To start with, Batra believes Treasury Secretary Henry Paulson (a former Goldman Sachs CEO) was allowed to manipulate the news media, Congress, and the market to direct hundreds of billions of dollars to his former colleagues on Wall Street.

"It's official corruption, what else?" Batra says. "George Bush appoints guys who are not just pro-business but the former CEO of Goldman Sachs." The government's help, he said, should have been directed toward homeowners and lenders, not major borrowers such as Goldman Sachs.

"When Wall Street executives were speculating and raking in money, they wanted no government intervention; when their recklessness misfired, they began to profess an interest in the little guy, especially the small business," Batra writes. "After their earlier speculation contributed to the steep rise in oil and gas costs, affecting you and me, they wanted us to share their losses."

The most recent steps, allegedly aimed at pulling the system out of a tailspin, have Batra less convinced than he was a month ago that Obama will in fact lead the U.S. economy into the promised land.

"There is not that much difference as far as economic policy is concerned between what President-elect Obama is talking about and what President [George] Bush or Hank Paulson did ... in the sense that they are going to create more government debt in the economy and hope that this will solve the problem," Batra said.

Obama's naming of Timothy Geithner as treasury secretary is another sign that the president-elect may not be planning great changes. "Geithner might help the little guy some, but he'll probably continue these same policies," Batra said.

And what about Obama's gargantuan public works program proposal, which harkens back to FDR's New Deal?

Good intention, wrong era, Batra said. "I am not sure the FDR-type of New Deal spending will be very successful in today's economy. The reason is the giant budget and trade deficits the United States has today," he said. "The Bush-Cheney administration has already wasted a trillion dollars on various bailouts, and the deficit will be sky-high as a result."

Adding more debt, along with deregulation started in the Reagan years and exacerbated by Greenspan's monetary policies, is what brought the country to this catastrophic place, Batra says.

"The assumption that the government can borrow and have as much money as it likes and have no consequences; that has never happened. In the end, debt unravels and brings about much more misery than there has to be," he said.

Batra thinks Obama "has his heart in the right place" and adds that it's a benefit that he's not a member of the rich elite. His fear, however, is that, based on who he's bringing on board, "Obama will face a steep learning curve."

Until the nation realizes that it has to get money and power to the lower levels on the socioeconomic ladder, he said, all proposals are merely Band-aids.

While he thinks that some help for the auto industry is needed, he's outraged at the recent bailout debate, seeing the demands in Congress for auto worker wage cuts as a glaring example of class prejudice. "When they were talking about Wall Street, nobody asked for wage cuts," Batra said.

The nation's whole political and socioeconomic culture needs to change, Batra believes - the same kind of overhaul that was so badly needed at the beginning of the Great Depression.

In the 1930s, leaders failed to bail out the banks, rejecting the Keynesian call for government intervention to stabilize the private sector. This time around, leaders are making darned sure they don't forget the banks, but they're misguided in their approach, Batra said.

It's foolish, he said, for Congress to be wondering why the banks aren't using the bailout money to help homeowners and other borrowers. "The banks aren't getting paid back on their earlier loans because people are up to their necks in debt ... and the banks are paying interest [to the government] on this money," Batra said.

One of the few proposals he's liked has come from FDIC chief Sheila Blair, who has been calling for targeted loan flexibility and related assistance to help homeowners who are delinquent in their mortgage payments.

Cutting the interest rate to a historical low won't do it, Batra and others say, because if middle- and low-income Americans are not able right now to even buy Christmas gifts, lower rates aren't going to be enough to help them buy homes.

If the powers that be came to him for advice - and he's not expecting that call - Batra said he'd recommend three initiatives to stimulate the economy:

- He'd increase the minimum wage immediately by $1 per hour and by the same amount for several years until the rate reached $10 an hour. He would also increase the pay for government employees.

- He'd implement some version of Blair's plan to help struggling homeowners.

- And finally, he would use $10 billion or so to spark improvements in the sick auto industry (a fraction of the amounts than have been thrown around lately). Of that, $5 billion would go toward buying 60 percent of General Motors stock. Stock, as well as company control, would be given to workers, who could keep or fire CEOs and chief managers and who would have to be more productive to keep their jobs. The other $5 billion would go toward retirement and pension costs - legacy expenses.

"It's called mass capitalism - capitalism at the level of the masses. It's not socialism, which means government ownership of property. That's what they are doing with banks right now," Batra said.

The plan also would appeal to critics of unions, he said, because it would put force union workers to be more productive to save their jobs.

He sees a very rough year - or three - ahead.

"Most likely what will happen is, three month after the new president takes over, things have not improved and then people will start to ask questions," Batra predicts. "And then maybe they will try the new reforms. But my fear is that they won't try them until 2010 when another election is in order. The elections are what catch the politicians' attention. Until then, they just give all sorts of excuses. They aren't willing to give up their egos."

Despite all that short-term pessimism, he's convinced that positive change is on the way as well. He sees it in his historical economics cycles and the social cycles.

"We are on the verge of a social revolution - it's already started [with Obama's election]. The second part, where the theories are discarded and new ideas take over and new reforms take over - that part has yet to occur, and that will take a few years," he predicted. "After that occurs, the age of acquisitors will be over, and there will be a new age with a totally different attitude toward taxation and the economic system."

The revolution, which he believes could happen in a couple of years or sometime soon after that, should bring in a new chapter of greater economic equality and less poverty and suffering - first in the U.S., then rippling out to the rest of the world, he thinks.

"The U.S. has never been in any other age other than the age of acquisitors. So this will be a new experience for the U.S.," he said.

"America is endowed with incredible natural resources, a lot of productive land, very hard-working people, and a great diversity of people who bring enormous talent to this country, so this phase will pass. Prosperity will make a comeback, and the U.S. will maintain its superiority," he predicted.

Meanwhile, the economic unraveling continues. More than 2 million jobs disappeared in this country in the first 11 months of this year. At press time, an agreement on an auto industry bailout remained out of reach, the debate increasingly punctuated by a growing chorus of skeptics. From Capitol Hill to factories and farms and houses across the country, people are desperate to understand the nature of this beast.

For that answer, listen to Batra, his supporters say.

"Ravi's salves should be listened to with utmost care," said Kanth. "What moves Ravi? Ravi's deity is truth, as he sees it."

Kendall Anderson is a Minneapolis-based journalist who has written for Fort Worth Weekly and The Dallas Morning News. She can be reached at KendallRAnderson@gmail.com

Article reprinted from Fort Worth Weekly, 12/17/2008

Pages: 1 2 3 4