test for success and failure must by needs be in accordance with my preamble, the "common weal".

Government intervention should be through regulation and, in extreme cases, nationalization. The latter may be appropriate in such core industries where competition is not viable and that directly affect the basic necessities of the citizens - water, energy, some aspects of transport.

With regards to labor, the entire labor movement has declined after decades of conservative attacks....

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This might be enough to get the ball rolling. Ideas? Criticisms? Debate?