EU-Digest/Arkansas Times: Deregulation fails big time

For the complete report from the Arkansas Times click on this link EU-Digest comments are included in the summary

Deregulation fails big time

Thoughtful people have warned of approaching economic disaster for some time, and these thinkers included professional economists. The recent noble prize winner Paul Krugman quickly comes to mind. Editorialists who regularly mocked Krugman's writings have grown quiet lately. But you really didn't need advanced degrees in economics to see the present mess coming. All that was required was some understanding of human nature, specifically the nature of the right-wing financiers who apply great influence on the American government. Greed drives them; moderation is repugnant. When deregulation became official government policy, when the upscale operators were no longer restrained by statutes or security guards, it was inevitable they would gorge themselves sick. They regard the American public as a dog regards a garbage can. They must be called off; they never quit voluntarily.

Note: EU-Digest: Even after we saw most of the stock market listed shares rise quickly again when governments around the world pumped billions of cash into what is basically a defunct Global financial and banking system, you can be sure the euphoria won't last. Unfortunately the present bail out plans applied are still based on the belief that a deregulated "trickle down" economic theory works.It does not. What really matters is to improve the financial health and economic status of the consumer.

When the consumer stops or slows down on his or her spending habits, for a variety of reasons, including unemployment, the party basically ends for the corporations supplying the goods and services to the consumer. No matter how much the government pumps into the financial system. Right now this is exactly what is happening. What is required are government funded programs which stimulate job creation or at least programs that are a mixture of corporate bailouts and economic rescue plans for the lower and middle class. A study by Acxiom, a data collection company in Little Rock, Arkansas, estimates that 19 percent of US households are "digging in" by dramatically tightening their belts, while 48 percent are maintaining the status quo on. Whit Andrews, vice president at Gartner, Inc. the world’s leading information technology research and advisory company, concludes: "a financial era is ending. The age of conspicuous consumption is over, and the age of conspicuous frugality starts now".

Nicolas Sarkozy, Angela Merkel, Gordon Brown, Barrack Obama and a few other enlightened politicians understand that capitalism needs an urgent overhaul and have been saying so.The formula is simple: job creation = spending power = economic growth. Unfortunately moving the "fat cats" from the strategic positions they presently hold will be a herculean task.