source: The Paula Gordon Show
Money, Empire & Collapse
Prior to the current crisis, the financial sector of America's economy accounted for more that 20% of GDP and 40% of profits ... an historical prescription for decline and disaster.
<SPAN style="BACKGROUND-COLOR: #ffff00">The United States’ whole economy is now dominated by finance and that is a huge mistake</SPAN>, says Kevin Phillips. He’s one of the nation’s premier economic and political analysts, who bases his deep concern for the country’s future on his careful study of failed empires. <SPAN style="BACKGROUND-COLOR: #ffff00">While the financial sector has quietly taken over the economy</SPAN>, he says, the American electorate has tolerated politicians who have no sense of what America's changing role must be.
“Finance is the biggest thing in the (American) economy, while we pretend there’s another real economy. <SPAN style="BACKGROUND-COLOR: #ffff00">Finance has 20 to 21% of gross domestic product (GDP). Manufacturing is down to 12%. There is no historic example of a great power that has let itself financialize, where manufacturing has been subordinated, that has come back from it</SPAN>.
“Now America has taken a huge black eye in the financial world, on top of the very well deserved black eye in Iraq which basically wound up quintupling the price of oil. We've got housing prices collapsing, we've got debt building up like never before. We've got oil going over the moon, and the dollar committing currency suicide. The crisis cannot be addressed without understanding how big finance has become.
<SPAN style="BACKGROUND-COLOR: #ffff00">“Essentially finance has run amok. We have to worry because you can’t have 20 to 21 percent of the GDP implode without paying a huge price. Manufacturing was something that spread prosperity. It took a large part of the American work force and made them blue collar and middle class. Very few people make a better living out of finance. (Wall Street) is really the group that’s profiting. Enormously.”</SPAN>
Mr. Phillips outlines many of the ingredients that have allowed finance’s rise. In addition to credit cards, crazy financial instruments, exotic mortgages, he blames bad numbers.
“Economic statistics are misleading Americans. Those statistics are starting NOT to mislead people overseas who are selling the dollar because they can't believe American statistics. We may actually have negative GDP growth. <SPAN style="BACKGROUND-COLOR: #ffff00">The Bush Administration (reportedly) cooked the unemployment numbers. The Consumer Price Index (CPI) was redefined in the late seventies and early eighties</SPAN>. We probably have 6 to 9 percent inflation. (Suppressed statistics) made a good part of the housing bubble possible, the bubble for which we’re now paying such a huge price. And some say the Social Security of a person who retired back in the 80's might actually be about 50% higher now if there had been legit, fully straightforward numbers.”
<SPAN style="BACKGROUND-COLOR: #ffff00">He points fingers at Democrats and Republicans alike, as well as the American people. </SPAN>
“The Republicans were in power during the ‘80s when you had the first wave of financial bailouts. (The Democrats) were involved in three or four bailouts. Bill Clinton and financial Democrats were very much involved in deregulation, doing away with Glass-Stegall and credit card regulation. Then the Republicans came back with George W. Bush and it was more of the same. Right at the heart of it, politicians don't want to make any decisions, much less the hard ones.
“There's no record of politicians being able to grapple with this and turn it around. I guess I've reached the point where I think all you can do is try to mitigate it and hope that the transition process is perhaps less painful than usual. And that when we come out at the end of the non-imperial tunnel, things are better.”
Money, Empire & Collapse
Prior to the current crisis, the financial sector of America's economy accounted for more that 20% of GDP and 40% of profits ... an historical prescription for decline and disaster.
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<SPAN style="BACKGROUND-COLOR: #ffff00">The United States’ whole economy is now dominated by finance and that is a huge mistake</SPAN>, says Kevin Phillips. He’s one of the nation’s premier economic and political analysts, who bases his deep concern for the country’s future on his careful study of failed empires. <SPAN style="BACKGROUND-COLOR: #ffff00">While the financial sector has quietly taken over the economy</SPAN>, he says, the American electorate has tolerated politicians who have no sense of what America's changing role must be.
“Finance is the biggest thing in the (American) economy, while we pretend there’s another real economy. <SPAN style="BACKGROUND-COLOR: #ffff00">Finance has 20 to 21% of gross domestic product (GDP). Manufacturing is down to 12%. There is no historic example of a great power that has let itself financialize, where manufacturing has been subordinated, that has come back from it</SPAN>.
“Now America has taken a huge black eye in the financial world, on top of the very well deserved black eye in Iraq which basically wound up quintupling the price of oil. We've got housing prices collapsing, we've got debt building up like never before. We've got oil going over the moon, and the dollar committing currency suicide. The crisis cannot be addressed without understanding how big finance has become.
<SPAN style="BACKGROUND-COLOR: #ffff00">“Essentially finance has run amok. We have to worry because you can’t have 20 to 21 percent of the GDP implode without paying a huge price. Manufacturing was something that spread prosperity. It took a large part of the American work force and made them blue collar and middle class. Very few people make a better living out of finance. (Wall Street) is really the group that’s profiting. Enormously.”</SPAN>
Mr. Phillips outlines many of the ingredients that have allowed finance’s rise. In addition to credit cards, crazy financial instruments, exotic mortgages, he blames bad numbers.
“Economic statistics are misleading Americans. Those statistics are starting NOT to mislead people overseas who are selling the dollar because they can't believe American statistics. We may actually have negative GDP growth. <SPAN style="BACKGROUND-COLOR: #ffff00">The Bush Administration (reportedly) cooked the unemployment numbers. The Consumer Price Index (CPI) was redefined in the late seventies and early eighties</SPAN>. We probably have 6 to 9 percent inflation. (Suppressed statistics) made a good part of the housing bubble possible, the bubble for which we’re now paying such a huge price. And some say the Social Security of a person who retired back in the 80's might actually be about 50% higher now if there had been legit, fully straightforward numbers.”
<SPAN style="BACKGROUND-COLOR: #ffff00">He points fingers at Democrats and Republicans alike, as well as the American people. </SPAN>
“The Republicans were in power during the ‘80s when you had the first wave of financial bailouts. (The Democrats) were involved in three or four bailouts. Bill Clinton and financial Democrats were very much involved in deregulation, doing away with Glass-Stegall and credit card regulation. Then the Republicans came back with George W. Bush and it was more of the same. Right at the heart of it, politicians don't want to make any decisions, much less the hard ones.
“There's no record of politicians being able to grapple with this and turn it around. I guess I've reached the point where I think all you can do is try to mitigate it and hope that the transition process is perhaps less painful than usual. And that when we come out at the end of the non-imperial tunnel, things are better.”
) unprecedented in this country
