This economics paper by Edward Fullbrook nails what has been going on economically and politically for many years, starting with Reagan and building over the administrations and decades into the catastrophe that most of us are experiencing today. The important angle here that informs the privatization of the fisheries and the eminent domain usurpation---through Marine Protected Areas for the energy-industrialization of the ocean, for one example---is that fishing and the outer continental shelf are apparently the main ingredients for the plutocracy's next "economic bubble".
The political economy of bubbles
By Edward Fullbrook1 [United Kingdom]
real-world economics review issue no. 59 Membership in the WEA is free ,
Copyright: Edward Fullbrook, 2012
Over the past thirty years in the US and the UK there have been large upward redistributions of income from the bottom 90 per cent to the top 1 per cent and especially to the top .1 per cent. These redistributions are specific to these economies rather than a general phenomenon of advanced economies. This paper argues that these redistributions have taken place because of fundamental changes, albeit informal, in the political structures of the US and the UK. Drawing on Citigroup reports and charting the interplay between Goldman Sachs and the Obama administration, the paper argues that these changes have been realised through organized, systematic, conceptualized and financially motivated subversions of the democratic process. Strategies for effecting and preserving these changes are examined. Some of the changes in law and government policy which were enabled by the new political structure and which in turn enabled the creation of the most recent financial bubble are listed. The paper concludes that it is in the interests of the new political order, secretly called "plutonomy" by its insiders, to have more financial bubbles in the future.
With courageous but inconsequential exceptions – Galbraith senior comes especially to mind – explicit political economy has for generations been essentially dormant, either the slave of historically eroded categories or a cover for ideological exercises. Recently Hudson, Keen, Baker, Wray, Kadri, Hillinger and others have struggled to awaken minds to political determinants which in our time often shape economies more profoundly than the idealized and purely economic ones traditionally portrayed in the classroom. In the spirit of their undertakings, briefly I am going to consider three hypotheses.
- 1. In recent decades there has been a significant change in the political structures of both the United States and the United Kingdom.
- 2. Recent occurrences of financial bubbles are causally related to these changes in the political structures of the United States and the United Kingdom.
- 3. Without a reversal of the changes in the political structures of the US and the UK, the cycle of financial bubbles and the crises that follow their collapse are likely to continue.
1. Upward redistributions
Over the past thirty years in both the US and the UK there have been large upward redistributions of income in which the beneficiaries have comprised a tiny per cent of the population and the losers the overwhelming majority, roughly ninety per cent. This pattern has not generally characterized other advanced economies. The following set of six graphs illustrates these facts.
For a link to the complete paper, Please see http://www.paecon.net/PAEReview/issue59/Fullbrook59.pdf