History Readings

As the economic slump that began in 2007 persists, the question on everyone’s minds is obvious: Why? Unless we have a better understanding of the causes of the crisis, we can’t implement an effective recovery strategy. And, so far, we have neither.

To understand what needs to be done, we have to understand the economy’s problems before the crisis hit.

America and the world were victims of their own success. Rapid productivity increases in manufacturing had outpaced growth in demand, which meant that manufacturing employment decreased. Labor had to shift to services.

Citigroup had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers — securities that it knew were likely to go bust — and, with the other hand, shorted the same securities — that is, bet millions of dollars that they would go bust.

“The deal became largely worthless within months of its creation,” The Journal added. “As a result, about 15 hedge funds, investment managers and other firms that invested in the deal lost hundreds of millions of dollars, while Citigroup made $160 million in fees and trading profits.”

the U.S. District Court judge overseeing the case demanded that the S.E.C. explain how such serious securities fraud could end with the defendant neither admitting nor denying wrongdoing

in a report released on Thursday by the Bertelsmann Stiftung foundation of Germany entitled “Social Justice in the OECD — How Do the Member States Compare?” It analyzed some metrics of basic fairness and equality among Organization for Economic Co-operation and Development countries and ranked America among the ones at the bottom.

unpeople fall into several categories. There’s, first of all, the indigenous population, either in the territories already held or those that were expected to be conquered soon. It didn’t apply to them. And, of course, it didn’t apply to those who the Constitution declared to be three-fifths human, so therefore unpeople. That latter category was transferred into—theoretically, into the category of people by the 14th Amendment, that—essentially the same wording as the Fifth Amendment in this respect, but now a person was intended to hold of freed slaves. Now that was in theory. In practice, it barely happened. After about 10 years, the category of three-fifths human were returned to the category of unpeople by the divisive criminalization of black life, which essentially restored slavery, maybe something even worse than slavery, actually went on 'til the Second World War. And it's being reinstituted now, past 30 years of severe moral and social regression in the United States.

Well, the 14th Amendment was recognized right away to be problematic. The concept of person was both too narrow and too broad, and the courts went to work to overcome both of those flaws. The concept of person was expanded to include legal fictions, sustained—created and sustained by the state, what’s called corporations, and was also narrowed over the years to exclude undocumented aliens. That goes right up to the present, to recent Supreme Court cases, which make it clear that corporations not only are persons, but they’re persons with rights far beyond those of persons of flesh and blood, so kind of super persons. The mislabeled free trade agreements give them astonishing rights. And, of course, the court just added more

But the crucial need to make sure that the category of unpeople includes those who escaped from the horrors we’ve created in Central America and Mexico, try to get here—those are not persons, they are unpeople. And, of course, it includes any foreigners, especially those accused of terror, which is a concept that has taken a quite an interesting conceptual change, an interesting one, since 1981, when Ronald Reagan came into office and declared the global war on terror,

a bigger source of structural inequity is that many young people never get the skills to compete. They’re just left behind.

Heckman, a Nobel Prize-winning economist at the University of Chicago, has shown that investments in early childhood education pay for themselves. Indeed, he argues that they pay a return of 7 percent or more — better than many investments on Wall Street.

“Schooling after the second grade plays only a minor role in creating or reducing gaps,” Heckman argues in an important article this year in American Educator. “It is imperative to change the way we look at education. We should invest in the foundation of school readiness from birth to age 5.”

the reason we are so vulnerable is that we have no leverage. We don’t save; we overconsume; we don’t plan; and we have not invested enough in infrastructure and education.