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Neoliberalism caused the collapse, Neoliberalism is selling us out to bankers!

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posted on May, 31 2010 @ 10:28 PM
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You flip through threads on ATS and channels on TV and you are probably going to see someone saying how Socialism has led to massive debt. From Canada health care problems to Greek financial crisis. People are calling it the fault of Socialism that has led to a dependence on the government and laziness. I am here to say, you just don’t know.

I am not going to say you have to be a Socialist or support a Welfare state, because you don’t have to, be a Libertarian or Anarchist if you want, the point is to just show WHY we are having these problems.

Let’s start just after the second world war. The Golden Age was a period lasting from 1945 to 1973, varying by country, that was dominated by The Bretton Woods System and Keynesian Economic. But the use of Keynesian economics and the Bretton Woods System ended during the oil crisis of 1973.

When the oil crisis occurred the policies that ushered in the golden age ended and we entered a transition period across the world. In the USA we suffered serious economic stagnation which marked the Ford, Carter and early Reagan years. But the USA emerged from that system with a new global model in hand, supported by an alliance of Reagan, Thatcher and others. Their impact on economics has lasted since then and has changed the policies of both the left and the right.

Neoliberalism

Williamson's list included ten points:
• Fiscal policy Governments should not run large deficits that have to be paid back by future citizens, and such deficits can only have a short term effect on the level of employment in the economy. Constant deficits will lead to higher inflation and lower productivity, and should be avoided. Deficits should only be used for occasional stabilization purposes.
• Redirection of public spending from subsidies (especially what neoliberals call "indiscriminate subsidies") and other spending neoliberals deem wasteful toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment
• Tax reform– broadening the tax base and adopting moderate marginal tax rates to encourage innovation and efficiency;
• Interest rates that are market determined and positive (but moderate) in real terms;
• Floating exchange rates;
• Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by law and relatively uniform tariffs; thus encouraging competition and long term growth
• Liberalization of the "capital account" of the balance of payments, that is, allowing people the opportunity to invest funds overseas and allowing foreign funds to be invested in the home country
• Privatization of state enterprises; Promoting market provision of goods and services which the government can not provide as effectively or efficiently, such as telecommunications, where having many service providers promotes choice and competition.
• Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions;
• Legal security for property rights; and,
• Financialization of capital.


Neoliberalism became key to the economics of most western countries. Here are some examples from the Neoliberalism page.

Australia: In Australia, neoliberal economic policies have been embraced by governments of both the Labor Party and the Liberal Party since the 1980s. The governments of Bob Hawke and Paul Keating from 1983 to 1996 pursued economic liberalisation and a program of micro-economic reform. These governments privatized government corporations , deregulated factor markets, floated the Australian dollar, and reduced trade protection.

Canada: In Canada, these policies identified with neoliberalism (reducing taxes and welfare spending, minimizing of government and reform of public healthcare and education, among others) are often associated with Brian Mulroney, Mike Harris, Ralph Klein, Gordon Campbell and Stephen Harper.

New Zealand: The policies included cutting agricultural subsidies and trade barriers, privatising public assets and the control of inflation through measures rooted in monetarism, and were regarded in some quarters of Douglas's New Zealand Labour Party as a betrayal of traditional Labour ideals. The Labour Party subsequently retreated from pure Rogernomics, which became a core doctrine of ACT. The Labour Party leader planned to create a 15% flat tax in New Zealand, and to privatise schools, roads and hospitals, which was moderated by the Labour cabinet at the time,[48] although the resultant reforms were still generally considered radical in a global context. After Douglas left the Labour party, he went on to co-found ACT in 1993, which regards itself as the new liberal party of New Zealand.

Iceland: Iceland began implementing neoliberal economic policies beginning in the late 1980s. As measured by the Economic Freedom of the World, it had the 53rd "freest economy" in 1975 and it was one of the poorest countries in Europe. In 2004, it had the 9th freest economy and it was one of the richest.[55] However, by 2009, the country was bankrupt, a consequence that a number of observers have attributed directly to Iceland's adoption of neoliberal economic policies.

United Kingdom: In 2001 Peter Mandelson, a Member of Parliament belonging to the British Labour Party and closely associated with Tony Blair, famously declared that "we are all Thatcherites now."[73] In reference to contemporary British political culture it could be said that a "post-Thatcherite consensus" exists with regard to economic policy. In the 1980s the now defunct Social Democratic Party adhered to a "tough and tender" approach in which Thatcherite reforms were coupled with extra welfare provision. Neil Kinnock, leader of the Labour Party from 1983–1992, initiated Labour's rightward shift across the political spectrum by concurring largely with the economic policies of the Thatcher governments. The New Labour governments of Tony Blair have been described as "neo-Thatcherite" by some since many of their economic policies mimic those of Thatcher.[74][75]
Most of the major British political parties today accept the trade union legislation[76],[neutrality is disputed] privatisations and general[clarification needed] free-market approach[77][78] that Thatcher's governments installed. By 2009 no major political party in Britain was committed to reversing the Thatcher governments' reforms of the economy.[

United States: During Reagan's tenure, GDP grew at an annual rate of 3.4% per year.[82] Unemployment dropped and inflation significantly decreased.[83] Average real wages were stagnant, however, as inequality began to grow for the first time since the 1920s. Some, like William Niskanen, would point out two facts in response, the first being that average compensation for workers (that is wages+fringe benefits) went up through the 80s, and that every quintile of society performed better during the 80s. The policies were derided by some as "Trickle-down economics,"[84] due to the significant cuts in the upper tax brackets. There was a massive increase in Cold War related defense spending that caused large budget deficits,[85] the U.S. trade deficit expansion,[85] and contributed to the Savings and Loan crisis,[86] In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion,[87] and the United States moved from being the world's largest international creditor to the world's largest debtor nation.




There is opposition and support to Neoliberalism. You can read the support on the page, I will post the opposition though.


Opponents of neoliberalism argue the following points:

Globalization and liberalization subvert nations' ability for self-determination; neoliberal countries are in turn subject to a "virtual parliament" of currency speculators whose attacks or threats of attack are used to limit policy options.
Exploitation: critics consider capitalist economics to be exploitative.
Environmental costs: critics argue that neoliberalism leads to more transportation, and unregulated markets lead to more industrial production;[citation needed]
Negative economic consequences: Critics argue that neo-liberal policies produce inequality and deterioration in living standards without the improvements in efficiency which are predicted.
Increase in corporate power: some anti-corporate organizations believe neoliberalism, unlike liberalism, changes economic and government policies to increase the power of corporations and large business, and a shift to benefit the upper classes over the lower classes.[97]
There are terrains of struggles for neoliberalism locally and socially. Urban citizens are increasingly deprived of the power to shape the basic conditions of daily life.[30]
Trade Led, unregulated economic growth and state regulation of pollution and other environmental impacts economic growth[98]
It is claimed by that deregulation of the labor market produces flexibilization and casualization of labor, greater informal employment, and a considerable increase in industrial accidents and occupational diseases.


[edit on 5/31/10 by Misoir]




posted on May, 31 2010 @ 10:29 PM
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Wonder why we have massive debt and trade deficits? It’s because of Neoliberalism. If we want to keep Neoliberal policies that render our nations economics to the will of international bankers and repeal our welfare and safety nets, so be it. But if we want to return to our period of massive international growth, prosperity and equality, and the return our center-left parties to the center left we must return to keynesian economics. Or we could take a third path. Let the people choose, do you want Neoliberals or do you want Keynesians? A real left and right, not Neoliberal economics/Socially liberal and Neoliberal economics/Socially conservative.



posted on May, 31 2010 @ 11:03 PM
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reply to post by Misoir
 


Just givin this thread a bump.



posted on May, 31 2010 @ 11:08 PM
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Misoir you seem to be contradicting yourself big time when you describe as "Neoliberalism"


Williamson's list included ten points:
• Fiscal policy Governments should not run large deficits that have to be paid back by future citizens, and such deficits can only have a short term effect on the level of employment in the economy. Constant deficits will lead to higher inflation and lower productivity, and should be avoided. Deficits should only be used for occasional stabilization purposes.


And then you say

Wonder why we have massive debt and trade deficits? It’s because of Neoliberalism.
Can hardly be because of neoliberalism when excessive state borrowing is the first "don't do"?

Whatever name you call it, we have a version of capitalism that hasen't been well regulated when it comes to private borrowing, and (though that's now, mostly changed) it remains true that state borrowing is badly regulated (and hence Greece's mess).
We have corruption, elites, conspirators, and (of course) plain old, crooks too, but that's being going on since the dawn of mankind!

Still was interesting hearing how you linked the Fall of The Golden Age with a fall in growth.

Although I disagree with broadening of the tax base (I want to take the working class out of it, as much as possible) I agree with every other of "William's points". Will you explain which ones you oppose, and why that "stacks up"?
In my view history shows subsidies would (often) be better spent on public services. However Tax Breaks are proven to be quite effective, a tax break just allows small buisness to grow large without government weight drowning so many entrepreneurs.



posted on May, 31 2010 @ 11:21 PM
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reply to post by Liberal1984
 


You misunderstood me. Just look at the end of my statement, I said we can't have a welfare state and Neoliberalism, it's either 1 or the other. Because Neoliberalism with a welfare state will lead to massive debt.

I oppose...

• Redirection of public spending from subsidies (especially what neoliberals call "indiscriminate subsidies") and other spending neoliberals deem wasteful toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment
• Tax reform– broadening the tax base and adopting moderate marginal tax rates to encourage innovation and efficiency;
• Floating exchange rates;
• Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by law and relatively uniform tariffs; thus encouraging competition and long term growth
• Liberalization of the "capital account" of the balance of payments, that is, allowing people the opportunity to invest funds overseas and allowing foreign funds to be invested in the home country
• Privatization of state enterprises; Promoting market provision of goods and services which the government can not provide as effectively or efficiently, such as telecommunications, where having many service providers promotes choice and competition.
• Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions;

I don't exactly know what financialization of capital means so I did not add it to my list. So now I will show you why I think it 'stacks up'.

1. When they want redirect of subsidies to minimal things that advance economics it is just that, only advancing economics. It is not advancing people's position in life, it is not advancing their working conditions, it is not providing them with other services such as transportation, day care, maternity/paternity leave, paid vacation, lower work weeks, or other services that better the overall public; not jsut the ones that have the ability to succeed in life.
2. By broadening the tax base you are adding more people in who simply can't afford to pay taxes on top of reductions in certain public services ranging from child care to transportation. Then they reduce taxes on the wealthy which has not been proven to help the economy, only the wealthy.
3. That is handing over our exchange rates to corporations and bankers who seek to manipulate and get rich.
4. Liberalizing trade is good for lowering prices, but it is bad for both the country exporting and the country importing. The people exporting goods are usually exposed to poor working conditions, slave labor, poor wages, unsanitary conditions, devestation of natural habitat leading to diseases and pollution. And the importer country loses manufacturing jobs and are either forced into welfare, unemployment, government jobs, low paying jobs or jobs that help facilitate monopolistic control over the economy.
5. By allowing people, mostly corporate/banker, to invest in countries it is usually for certain purpose to help advance their income obviously. That means if people invest in countries that have lower wages, less government services, freer trade and lower taxes it will force other nations to lower their standards of living to compete. It will be a race to the bottom.
6. I support choice and competition, but privatizing state enterprises leads to higher costs for the people and people without the means to pay lose those services. It may increase the availability and lower the price but that comes at the price of forcing others out that are less fortunate, which leads to more people going without those services. In addition it also allows those enterprises to go overseas and fire the employees who work their. And in the case of prisons it demands more prisoners which leads to the owners of the prisons to bribe judges for longer stay in prison or sending people there who don't need to go.
7. Deregulation is what caused this crisis. It leads to corruption, greed and a monopolistic economy by allowing the elite few to do illegal things and profit at the expense of workers, investors and retirees.

[edit on 5/31/10 by Misoir]



posted on Jun, 1 2010 @ 04:37 AM
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Nothing substantial to debate (no time'n'mood) but it is nice phrase which describe my opinion on economic neoliberalism:

Neoliberal theology is criminal ideology.



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