We find ourselves in a situation where capitalists and the financial industry run our country and many other countries in the world. Over the last several decades the industry has deregulated itself and reduced its tax rates to allow it too concentrate the wealth of the country in its hands. At the same time it has allowed, through globalization, labor rewards to seek a level set by the lowest wage worldwide. In the process, it has destroyed the buying power of the great masses of the world population. To compensate, it has stimulated the demand for debt and hidden risk through the use of collaterization and derivative insurance products. This was a prescription for asset and debt bubbles and ultimate failure of the financial system, which has been prevented from collapsing totally only by the offloading of the debt onto governments.
Keynesians have viewed the rescue of the financial system, through large government expenditures, as paramount, but is it just delaying the inevitable? As long as we have the financial system running governments are we ever going to correct the problem of financial system running governments and bailing themselves out on the backs of the masses? This appears to be a question that answers itself in the negative. Keynesianism, the philosophy of the government stepping in to prop up demand as private sector demand wanes may work for normal business cycles, but does it really work to correct structural problems caused by lack of government control by the people?
A couple recent articles have shown that the incentives are all in the wrong direction, and that concentrated wealth in the hands of a few leads to control of all physical resources and inflation of commodity prices. In a recent article by Henry Blodgett in the Wall Street Journal, he demonstrates how the incentives perpetuate the problem. A recent post to The Economic Collapse blog show how commodity prices are skyrocketing. And, lately there have been reports of the buying up of agricultural land in Africa to take advantage of the rising cost of agricultural products. Where will it all end. Are the masses of the world’s population doomed to be serfs to a small percentage of wealthy capitalists? Or, is another depression necessary to wrest control of governments back from the financial industry? Pick your poison.