[lbo-talk] The American Prospect 8/30/07: "What's behind the sub-prime disaster?" by Robt. Kuttner

Doug Henwood dhenwood at panix.com
Fri Aug 31 06:26:09 PDT 2007


On Aug 31, 2007, at 2:01 AM, Seth Ackerman wrote:


> Profits were down and the working class was surly in the 30's. But the
> response was quite different.

The whole system was on the verge of collapse in the 1930s; it was just sickly in the 1970s.


> In the early and mid-70's, the Republicans thought that implementing a
> Reaganite agenda would spark a backlash and end in political disaster.
> By 1980, they had changed their minds. Wasn't that because of a change
> of creed?

Dereg was bipartisan. Transport dereg was heavily promoted by Teddy Kennedy (which, as Greg Tarpinian pointed out long ago, before he went over to the Jimmy Hoffa dark side, might have something to do with Joe Kennedy's business history as a merchant). Brookings and AEI published almost indistinguishable articles on dereg. You can even trace some of the intellectual origins of the attacks on regulation to Nader's Raiders.

They were also responding to something real. Inflation hit almost 15% in 1979-80, far higher than in the early and mid-70s. Profitability had declined. The financial markets were a wreck. Sorry to sound like a vulgar Marxist, but creed followed material reality in this case.

Doug



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