Sunday, November 06, 2011

More Than I Usually Expect

Give credit to the Washington Post for two provocative opinion pieces today. Taken together they ask some serious questions and offer strong support for their conclusions. Not the norm in the mainstream these days.

Stephen Pearlstein, who wrote cogently about economics as a regular Post columnist before moving to academe, writes about the latest financial bubble, commodities. He concludes:
What’s clear from this tale is how little the financial services industry has really changed since the crisis of 2008. The financialization of the economy continues undeterred, creating a bubble in commodities just as it did with houses and office buildings. The industry is still engaged in clever games to circumvent regulation, increase risk and find the cracks between one regulatory agency and another. And when regulators step in to try to restore some sanity to the markets, they inevitably run into a political buzz saw created by the industry and its Republican allies.

Big Finance is water running downhill. You cannot stop it. You may be able to control it but the force is imperative and always carries the potential for serious damage.

Alec MacGillis writes about additional occupations that will further illuminate the monstrous inequities in the American economy and their root causes. Among his targets is Wal-Mart for its success in destroying organized labor. MacGillis reminds the reader about why unions are important:
Harvard labor economist Richard Freeman says that organized labor diminishes income inequality mainly by forcing employers to give back more in compensation to workers that executives otherwise would claim for themselves. In a strong union environment, this dynamic even applies to nonunion firms, which must pay better wages to compete for workers.

But there’s also a broader contribution to inequality in the decline of organized labor in America — the loss of the “countervailing force” that strong unions used to provide in debates with business groups over, say, financial deregulation.

Which is why Wal-Mart and big business fought so relentlessly to destroy that countervailing force.

Yesterday Olympia Fellowship of Reconciliation held a Jobs Not War workshop to explore ways to move toward a peace economy. Among the ideas for action was "shaming" corporations for social irresponsibility. The Occupy Movement has been one form of that shaming for the financial system as a whole. MacGillis has identified some other actors and practices worthy of shame. Pearlstein reminds me of why we need to be always vigilant when vested interests handle large sums of others' money.

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Blogger Lisa said...

Thank you for sharing two important economic stories. (I somehow lost my WaPo online subscription; maybe it is now pay-per-view?)

4:02 PM  

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