Groundhog Day

These are some comments on the book Wealth and Democracy by Kevin Phillips.

Obviously this book resonates with me and that’s why I referred to it in my book under the thin disguise of the title Wealth And Dupe-ocracy.

The key point of this book is that the pattern of speculative bubbles followed by economic dislocation is nothing new. We’ve been here before. The Gilded Age produced a huge recession just as the bubblicious 1920’s produced the Great Depression. The current bubble-cum-bust follows the same pattern – first there is corruption of the political ideology, followed by corruption of the political process, leading to wanton speculation and then a crash. The key point to take from these earlier examples is the fact that the problem didn’t just go away. Something had to change and it did.

In the first case the trust-busters led the charge to enact reforms. In the 1930’s it was the New Dealers who provided the reforms that produced sixty years of real economic growth. The lesson from history is clear – clean up the mess and a return to prosperity is possible. The first step to doing so will be to build public support for reforms. The gutting of the financial reform bill is the primary evidence that support for reform hasn’t yet reached the point where it can actually happen..

America’s past success has been based on its capacity for self-renewal and that capacity remains in a nation where people are still free to communicate ideas.

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