Now that 2016 is here, Thom Hartmann's The Crash of 2016: The Plot to Destroy America -- and What We Can Do to Stop It strikes me as a logical Book Review No. 3.
Mr Hartmann has been active in left politics since the days of the Students for a Democratic Society, and his radio show regularly features Vermont's Senator Sanders helping take telephone calls. Thus, the left perspective, with the sainted Franklin D. Roosevelt and the nasty Republicans plotting to hamstring Our President don't come as a surprise.
But the Plot is as much about the failure of people to learn from history and about the fading of previous catastrophic events from public consciousness as the people with living memories of the events pass. Standard Fourth Turning stuff, and Mr Hartmann notes as much.
In his case, though, the plotters are the "economic royalists" and the forgotten history is that of the financial sector taking on ever more risk and trading on ever more irrational exuberance until ... pop goes the bubble. Thus goeth the robust middle class with a lucky few getting richer and many being reduced to paupers.
Perhaps there's something to that history. Capital formation through the expansion of credit with fractional reserve banking makes for more investment, meaning more machinery for workers to work with, although it's at the risk that if enough loans go bad, the banks run out of money. Crash. Afterward, people with memories of a bad crash tend to be more careful with their money, and in their dealings with financial institutions, than those who do not. Thus it takes a few generations until financial instruments that increase the credit expansion multiplier return as people with no memories of the crash see the returns but not necessarily the risk. Because a credit expansion multiplier can tend to infinity if there are ways for lenders to lend all the cash without holding reserves, which is what derivative securities enable, there's the potential for serious troubles when some of those investments go bad.
But Mr Hartmann cherry-picks his history to make his case. The lost America that Worked(TM) of one-income blue-collar homeowners owed itself more to the destruction of industrial capacity in the rest of the world during World War II (an "unproductive" government expenditure in Mr Hartmann's thinking) and to a rough bourgeois discipline instilled by Uncle Sam in all those young working men who survived the war than to the New Deal and strong unions and the Welfare State. As the rest of the world rebuilt, the comparative advantage in routine manufacturing would have left the United States, tariffs and industrial policy or not, and the counterculture took care of the discipline. (In the Rust Belt, there's also a willful anti-intellectualism at work making those states less receptive to state-of-the-art industry and labor relations.)
In Mr Hartmann's political economy, globalization is not a Marshallian improvement that moves three or four people in India or China or Brazil or Poland into the middle class for each Midwesterner rendered redundant as an undesirable exchange. Thus, he's no fan of removing restrictions on trade.
The corker, though, is when he, after making the case for protective tariffs for traditional manufacturing, turns to environmental degradation (did you know the banksters brought you that hundred dollar barrel of oil? Why aren't they using those powers today? I'm also looking at you, Senator Sanders.) He complains that protective tariffs keep Brazilian biofuels out of the United States. Iowa corn farmers and ethanol blenders wouldn't have it any other way. Never let consistency get in the way of a good polemic.
I used the "be careful" warning in the title because among Mr Hartmann's policy reforms is a revision of the United States Constitution to clarify language in the First and Fourteenth Amendments to make clear that legal persons are something other than biological persons, and biological persons alone enjoy citizenship and free speech rights. He's also candid about the usurpation of powers by the Supreme Court beginning with Marbury v. Madison. There are plenty of Tea Party libertarians who would agree, but for different reasons. Would make for an interesting constitutional convention if the libertarians and the non-vanguardist leftists showed up in force.
And, as there will again emerge a generation that knows not financial excess first hand, it will start again in eighty years.
(Cross-posted to 50 Book Challenge.)