It is interesting that the author marks 1978 as the arrival of four decades of neoliberal policies. That was also the year China declared it was opening up to the world economy and embarked on the one-child policy, which became mandatory in urban areas very quickly. The US population between 1978 and today increased by about 112 million to 335 million people. China’s population increased from 956 million to 1,425 million today. Notably, China’s population is shrinking, while US population growth has slowed to around .5% a year. Such changes in demographics cannot come without a shift in the political discussion. In China, for example, youth unemployment is sky-high, but not due to a lack of jobs, but a lack of interesting or well-paying jobs. China is the largest adopter of industrial robots. Similarly, the US still has tons of shit jobs available, but youth unemployment is about double the national average because working in dead-end jobs is not a path to upward social mobility. A shared feature of the US and China is the poor quality of early childhood support systems. As Biden’s Child Tax credit showed, the matter was rectifiable. Millions of kids were suddenly lifted out of poverty, creating the conditions for a general benefit to society two or three decades down the line. China solved the problem earlier with very low retirement ages (60 for men and as low as 50 for women), which means that grandparents become the default daycare for parents with young children and the social safety net for small children remained very undeveloped. Instead of ignoring rights of children, the emergent focus will be on nurturing and protecting human capital and their natural legacy. These bundles of genetic wonder deserve more than war, famine and a discombobulated climate, issues that at best have a tangential relation to tax cuts.
President Carter refused to support a local proposal from my former hometown of Youngstown, Ohio for a worker-owned takeover of a steelmaking company that had announced that it would be closing, even though a feasibility study said their rescue plan was sustainable, while around the same time giving his blessing to a Chrysler Motors bailout led by Chairman Lee Iacocca that enabled the firm to break labor contracts and undo existing salary, benefits and pension agreements.
It was disappointing at the time to hear the proposal for a worker-supported company buyout smeared as “communist.”
According to the Office of the Inspector General of the Troubled Asset Relief Program (TARP) set up in the aftermath of the Crash of 2008, as of July 2019 — the last I checked — the government had criminally charged 428 individuals in the finance sector, including 88 bankers, with fraud, secured 369 convictions, and sentenced 283 to prison, and recovered billions of dollars.
As of that time, July 2019, others were either awaiting trial or awaiting sentencing, and others may know of the disposition of those cases.
Over $100 billion in fines and penalties were levied against corrupt and predatory financial institutions — as well as ratings agencies that corruptly rubber-stamped toxic financial products as triple-AAA rated investments and enabled them to be sold to an unsuspecting global public which included pension funds, government agencies, and private and institutional investors.
Also under President Obama, the Consumer Financial Protection Bureau was established to root out fraud and abuse and stood up by the brilliant banking reform advocate Elizabeth Warren, who then passed off administrative duties to the bulldog prosecutor Richard Cordray, a former Ohio Attorney General.
And so, while prosecution of these complicated crimes has been difficult – partly because three decades of financial deregulation (beginning with the deregulation of credit card interest rates under President Carter) have legalized much of the activities relating to mortgage-backed derivatives that led up to the Crash – progress has been made in the area of fraud.
Thank you. I remember at the time, seeing no news reports of anyone being charged for the sub-prime loan crash. I also recall that “The Big Short” clearly stated at the end, that only one low-level banker went to jail.
I did go to the TARP OIG website. I probably missed it, but I couldn’t find a link to those kinds of data.
I haven’t followed the issue in recent years, and don’t know if any prosecutions are still being pursued.
Also, Obama signed Dodd-Frank legislation, the most significant banking regulation passed in 75 years, which, among other features, requires major banks to hold higher reserves to protect its solvency in a financial and economic emergency and to comply with stepped-up regulations including regular audits, stress tests and assessments, and authorizes the government to unwind failing banks at no cost to the public if they are big enough that their collapse could damage the broader economy.
In '76, I volunteered for Mo Udall’s campaign. I do admire Carter as an ex-President, but I thought at the time, and still do, that Udall would have been the better President.
My team set rates for over two thousand banks across the U.S.
Working in risk management and credit, while positioning $4 billion daily, literally from where I sat, a thousand little things drove the banking collapse.
I am too tired today to go into details.
Maybe I could write a very detailed anonymous blog for Josh about these issues, if anyone would care to hear.
Here’s another thing we can thank Nixon for: lifting controls enacted under FDR to prevent unregulated investment capital from recolonizing poor and developing countries, which set the stage for sending jobs overseas to sweatshop countries.
Here are my thoughts on outsourcing, runaway factories and the decline of the American middle class (apologies for the length; I wrote this after the hapless Youngstown, Ohio Congressman Tim Ryan lost to wingnut JD Vance in a quixotic bid for Senate):
The 1973 oil shock and the recession that followed brought it crashing down. It’s easy to share a growing pie — but as productivity fell, inflation spun out of control, labor weakened, and U.S. manufacturers faced stiffer competition from abroad, economic growth slowed and the old political alignment came apart. It was Carter’s misfortune to govern during this period, made worse by the fact that he lacked political skill and his advisers didn’t know how to generate long-run economic growth in the face of seemingly intractable problems. Carter got rolled in the 1978 tax reform fight because his supply-side opponents, aided by Walker’s deft salesmanship, convinced people that they did know how to fix the economy. As one historian of the era put it, “Carter and his advisers vacated this intellectual space, which was filled by radical new solutions, capital gains reduction and supply-side tax cuts, [replacing] the assumptions that capital and labor should prosper together with an ethic claiming that the promotion of capital will eventually benefit labor — trading factories for finance.”
Factor in a climate of finger pointing and mutual distrust in our politicians and institutions following the collapse of the Nixon administration. It would have taken deft salesmanship and political management skills for any president elected in 1976 to not get rolled. That we elected an honest, decent person to the office says much about our hopes and dreams but does not speak to our lack of understanding the financial mechanizations that control our country even to this day.
Americans were worn out by the Vietnam war, astonished by the criminality of the Nixon White House and tuned into All in the Family, Happy Days and other sitcoms to escape reality.
Yes, and it’s ironic that the political beneficiaries of Watergate, and its legacy of corruption, cynicism, and mistrust in the government, were Reagan and the other anti-government conservatives, rather than progressive reformers
Mo Udall was my guy, too. I was on his New Hampshire primary staff (stating in the fall, '75); I would later organize for Mo in Vermont as was a Udall delegate at both the Vermont Democratic Convention and the Democratic National Convention in NYC, July, '76. Now that was fun. (I would work for Carter in Vermont in the general election - barely lost to Ford.)
Met Mo in May, '75 and became committed. Met Carter in July, had a wonderful ten-minute conversation, openly invited to join his campaign. But my heart was with Mo. Carter ran a brilliant campaign; hung out with some of them - great folks, I thought, very competent. Mo’s New Hampshire campaign was dysfunctional; we lost to Carter by 4,400 votes. The next week Carter was on the cover of both Time and Newsweek - while that week “Scoop” Jackson* cleaned Carter’s clock in Massachusetts - but no matter; from that point on it was Carter’s to lose.
I agree. Udall would certainly been better at working with Congress (Carter’s downfall; he didn’t do well with the Georgia State Legislature, either), and a President Morris Udall would have been a hell of a Chief of State.
*Hanging out with Jackson’s staff caused me to dramatically revise upwards my estimation of the man. They loved the guy. Apparently in private he was among other things, a great wit, a riot - but it could not translate to the pubic. I now think Jackson would have been a good president.
Nor me. Thank God for reggae. And the Grateful Dead. And Neil Young and Joni Mitchell. Much as I loved and love the rock from the late-60s - early-70s, as a whole the scene was getting tired and tedious. Also true that a many great 60s artists reached their zeniths in the 70s.
