Theoretical Theories

In the developed countries a rise in economic instability has been characteristic of an increasingly rightist government, but the backswing has come at the end of the administrations and a new personality, however corrupted in the old administration’s policies, has been elected. The post-1970 era beginning with Ronald Reagan brought increasing inequality that was only interrupted by the Clinton era, while better in that working-class incomes rose, still continued the trend of increasing inequality. However, there was no backlash towards support for government programs to soften the blow of increasing trade and globalization, which should have occurred. The domestic economy is best served by the benefit of consumers and workers. On the contrary, the prosperity and the rhetoric suggesting infinite growth that was common in the 1990s led to further right-wing gains, despite the Democratic control of the presidency. The lure of tax cuts and reduced government, the latter heavily pushed by the Democratic executive, proved too much and ushered in an era of profligacy and militarism. The boom mentality of a growing economy corrupted the normal relations between the upper and middle classes. Normally, the two classes have acted in opposition to one another via the American Dream fantasy: the upper class couldn’t care less about the ‘lesser’ classes, while the middle class remained the bastion of economic security through hard work. With this healthy conflict, the repeal of the estate taxes and capital gains/dividend taxes has been avoided. But it was not so in the early years of the 21st century. The illusion that the middle class’ investments would reap unprecedented gains fueled a belief in the “futurism” theory. I call it futurism because it rests on the belief that “in the future, I will be one of the upper class”, without regards to current circumstance or employment. In the boom years of the late nineties, the promise seemed realizable. With an increasing share of the middle and upper classes, although not the working class and the poor, owning stock and seeing it appreciate rapidly, the belief was that a new era was upon us. What had been conveniently forgotten was the elimination of many defined benefit retirement plans that were replaced with defined contribution plans, which shifted the retirement risks onto the workers and freed up monies otherwise occupied to corporate investments. With the market booming, these corporate investments soared (and the new phenomenon of interest rate and exchange rate derivatives reducing risk for corporations), corporate balance sheets, executive compensation and returns on stock market investment values soared. Regardless of economic position, everyone began to believe they could be a part of it. With a Democratic presidency and a Republican Congress, both sides claimed credit and no one looked seriously at the sustainability of the system. Eventually, the bubble burst and a Republican government (controlling the executive and legislative branches and a large contingent of like-minded members of the judiciary), the policies have not bred a rebirth. However, despite the travails of the current adminisration, the people have not moved away from the governing and towards the opposition. In fact, many have, by statistics not connected with the approval rate of the President, stuck with the party that has overseen the economic non-recovery from the bursting of the stock market bubble in 2000-2001. How such a large proportion of Americans could be misled in believing the boom mentality and how such a large part could stick with the Republican party after their incompetent handling of the post-bust economy is the focus of my thoughts. This is not strictly an American dillimna, but an international one. A related problem to the success of conservative parties in the developed world is how the “21st century socialist” candidates are coming to power (e.g., Chavez in Venezuela, Morales in Bolivia, likely Humala in Peru, Obrador in Mexico and Lula in Brazil) in countries that, while devastated by conservative economic and political policies in the 1980s, could choose political ideologies that have been tried earlier, quite unacceptably, across the world. The reason for this shift, I believe, is that there is no coherent middle way that provides domestic stability with internationalization at the same time. In this process, the multi-lateral international organizations, as well as the domestic governments are at fault. I want to find a way to remedy the domestic and international conundrums in the post-internet bust wold.