Paul Craig Roberts: How Deregulation Has Resurrected American Economic Insecurity

[Jan Klimkowski]

The CIA official who revealed that the US government was torturing detainees in violation of US and international law, John Kiriakou, was subjected to wrongful prosecution and sentenced to prison. The elected officials who approved the torture and those who conducted the torture remain free of all charges to torture again.

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Gray demonstrates that the libertarian belief that free markets are something that the government suppresses and takes away from us is contradicted by the historical fact that "free markets are creatures of state power, and persist only so long as the state is able to prevent human needs for security and the control of economic risk from finding political expression."

Free unregulated markets have existed only during short periods of history when state power and economic conditions were conducive to the imposition of unregulated markets. Unregulated markets existed for awhile in Victorian England, and Clinton, Bush, Obama, Thatcher and politicians in Australia, and New Zealand have removed regulation from various economic activities from the 1980s through the present.

The evidence is in and piles up daily. Instability is on the rise, and with it has come economic insecurity. Homelessness is increasing. In the last decade, New York City has experienced a 73 percent increase in homelessness, while the net worth of the city's mayor has risen to $27 billion.

Deregulation of the financial system produced such massive instability that the Federal Reserve had to lend the banks $16 trillion (a sum equal to US national debt). The Federal Reserve is in the fourth year of monetizing $1 trillion annually of US debt, raising the specter of dollar devaluation and inflation. Once great manufacturing cities, such as Detroit, are in steep decline. Real interest rates are negative, depriving retirees of interest income. The high unemployment rate of recent university graduates, despite an alleged economic recovery, proves that education is no longer the answer. Millions of jobs have disappeared. Unemployment is high. Poverty has increased as has the number of Americans on food stamps.

The once vibrant American middle class is disappearing. The blue-collar working class is being proletarianized. Labor arbitrage across national borders has destroyed millions of US manufacturing and professional service jobs such as software engineering. What was formerly the incomes of millions of Americans was turned into incomes for Chinese, Indians, and into capital gains for shareholders and mega-million dollar bonuses for the corporate CEOs who offshored the Americans' jobs and banked the lower labor costs as profits.

Paul Craig Roberts nails it.