John Edwards is Correct

Former senator John Edwards is correct when he said, ”There’s a wall around Washington and we need to take it down. The American people are on the outside. And on the other side, on the inside, are the powerful, the well-connected and the very wealthy.”  Mr. Edwards spoke about the corporate control of our nation in the last Iowa debate. He was talking about the well connected in Washington D.C. as well as the wealthy.

Look at just the issue of auto and truck fuel economy. It has taken 32 years to increase those standards.  The new standards are not effective until 2020.  That is 48 years since oil embargo in the 1973-74.  The automakers and oil companies are the two groups that have blocked this legislation.  Of course the congressmen and senators from Michigan supported the status quo.  The consequence of this situation is that the U. S. is still importing 80% of its oil from the Middle East at high prices and the environment is being affected too.

Another issue is the current scandal on Wall Street over home loans in the secondary market.  That is a large group of home loans given to people who could not afford a conventional loan.  Wall Street brokers packaged those loans and sold collateralized debt obligations (CDOs) to money market funds.  These CDOs were offered with money back guarantees.  This issue was discussed in detail in the December 10, 2007 issue of  BusinessWeek <http://www.businessweek.com/magazine/content/07_50/b4062026774092.htm>   .  This is another great example of protection of the wealthy over protection of the average American but packaged as protection for the sloppy home buyers.

The Federal Reserve under the guidance of Alan Greenspan, a Wall Street maven and a conservative economist moved the markets to protect and enhance the wealth of his brethren.  Easy money lead to growing wealth for the wealthy, not the average American.  Mr. Greenspan also devised the idea of “core inflation”.  That is inflation that ignores the cost of volatile items like food and energy.  The idea was to convince us less wise Americans that inflation really is at a very low level.  Recent article articles in both BusinessWeek and Newsweek point out the foolishness of this idea.

When I graduated from CSUN (California State University, Northridge) in 1962 there were over 30 million Americans in labor unions.  Today there are approximately 16 million Americans in labor unions. Manufacturing was a significant part of our employment.  Today almost every product we buy was made in another country.  The leading exporter to the U. S. is China.  Actually the number of people in manufacturing has remained almost the same as it was in 1947.  From Economists View http://economistsview.typepad.com/economistsview/2007/02/manufacturing_e.html consider that “Because the population and, hence, the labor force has grown, the share of manufacturing employment (to total employment) has been steadily falling since the Korean War. Approximately one in every three workers was employed in manufacturing after the Second World War; today, that number is about one in ten.”  Are corporations impacted by this situation?  Of course, their profits are higher than ever because the labor costs are significantly lower.

It is unlikely that John Edwards will be the next president. He really would be an agent for change.