Economic and Social Crisis in America: Burglarious Stimulus.

By John Kozy   Global Research, February 26, 2010

Paul Volker has recently said, "Well, weve got a problem in governing in this country, our inability to deal with very large evident problems is apparent."

Indeed we do, and the problem is not new. The problem became evident to many long before Mr. Volker's term as Chairman of the FED, and he, along with many others, are complicit in perpetuating it.

There are two beliefs held by America's powerful elite that make solving social problems impossible. In fact these beliefs exacerbate existing problems and continually create new ones.

Much of America's political and economic communities hold the belief that government exists to promote private-sector business which will in turn use its ingenuity, expertise, and the profit motive to solve society's problems, relieving the government of that responsibility. Politicians of both parties, more or less, have adopted this view. It accounts for the government's unwillingness to tax corporations and the wealthy, for both the Congress' ability to find money for corporations and war but rarely for people, and for the Republican assault on social programs, even social security.

Republicans claim that all such programs should be privatized. Let the private sector handle social problems. It matters not that more than two hundred years of history proves the view to be misguided, perhaps something that Mr. Volker has come to finally recognize. No known instance of the private sector's addressing and solving a social problem exists. Social problems abound in all societies that have from time to time adopted this view. Since the fall of communism in Bulgaria, unsolved murders have become epidemic, and look at what happened in Russia and Israel after they abandoned communism and socialism respectively. Crime and poverty have become widespread while billionaires have crawled from the woodwork.

The reason this always happens lies in another view held by the same elite: private-sector companies have one and only one responsibility the pecuniary interests of their stockholders. Private-sector companies have no social responsibilities. The chief proponents of this view are the late Milton Friedman and the Chicago school of economics, although the view is quite widespread and was formulated long ago. It is sophistically called economic freedom.

That these two notions are incompatible should be obvious. The first places the responsibility of solving social problems on the private sector and the latter removes that responsibility from the very same private sector. The result is that neither the private sector nor the government takes responsibility for the solution of the "very large evident problems" that Mr. Volker now recognizes.

 

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