I attended a local forum group yesterday at my local library, the topic was “The Economy under a Trump Presidency.” The panel consisted of three men of varying backgrounds, all from the area: an economics professor, a former Tea Party member, and the county Democratic Chair. Of the three two of them touted the idea of de-regulation and a ‘Free Market.’
It struck me as I listened to them that we have to redefine what a free market actually means. We no longer live in the nostalgic time of simple capitalism/consumerism kind of system wherein companies are focused on manufacturing a good and selling it for the best possible price. Ostensibly, this type of free market economy encourages innovation and creativity and allows the ‘invisible hand’ to guide supply and demand.
The problem with that perception is that companies and corporations no longer focus on actual product manufacturing and profits. Today’s financialized economy is now run from the boardroom and only shareholder interests matter. The manufacturing and actual productivity are a side note.
So what does a ‘free market’ mean to a financialized economy? It means deregulation so that markets can be manipulated with sketchy things like derivative trading, which created the housing bubble that sent us into a major recession. It means no accountability with regard to public safety – think EPA rollbacks. It means curbing the federal government’s roll in our system and replacing it with corporate legislation designed only for the benefit of the elite. This is the new ‘free market’ with which we must wrestle.
In an interview with Salon magazine, economist Gerald Epstein discusses a recent paper he published concerning this ‘free market’ and ‘Trumponomics’. Here is his perception:
The one that I’m most familiar with is getting rid of Dodd-Frank, and deregulating finance. We know that this is likely to generate, at least in the short run, a lot of profits to the Goldman Sachs friends of Trump by letting them do whatever they want to do with borrowed money. We’ve seen this picture before, and we know that it’s not going to end well. We know that it could lead to more financial instability and maybe even another economic crisis, and then the government will be placed in the same kind of bind it was before.
Capitalism works, and worked well enough for the US so that we could claim ourselves as the most affluent nation on earth. But we are no longer a capitalist nation, we are a financialized nation and the idea of a ‘free market’ means something entirely different in this world.