Tag Archives: Wall Street

What is True Progressivism?

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I was talking to my friend on the way back from school when he asked me what I meant with true progressivism. Since the name of my blog is called The Left Progressive, and since the word “progressive” is commonly used and generalized in the modern context thus being diluted by liberal worshippers like The Economist, it would be appropriate for me to manifest my interpretation of the word. The premise of progressivism is to establish pragmatic policies which do not favor particular interest groups based on partisan populism; instead it creates a political program based on necessary laws in order to ensure the welfare and will of the nation and its people. The growth of progressivism was a natural effect of the extension of universal suffrage between 1870-1945, in which the will of the growing proletariat and the sympathy for the workers entered the political arena through the growth of socialist parties and the growth of their influence.

Although my leftist views may be a contradiction to the non-partisan aspect of progressivism, (as progressivism is based on pragmatism not partisan ideology) I truly do believe that socialism will provide for a sustainable economic and social future, and therefore I consider myself a “true progressive”. The fact that capital can flow in and out of nations freely and unrestrictedly creates financial instability as well as economic inequality. The fact that investors can determine staple food prices through speculative investment which causes deadly inflation. And the fact that banks can unlimitedly issue loans causing credit bubbles and dissolution of our financial sytem. All of this is part of an inefficient form of capitalism where the 1% exploits the rest through their capital, creating economic hardships like the one following the financial crash in 2008. Instead I opt for pragmatic solutions to these problems through promoting the implementation of a public banking system, restricting capital flows and creating a more democratic capitalism which is not based on top to down corporatism, but through democratic enterprises where decisions on the allocation and production of resources are made by the producers, not the owners at Wall Street.

Yet true progressivism does not merely address economic issues, in fact the reason for addressing economic issues is for social purposes, because the current elitist mode of production prospers the rich but impoverishes the poor (see sustainability). Healthcare, education and poverty are all social issues which must be solved through progressivism. 2.1 billion people in the world do not have access to essential medicine, (World Health Organization)this is proof of the deficiencies of modern capitalism. Statistics from before 2012 showing the amount of people uninsured in the US clarifies the failure of privatized healthcare even further. As a progressive, I believe that free and public healthcare ensures equality and universal access to treatment which is a human right according to article 25 of the Universal Declaration of Human Rights. Similar trends can be seen with both education and poverty. Privatization of higher level education systems means that only the rich elite will profit from graduating from university as lower members of society are required to take out student loans, which in many cases take lifetimes to pay back. This can be solved through a public higher level education system ensuring social mobility and increased innovation. Poverty is the cause of western imperialism both through traditional and modern means such as the World Bank and the IMF, as well as unequal “free trade” agreements such as NAFTA. If these institutions were abolished it would allow for an end to western protectionism (which is limiting the growth of developing nations) thus creating free and fair trade and therefore reducing poverty.

Progressivism has however been used in inappropriate ways by liberal populists, most recently by the neo-liberal magazine The Economist. In its article “Policy Prescription: True Progressivism” it says “A freer financial sector [in China], with market-driven interest rates, would remove a potent source of income concentration and economic distortion.” They do not understand that the liberalization of financial markets was the prime cause of the financial collapse in 2008 due to the growing credit and housing bubble sponsored by Wall Street. And now they are calling for China to free the financial sector from capital regulations in order to increase capital flows? This is especially ironic when the highly statist economy in China has been achieving on average 10% annual growth rates since the early 1990s. Furthermore, in the subtitle it says, “Bold moves are needed to tackle inequality”. Essentially they are promoting policy-making that increases inequality, not tackling it. This is not progressivism. Progressivism is about being a revisionist and learning from historical mistakes. Instead of admitting that large financial sectors are the cause to economic instability (as they are the cause of speculation driven inflation and the fuel for credit bubbles) they blame low growth on “big government”. It is hypocritical, but a good example of the failure of corporate media.

Progressivism is not about expanding the financial market and allowing capital to squander the economy, while the bankers get richer through the “too big to fail” concept. It is about providing healthcare and education for the general population as well as economic stability and development. This cannot be achieved through the present corporatist model, only through democratizing the economy and granting greater influence over production to the actual producers. We need to re-initiate the progressive surge from 1870-1945 in order to overcome these issues. The problems cannot be solved by implementing Reaganite neo-liberal imperialism through institutions like the IMF and World Bank. I call for true progressivism, a progressivism that will change the world from exploitative to sustainable.

 

 

 

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A Socialist’s Critique of Obama’s Presidency

Official photographic portrait of US President...

Official photographic portrait of US President Barack Obama (born 4 August 1961; assumed office 20 January 2009) (Photo credit: Wikipedia)

Today Barack Obama was announced victor of the extensive and corrupted presidential race over his republican contester Mitt Romney. I am not relieved, sad or filled with joy at this result; in fact my response is indifference. Not because I am nihilist or because I don’t care about the elections, it’s because both candidates are representatives of Wall Street, and both candidates will or would have offered little progressive change to Capitol Hill that is necessary in order to create a more sustainable and developing society in the US. I was listening to a debate between students during lunch regarding Obama’s success during the presidency. The students in favor of Obama’s policy claimed that his presidency has bolstered social programs for the underprivileged and unemployed, when in fact Obama’s presidency and social programs favoring the poor are totally irrelevant; policies favoring the poor are even anti-theses of Obama’s presidency.

The only major bill which did favor the poor and underprivileged was the Affordable Health Care Act which was passed November 7th 2009. This act included an expansion of people eligible to Medicaid programs, increasing benefits to low income Americans for healthcare and prohibiting insurance companies from refusing coverage based on one’s medical history. This bill was more an act of emergency than of solidarity considering that 32 million people were uninsured, which is scandalous for a nation with one of the highest per capita incomes in the world. However claiming that the bill was merely an act of solidarity for the underprivileged is naïve; in fact the biggest earners from the bill were Wall Street having large investments in HMOs and insurance companies. This is because it brought 32 million people in to the market, increasing profits. If the Affordable Health Care Act was a true legislation of solidarity, then the health care system would be nationalized in order to eliminate health care inequality and increase the quality of healthcare for the poor and low income earners. Public health care could be implemented and financed through military spending cuts by 50% (US would still have the largest military expenditure by 300 billion dollars) and increasing taxes for the rich and incorporating the Tobin Tax for Wall Street fat cats. This would be a truly progressive healthcare system where the rich as well as the poor have access to the same level of healthcare and where quality is favored over profits.  Instead Obama is opting for the Wall Street version.

Although the Affordable Health Care Act may seem as an act of solidarity and pragmatism as well as progressivism, the rest of his domestic policy has lacked the same success. His attempt to revive the US from recession through the Stimulus package was successful in retaining economic growth however it did not provide the general restructuring that the economy needed in order to return to the growth before 2008 and reduce unemployment. Through this bill he cut 120 billion dollars’ worth of taxes including income tax credit for middle income earners and low income earners, as well as investments in infrastructure and renewable energy. As much as I believe in relieving tax burden on the poor, the reason why economic recovery has been so slow is because of the household debt which is worth 13 trillion dollars in the US, which is only 2 trillion dollars short of the total economic output. This has serious effects on consumption and is the reason why companies are hoarding 1.3 trillion dollars’ worth of liquid assets, the money is there but businesses are not willing to invest due to the lack of demand from private debt. Only by restructuring debt through buying mortgage loans and eliminating interest rates can consumer confidence increase. Not through measures like Quantative Easing which is only injecting money into Wall Street to serve investors. And especially not through cutting taxes which will only go into savings even though interest rates are at a record low.

Obama’s presidency has done what Wall Street wanted. Preferably the bankers would have liked further extensions to the Bush era tax cuts in order to increase their private wealth; however he has spent billions of dollars on ineffective tax cuts further increasing public debt so that Wall Street can feed off of government bonds, while the federal reserve is buying “toxic” assets from the bankers in order to alleviate and increase their billion dollar profits from mutual funds, hedge funds, increased savings and the bond market. He has however served some of the poor through funding their health insurance, but then again, this has also increased the wealth of Wall Street investors and venture capitalists that get increased returns from their CIGNA investments. All in all the Obama’s first mandate was essentially a mandate serving Wall Street fat cats while doing little to alleviate the increasing private debt of the middle and lower classes. While approaching the “fiscal cliff” in which Bush era tax cuts will be suspended and payroll taxes will rise, as well as huge cuts in public spending, congress and the white house will obviously need to address this issue but not through excessive austerity. The cliff needs to be tackled by progressive tax reform. Considering Obama’s promises of further tax cuts for the middle class and spending cuts, the future looks grim for the US. In any case, I am not looking forward to it.