Sunday, July 10, 2011

The Deregulation Deindustrialization Connection and How the Middle Class Got Screwed.

The system of global capitalism fundamentally changed in the 1970s. From the end of the second world war until 1973, there were relatively few financial crisis because finance was tightly regulated. Banking was confined to the states; therefore, regulated on a state by state basis.

In the 1960s, there were three local banks that dominated the state of Maryland, and this was the case across the nation until the consolidation of banks across state lines began, and then, shortly after, across international lines. Thus, the deregulation of financial institutions began.

However, the easy transference of funds that made finance capital so fluid, enabling it to chase the highest return, also permitted industry and production to go off shore very easily. As a result, the flow of production capacity to China, the Philippines, etc, which, of course, effected the labor force in more ways than one: lack of jobs and wage repression, and eventually, the deindustrialization of America.

Initially, the deregulation process impacted the African American community. The elimination of so many occupations that used to lift minorities out of poverty led to the marginalization and disenfranchisement of black males, in particular. The criminal justice system gladly stepped in and scooped them up. Then the "war on drugs" sealed the deal, skyrocketing the black inmate population. Between 1986 and 1997, the number of blacks incarcerated for drug offenses alone increased by 799%! The total incarceration rate for black males in 1980 was 3,544 versus 528 for white males. In 1990 one in four black males, under 30, was under the control of the criminal justice system, and in 1995 the percentage had increased to one-third.

Fast forward to 2008, and although the black population continues to bear the brunt of the financial crisis, as usual, people of all races, including the white middle-class population, cannot escape its brutality this time.

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