The Coming Economic Crash

Book Review:

Thomas Hartman, The Crash of 2016. Twelve, the Hachette Book Group, New York,  2013

If there really had been a crash in 2016, Hartman would have been considered a great genius. As there wasn’t, he ends up with some egg on his face. Further unfortunately for Hartman, some of the problems he points out were already reversed by the Trump administration, specifically tariffs and China-bashing. So his argument for the crash of 2016 is further undermined.

However, a ‘great crash’ within the present time frame would nevertheless redeem him and people would only say that he missed it a few years. The book is a good, exciting, read, but I would have to put it into the category of well-written alarmist narrative rather than serious economic study. Like all of the books written before Piketty (2015 in English) that I have read, they consider 1945-1979 “normal” and everything subsequent as “abnormal.’ I consider this wrong, and so does Piketty. The abnormal period was 1945-1979. Before and after that short “American century,” what happened and is happening is just capitalism.

Hartman puts most of the fault for the disastrous 1979-to-present period on mental states and subjective attitudes rather than historical and economic developments. FDR was a good guy, the “economic royalists” were bad guys with questionable sanity. In fact he calls them psychopaths. The rest of us are guilty of mental lapses, too, as new generations go through a “great forgetting” that causes us to repeat previous economic errors.

As Hartman doesn’t understand the cause of the present economic problems, he doesn’t have a very good handle on solutions, either. Some of his hopes are presently being carried out by Donald J. Trump and are not likely to bring long-term economic benefit to the populace.  He also proposes things that aren’t likely to happen given current trends. After the “crash of 2016” that he predicts, he wants us to reinvigorate democracy through election reform. He wants the labor movement to be encouraged by government. Most of all, he seems to want worker cooperatives to replace the giant corporations as the main economic engines.

How any of that could happen, Hartman doesn’t say.

some notes:

Pg15: Good quote from Grover Cleveland in 1888: “The gulf between employers and the employed is constantly widening, and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor. As we view the achievements of aggregate capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.”

20: The Business plot: General Smedley Butler blew the whistle on a plot to bring an army of 500,000 men into DC to oust FDR. The front man for the businessmen and banksters was Gerald MacGuire.

26: Moyers quote on plutocracy on 2011: “Our democracy is dysfunctional…. We no longer have a government of, by, and for the people– representative democracy. We have government by plutocracy– the rule of the rich for the rich by the rich…. Plutocracy has one purpose, which is to protect wealth.”

Pg34: Powell memo outlined how Republicans could take over. Lewis F Powell Jr in 1971 went to Nixon. Nixon made him Supreme Court Justice. His memo, written to the United States Chamber of Commerce just before his nomination, recommended a militant political action program ranging from the courts to the campuses. He wanted to undo the New Deal.  Powell called on corporate leaders to launch an economic and ideological assault on college and high school campuses, the media, the courts, and Capitol Hill. The objective was simple: the revival of the Royalist-controlled so-called ‘free market’ system. (page 37)

pg40 Roger Ailes prepared the way for Fox news misrepresentation

pg43: lobbying mushroomed. ALEC formed

44: CATO and Heritage foundation come out of Koch Brothers

48: Supreme Court decisions such as Citizens United

52: “Trickle down” economist Milton Friedman advises the fascists in Chile. Terrible economic results

71: He credits FDR and “good “ politics for 1945-1979 good times. Unlike Piketty, who says it was the “shocks” of two world wars.

88: He is pro-tariffs. This is before Trump imposed them

93: Psychopaths. He says that banksters and other filthy rich are basically psychopaths. In fact, a lot of Hartman’s analysis has to do with mental states. He thinks that generations go through a “great forgetting,” for example, that causes us to repeat previous economic errors.

95: Getting sillier. He thinks madness is part of evolution.

96-7: Oligopoly

101: On China, he seems to be agreeing with Trump again. Lots of China bashing here

122: Tillman Act under Theodore Roosevelt stopped corporate electioneering

151: Corporations, especially Railroad Corporations, made many efforts to get legalization in Supreme Court decisions. They always lost until “Citizens United.”

207: He gives recommendations for after the crash of 2016. It’s all reformism of capitalism. He espouses value of co-operatives.

273: Author is described as a talk show host with several important books before this one.

–Gene Lantz

I’m on the “Workers Beat” talk show on radio KNON in Dallas at 9 AM Central Time every Saturday. Podcasts are available under the “events” tab. If you are curious about what I really think, check out my personal web site.