Setting the Record Straight

October 15, 2008

Good News From the Meltdown

Chance to Remake America

     Believe it or not, there are several good signs emerging from the financial meltdown, enabling the U.S. government to think “outside the box,” just as we did earlier on this page in our suggestion to Warren Buffett.
     First, the methods used to resolve the problem should help take some of the onus off the words “socialism,” “nationalization” and even “regulation,” terms that engender negative Pavlovian responses by the uninformed. That will allow for some creative solutions to many of the problems that have plagued the country for decades.
     Second, it should demonstrate anew the government needs to consider solving problems from the bottom up instead of the past and current trend, demonstrated at the beginning of the financial meltdown, solving problems from the top down. We labeled our way “trickle-up economics.”
     Third, we have a chance for a major makeover of U.S. policies across the board as the nation attempts to climb back to the top of the community of nations and tries to avoid losing its economic leadership status to the European Union, as now seems likely.

1.  Look for a major push by the next Congress and the next president, particularly if it is Barack Obama, to make major efforts to pass new regulations and restore old ones in the financial area.
     But the government is not likely to stop there. There have been widespread complaints about the lack of regulation in many other sectors of society, so look for new regulations in most areas and a return to enforcing regulations already in place. Along with this push will come a strengthening of several government institutions, beginning with the Food and Drug Administration.
     We suggested in an earlier piece the government build its own oil refinery to give it more muscle in influencing the price and supply of oil and gas that is a vital piece of the nation’s economy. Similar investments in other industries could give the government greater influence in them.
     By investing in banks and buying out major financial institutions, the government has overcome the previous onus labeled as “socialism” and taken a socialistic approach to resolving the financial crisis. There is nothing wrong with socialism as long as it never forgets its purpose is to serve the common weal. Past efforts lost that core purpose.
     Some of the government’s actions in the bailout were described as “nationalization.” If an industry operates against the interests of the common weal, such as the telephone industry has a history of doing and the oil industry often does, nationalization of that industry should not be off the table.
     Obviously, all these government interventions must be done with great care and never taking the eye off the prize: serving the common weal. But as the Bush administration economics leaders have demon-strated, the United States remains very reluctant to sign on to any of those three “evils.”
     But the idea that any of the three evils would be used as a tool by a U.S. Republican administration, let alone even a Democrat-led one, to solve an economic mess would have been unthinkable just weeks ago, let alone years ago.

NEXT, Part II: Trickle-Up and New America



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