American capitalism is broken, and little that newly-empowered Republicans and surviving Democrats offer is likely to fix it.
American prosperity was built on technology, fair competition and sound finance.
From Thomas Edison to Steve Jobs, America was repeatedly transformed by inventors coming up with new products, raising capital and earning fortunes in the marketplace.
In established lines, intense competition compelled American enterprises to make and move goods more effectively than businesses abroad. When American companies came up short, foreign competitors like Toyota came here, and domestic businesses like Ford reinvented themselves to re-challenge foreign rivals.
In recent decades, the process was enhanced by a U.S. push for global free trade and intensified by domestic deregulation. Sadly, this has resulted in a wide open U.S. market abused by foreign competitors, U.S. multinationals and Wall Street financiers.
China, Japan and others are free to sell whatever they like in the United States, while they rig their currencies to subsidize exports, erect tariff and nontariff barriers to U.S. sales in their markets, and require American companies to give away technology to make and sell products in their markets.
American companies like Caterpillar, GM and GE relocate production to China and other places, become cooped by their foreign hosts, and then lobby against U.S. government policies that would redress these competitive imbalances.
The result is a huge U.S. trade deficit that stifles demand for American made goods, suffocates jobs creation and smothers the economic recovery.
At home, New York financial houses have cynically abused deregulation. Five or six big banks, with help from government money, have monopolized deposits enough to dictate CD rates and extract big profits on corporate loans.
Only big multinationals have the sophistication and leverage to do business with banking behemoths.
Wall Street has cut off capital to the 8,000 regional banks that service small and medium sized businesses that create most jobs in the United States, and these Gotham City giants pay their executives glutinous bonuses for ripping off monopoly profits
Now, about 3,000 regional banks face extinction, and ordinary Americans can only borrow money at government run Fannie Mae and Freddie Mac or at extortionist rates on big bank controlled credit cards.
Enter the Republicans with their Pledge to America. Nowhere does it explain how to fix the trade with China and other mercantilists, or the banks. And deregulation and tax cuts will only make the wealthy on Wall Street wealthier.
President Obama's push for green industries won't fix much. Batteries for electric cars, solar panels and windmills simply can't replace most of the jobs lost to imports, and foreign competitors in government protected markets are working on the same ideas.
Redistributing income, a favorite Democratic ruse, through health-care subsidies and higher taxes only destroys more jobs. It is reminiscent of Roman emperors giving away grain to restive citizens.
Americans must address the world as they find it, and not as they wish it would be.
The World Trade Organization and many other institutions of global governance have failed and do not serve U.S. interests.
It is not isolationist to say the U.S. government should start looking out for Americans likeBeijing and other governments look out for their citizens. It's high time to require many products patented and sold in the United States be made here.
The adventurers on Wall Street don't need to be taxed more--they need their toys taken away. Once again, separate the banks from the Wall Street casinos and bust up the biggest banks to restore competition.
Don't hold your breath. Both parties are too focused on 2012 to do any heavy lifting.
Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission.