The economy today

Heather Cox Richardson has written a long piece on the state of the economy now, including the fact that major media are not reporting accurately. Heather is puzzled; Hannah is not surprised.

Yes, we are in a major period of transition, in the midst of a system that was initiated in response to events in 1963/4, not 1984 as Heather thinks. Ronald Reagan did not initiate anything. He just happened to be President when Congress decided to hand management of the economy over to the corporations.

Rather unexpectedly, the civil rights legislation beginning with the fair wage act of 1963 and including voting rights FOIA and lowering the age of majority to 18, which was marketed as serving the interests of African Americans who had been discriminated against and then, almost non-chalantly, to satisfy the bankers, Nixon severed the connection between a real substance, gold, and currency, an immaterial measure of value based on a metric system.

The metric system for measuring distance was invented in 1790 and has still not been formally adopted by the U.S. which clings to distance based on the width of a man’s thumb, the inch. I think this preference for an immediate material reference point is significant. It may account for why the perception of currency as a fiction without intrinsic material value has been so difficult.

USA is a very materialistic culture, not in the sense of seeking to acquire riches, but in the sense of needing to be able to touch and see to perceive reality. Ideas are OK, but there has to be a physical manifestation like a flag or bread and wine in religious ritual. The foundational document of the society, the Constitution, is characteristic in referring to the protection of material property, rather than the properties of persons. Children and women are perceived as owned to secure male hegemony, even though that was not the main intent.

Intent is important, especially in the criminal law, but it is not at the core of perception. Material aspect counts for more. When GHWB dismissed “the vision thing,” it was in the context of expecting the visible to be material. “A thousand points of light” was about as far as he could go.

Similarly, the significance of severing the currency from gold was likely lost on Nixon. The bankers fussed about not enough money to pay increasing wages, among other things, and he decided to cut the strings. Then inflation took off and nobody knew how to rein it in. Price controls got washed away by Watergate. So, for that matter did all of the other significant ’70s changes. Carter’s call for voluntary restraint did not go over well with women, blacks and teens who had just been released from their bonds.

The bankers’ solution of huge interest rates did not work, either. So, Congress decided to ration the currency at the front end by not funding necessary services. Instead, the commercial class would get first dibs on currency from the Treasury and then a portion of what they distributed to the wage earning public would be collected as taxes to promote legislators tenure in office. So, the public was gradually impoverished as the myth of free enterprise was maintained.

How does myth mesh with materialism? That’s a good question for another day. At present we are getting rid of four decades of myth.