Is America Necessary? Conservative, Liberal, & Socialist Perspectives of United States Political Institutions

By Henry Etzkowitz; Peter Schwab | Go to book overview

16 The economic crisis
The basic questions this chapter will address are:
1. Is there an economic crisis?
2. What are its causes?
3. Who benefits and who loses from an economic crisis?
4. Is there a solution to inflation, unemployment, recession, and depression?

Conservatives believe that there is an economic crisis but that it does not involve large numbers of unemployed persons. It has to do with the availability of capital to banks, corporations, and investors--in other words, there is a crisis of liquidity caused by too much competition among banks. In competing to loan money, banks have driven down the interest rates to too low a level to gain a reasonable return. Also the increased cost of oil due to the Arab oil producing states raising their prices has created pressure on the economy.1 The crisis is both internally and externally caused by the flawed operation of our own financial institutions, and pressure on our economy from an outside world over which we have lost control.

To conservatives, unemployment is not a major problem. A certain amount is necessary to keep inflation under control, that is, to keep the dollar from decreasing in value. Their only concern is that too great a number of unemployed persons may lead to social unrest and government intervention in that sector of the economy not under their auspices and control. Conservatives think that a substantial rate of unemployment, between 6 per cent and 10 per cent, is economically useful to keep wages down and workers in line.

The conservative solution to the liquidity crisis is twofold: (1) A massive coordinated input of funds is transferred from the government into the corporate economy. This transfer of funds must be under the control of the corporations themselves. (2) The consolidation of banking under the control of a few major banks, such as the Bank of America, Chase Manhattan, Morgan Guaranty Trust Co., First National City, Chemical-New York. Consolidation would limit competition among banks and allow a stable control by a few superbanks over funds that circulate in the economy. Bank failures and the takeover of smaller banks by larger ones is an acceptable policy to conservatives.

Downturns in the economy are not necessarily viewed as a crisis by conservatives. Situated at the economic pinnacle, major corporations and banks increase their control over the economy in a depression. Their paper profits may seem to go down in the short term, but in the long run they benefit financially.2 A managed recession, during which a downturn in the economy is deliberately created, is in many ways in the interest of conservatives who control the corporate economy because it allows them to increase and consolidate their power over the American economy.

-539-

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Is America Necessary? Conservative, Liberal, & Socialist Perspectives of United States Political Institutions
Table of contents

Table of contents

  • Title Page i
  • Preface ix
  • Contents xi
  • Introduction 1
  • Part One 15
  • 1 - Where Do I Stand? 17
  • Conservative 21
  • Conclusion 28
  • Socialist 44
  • Notes 46
  • Part Two 57
  • 2 - The Presidency 61
  • Conservative 67
  • Socialist 79
  • Notes 85
  • 3 - The Pentagon 101
  • Conservative 107
  • Socialist 117
  • 4 - The Secret Police 133
  • Conservative 139
  • Socialist 152
  • Notes 160
  • Part Three 167
  • 5 - Elite Clubs and Associations 169
  • Conservative 173
  • Notes 184
  • Notes 192
  • 6 - Multinational Corporations 209
  • Conservative 213
  • Socialist 221
  • Notes 244
  • 7 - Organized Crime 257
  • Conservative 259
  • Socialist 264
  • Part Four 283
  • 8 - Congress 285
  • Conservative 289
  • Socialist 296
  • Notes 303
  • 9 - The Courts 315
  • Conservative 319
  • Socialist 330
  • Notes 337
  • 10 - Regulatory Agencies 347
  • Conservative 349
  • Socialist 361
  • Notes 369
  • Political Parties 385
  • Conservative 387
  • Liberal 396
  • Conclusion 410
  • 12 - Academia 413
  • Conservative 416
  • References 427
  • Notes 434
  • Part Five 449
  • 13 - The Media 451
  • Conservative 453
  • Liberal 467
  • Notes 474
  • 14 - Banks 483
  • Conservative The Great Banking Retreat. 485
  • Socialist 489
  • Notes 497
  • 15 - Unions 511
  • Conservative 513
  • Notes 519
  • A Critical Issue 537
  • 16 - The Economic Crisis 539
  • Conservative 542
  • Socialist 544
  • Notes 550
  • Part Seven 557
  • 17 - Political Programs 567
  • Louis Banks. the Mission Of Our Business Society. 568
  • Ralph Nader and Donald Ross. Toward an Initiatory Democracy. 576
  • Stanley Aronowitz. On Organization: A Good Party Is Hard to Find. 581
  • Mass Parties and Reformism 587
  • Notes 596
  • Fred R. Harris. Up With Those Who'Re Down. 602
  • Part Eight 613
  • Appendix 621
  • Note 644
  • Index 649
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