Considering it is all heading south anyway, isn’t it a pity that we missed the opportunity to build a sound currency? A few posters back someone said we might have at one point used all the billions we are pouring into private banks to make a government bank and let the private banks fail. Maybe we could have (or could still) created a sound dollar and done away with the Federal Reserve.

Eric

Horrid, but true! Google it.

Are you looking for that Roger? There seems to always be money in the public well. My point was in your separating, “environmental perspective” and “capitalist perspective.’’ That P~P dis-entanglement is readily apparent ‘out west’ and amounts to US cleaning up the mess be it a more singular externality like the Berkley Pit or a broader one, say, lack of salmon in the Sacramento river basin. I don’t believe that’s what you’re really trying to argue but it was none to clear to me in thta passing of phrase.

As the old saying goes, “man does not live on melamine alone.” If it’s just a capitalist story we seek why not just sell to the house of Saud or Dubai or China, after all we have squeezed most of the stuffing out? Seems you’re measuring success in a similar manner to how The Surge is being portrayed, or in light of todays events like how the transfer of governmental power[s] did not involve a coup.

LOL. You make a “salient” point about “shovelfulls”—which is the way most of us admittedly orally pronounce it, and the more grammatically correct “shovels-full” which
far fewer people use today—another indicator of our collective slide into linguistic sloth.

The state, of course, has many of the same structural faults as the private sector – namely, its vulnerability to oligarchic capture. We are watching a spectacular oligarcho-fest unfold before our eyes, as the Government which is supposedly worried about whether it can pay the medicare bills of the sick in 2040 slings trillions of dollars at the banks in a matter of six months. And you are correct that the best way to correct this situation is to destroy, to the extent that is possible, the entrenchment of the oligarchy through taxes. A marginal tax rate on incomes above of million per year of at least 70 percent would be an awful big help – and more, an inventive way of breaking up the wealth of the wealthiest, which is not income wealth, would also be a help. The more entrenched that wealth is, the more the private sector tends towards dysfunction, resulting in the hunt for high yield that gives us ‘cures’ for risky securitized commercial real estate mortgages instead of cures for malaria. Of course, the golden era of medicine, the fifties and the sixties, the anti-biotic revolution, was the direct result of state intervention. Penicillin production was funded during WWII by the state, the great pain relievers, like Cortisone, came out of military funding, the surgical procedures that resulted, eventually, in transplants again came out of state funding for military purposes, it was public health measures by the state that first brought down tb, etc., etc. Find a major disease, find the cure, and you will find research money traced back through publicly funded programs at universities, and national health care agencies, that were at the back of it. But this system also displays exactly what can go wrong with the state – the Bush pill bill, for instance, massively rewards inefficiency in Big Pharma and maintains the crazy IP system that makes health care costs go up when technology gets better – in opposition to, say, software. Healthcare that should be cheaper and cheaper is more and more expensive because of the entanglement of state and private interests.

To return to the argument, however – the conservative use of the term “crowding out” interests me, because what has been crowded out, for the past thirty years, is public investment. It has been crowded out in the name of the more “efficient” private sphere, but the standard of efficiency seems to be skewed – it isn’t more efficient at meeting mass needs for better education, cheaper healthcare, a cleaner environment. And when taking up the challenge of expanding housing, the private sector showed consclusively that it couldn’t do it. It couldn’t do it, that is, efficiently – because at the same time that the private sector was expanding credit, it was battering down the bargaining power of labor, and thus lowering the rate of increase of household income, or freezing it altogether. The private sector can’t insure retirement – the Chilean experiment, right now, the one that Bush’s privatization program was based on, is in freefall. And all the countries that followed Chile’s lead are watching as a generation’s pensions disappear. The business cycle will turn, and the private sector will eventually digest the programs laid down by the state again – but in this trough, it is time for the state to expand massively.

And a national bank is an excellent way for the State to force the private sphere to operate for the current Government’s good (eg big unnecessary building projects in marginal electorates).