Bargaining 2016
The American Left* makes a distinction between Capitalism (you know the stuff that makes America GREAT!) and Predatory Capitalism (the not so great thing that’s all about greed and selling your grandmother and stuff).
The idea here is to create a kind of non-predatory Capitalism where the Capitalist Leviathan is tied down with so many regulations that it can “barely move its little finger”. To achieve this feat of mastery, progressives look to a newly invigorated Democratic party which will go back to its roots as the Party of the slave owners People and enact appropriate legislation to tame the savage beast.
* and to be fair the Left pretty much everywhere in the Western world.
Depression 2018
Doesn’t look like it’s gonna happen.
Acceptance 2020
Nope, it’s definitely not gonna to happen.
Never Stop Posting 
If by “Left” you’re excluding Socialists…
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“Depression 2018” in the sense of major economic downturn probably will happen.
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I’d include the vast majority of socialists at this point in time.
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(Okay, not the socialists I know, who at least rant about uprooting Capitalism, but were also Bernie bros or supporters.)
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I think one of the problems in the west related to this thinking is that capitalism has become synonymous with (free) market, which is of course completely wrong. So when they say that you can have a kind of regulated non predatory capitalist system, what they mean is that you can still have a relatively free market system.
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I’m actually expecting the US economy to do a little better as Trump takes the taboos off fiscal policy. He may invest in rather unproductive things: walls, military etc. but these will serve as employers in the short term and provide some economic stimulus.
Note: I’ve been wrong about this sort of thing before however (in the Australian context). It really comes down to the forces of Austerity that are arrayed against him plus his own real intentions.
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I more believe the things he says in private: tax cuts for the ultra-wealthy. I think the wall talk is blowing smoke, and increased spending on the military always really means buying more gadgets (not more troops or living wages for them), and in this case, considering he’s an 80s throwback, I’m going to predict a return of SDI!
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predatory capitalism is a redundant statement because capitalism is a predatory system and if you have to nail something down to where it can’t move it is NOT something you should be championing AT ALL … it’s like the faulty guns Remington just got caught for – telling people that if they take the safety off only when pointing down you won’t get shot if it accidentally goes off but otherwise it’s a great gun ;-/
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If we’re talking about the financial system, thinking they went rogue because of lack of regulation is a failure to understand the problem. They are heavily regulated. It’s just that it doesn’t matter. No amount of regulation will ever be water tight to the point of “tying the beast down” completely. Specially when the very regulators have all been captured.
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I think the problem the Left has is they haven’t (by and large) got a coherent message on What Went Wrong with regard to Communism, and ever since then all they’ve done (in the U.S.) is pretty much Not Quite So Much Free Market. But, as Marcelo Camelo rightly points out, there is a long history of regulators becoming most accomodating to the people who are able to spend the most time and effort (and money) lobbying for their point of view. It really ends up as being even more beholden to the currently wealthy and powerful than laissez faire would be, since there at least those currently on top are occasionally upended.
Not saying that one couldn’t make a more workable non-capitalist economic system/theory, but the current Left doesn’t have one (that most people on the Left are familiar with, anyway), so unlike the Communists of 100 years ago, they aren’t really advocating FOR anything, just pointing out where capitalism goes wrong. Which it does, in lots of ways, but you need to have a coherent alternative.
In fact, Bernie’s “let’s be like Denmark”, while flawed in many ways, was at least a coherent statement of what we could be doing differently. You’ve even got a working model to point at. Most of the American Left does not have that much.
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The part of the financial system that went rogue and nearly destroyed the world economy was a part that was specifically unregulated. And now Trumpublicans plan to get rid of the Glass-Steagal regulations. So expect another massive banking crisis in the future, maybe not for another 10 years, but…
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I think you mean Dodd-Frank because Glass-Steagal was already killed by Bill Clinton in the 1990s.
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Funny how the President suddenly passes laws, and not, say congress.
Gramm, Leach and Bliley
https://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act
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Well, it certainly didn’t get vetoed. The method of legislating in the US is a wonderfully convenient mess in which everyone can shift the blame and point the finger at somebody else. In this instance I dont think there was any question that the repeal of G/S had the full support of the President and his Secretary of the Treasury.
The interesting thing about the GOP controlling congress and the presidency today will be that they won’t have that excuse.
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Statement on Signing the Gramm-Leach-Bliley Act
November 12, 1999
Today I am pleased to sign into law S. 900, the Gramm-Leach-Bliley Act. This historic legislation will modernize our financial services laws, stimulating greater innovation and competition in the financial services industry. America’s consumers, our communities, and the economy will reap the benefits of this Act.
Beginning with the introduction of an Administration-sponsored bill in 1997, my Administration has worked vigorously to produce financial services legislation that would not only spur greater competition, but also protect the rights of consumers and guarantee that expanded financial services firms would meet the needs of America’s underserved communities. Passage of this legislation by an overwhelming, bipartisan majority of the Congress suggests that we have met that goal.
The Gramm-Leach-Bliley Act makes the most important legislative changes to the structure of the U.S. financial system since the 1930s. Financial services firms will be authorized to conduct a wide range of financial activities, allowing them freedom to innovate in the new economy. The Act repeals provisions of the Glass-Steagall Act that, since the Great Depression, have restricted affiliations between banks and securities firms. It also amends the Bank Holding Company Act to remove restrictions on affiliations between banks and insurance companies. It grants banks significant new authority to conduct most newly authorized activities through financial subsidiaries.
Removal of barriers to competition will enhance the stability of our financial services system. Financial services firms will be able to diversify their product offerings and thus their sources of revenue. They will also be better equipped to compete in global financial markets…. etc.
http://www.presidency.ucsb.edu/ws/?pid=56922
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John Hardy not a Turnbull fan I checked. That shit passed with 83%.
Apparently almost everybody thought it was good.
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Yep. It was the era in which centre left liberalism embraced the financial industry.
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When the bubble was building up pressure.
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That’s what I get for not fact-checking details for once. Yes, Dodd-Frank.
Personally, it was very obvious to me that there was a horrendous housing bubble going on starting in the 90s. It’s one of the reasons we moved.
I recommend the movie “The Big Short” to anyone who hasn’t seen it.
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In fact, I can’t say that I’m not disappointed in the Obama administration, and a big part of why is that they didn’t really do anything about the over-financialization of the economy. Last I read, there is an optimum of roughly 5% for the finance sector relative to GDP. We’re way over that, and haven’t even admitted it’s a problem. https://en.wikipedia.org/wiki/Financialization .
I believe there was a moment after the 2008 Panic, when America was ready to be told that we had to make debt less important in our economy. I fear the moment has passed (though the next crisis will perhaps bring it back).
Nassim Nicholas Taleb has pointed out, “every truly long-lived society eventually bans interest”.
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Mark Blyth, who I posted about recently, has actually been quite positive about Dodd-Frank’s role in deleveraging the American economy.
I’m not sure how far to take that but his line is that it is a thick tome of regulations which get compliance managers involved at every level (where they used to be absent) and he thinks a repeat of 2007-8 is unlikely because of it.
Of course Trump will now scrap it so we are definitely back on track for another bubble. The new head of state is after all the biggest crook in the real estate business.
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So based on that metric, Ross, it looks as if the time to do something about the financial sector takeover of the country was around 1980 or so…
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In fact, mathew , I would pretty much agree with that. There was a moment after the S&L crisis in the early 90’s when it could have been discussed, also, but GHWB let it pass. His new tax, despite “read my lips, no new taxes”, was at least in large part to deal with the S&L aftermath, so he should have called it out at the time if only for his own sake.
I think that Dodd-Frank follows the “if we closely regulate it, then it will be ok if it’s that big a part of the economy” school of thought. But, since the empirical record of regulators preempting speculative bubbles is pretty poor, I don’t think that method is likely to work. It doesn’t appear to me that we have done anything to prevent a repeat of what happened in 2008. I don’t expect Trump to do anything either, but really Obama is the one who had the window of opportunity to do something, when the carnage was fresh on everyone’s mind. The objective, however, should be a smaller financial sector, because past a certain size (relative to the economy as a whole) I don’t know that it’s possible for it to be safe.
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I’m pretty sure Trump has called out Dodd-Frank as one of the things he intends to get rid of. Or at least, his supporters cry out that it is explicitly restricting loans to small businesses (although they fail to mention just exactly how), because, of course, we’re in a post-truth society now.
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Yes I believe that’s in his program.
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