Hackery or heresy

Combine the anti-immigration, anti-globalist sentiments of the Trumpies with the full-scale belief in financial capitalism of Trump, Barro, Boskin, Cochrane, Schulz, Taylor, etc. etc. etc. Then, logically, we will get a slight retrenchment of financial capital to within US borders, something that is wished-upon in the rhetoric of Trump’s high-end tax cut and “repatriation” of multinational profits back to the US, etc.

This could, in the very long term, lead to a more nationalized economy in which more jobs are promised. (And lead to the further encouragement of the psychological disease that you must have a paying job, or else be a worthless individual.) But at the same time, within the nationalized economy, automation may continue to throw people out of full-time work, or out-of-work all together (perhaps at an even faster rate in the future, than globalization’s acceleration of joblessness to this date).

If so, then unexpectedly, the steps toward a universal basic income for a new social democracy may be easier to argue in favor of, within the greater cultural conformity of a nationalized discourse. But this won’t be likely.

At the same time, financial capital is still internationalized. (The free-marketers won’t stop that!) And right now, the money that is being called back to US shores is not causing any acceleration of real business investment, it is going into gambling in the stock market run. (The Summers-Krugman-DeLong diagnosis that the economic problem of the last few decades is a secular (i.e. not a business cycle) inequality-exacerbating “demand shortfall”, not a problem with the supply-side, remains valid.)

Further, all of that big money isn’t likely to want to STAY on US shores. Why? Because the US is running a big budget deficit (made bigger by the tax cuts) which must eventually be paid for. Taxes are going to go back up. Any new infrastructure initiative must be paid for, likewise. So financial capital will go right back offshore again, before getting stuck with the big bill. This is already suggested in the fact that the US is running higher interest rates BUT a weaker dollar. Capital does not seem to want to stay in the US.

Worse, this situation is being set-up at the historical moment that China wants a larger share of world trade, and is thanking the emergence of Trump for sending much more of the world into consideration of joining a Chinese trade pact. (Plenty of technology transfer, no questions about human rights asked.) If they join, there will be developing countries with a higher ROI for investors than the ROI in the closed-down US. This will, in turn, also penalize the US in relative living standards.

Finally this possible whole scenario would predict a stronger resurgence of the fascist tendency in the US, after the higher interest rates in obeisance to the logic of money cause austerity, hardship and more resentment to the rest of the world.

The good thing is that most people are waking up to the realization that, after everything is said and done, Trump is a Gigantic Waste of Time. The insiders’ game seems to be to let him run around in circles, thinking he’s getting something done, after he sends off his closet tweets in the morning. All democracies make mistakes, and this one ought to be gone soon enough. All long-term deals will be on hold.

What’s striking is the extent to which the piece has been adjusted to fit the Republican party’s new found lack of concern about deficits, while supporting the party’s continued attack on “entitlements”.

This is just not a reasonable description of the piece. One of the main points of the piece is to raise the alarm about “the Republican party’s new found lack of concern about deficits.” Then, rather than “supporting” the “party’s continued attack” on entitlements, the other main point of the piece is to oppose the party’s continued lack of an attack on entitlements.

Of course there are many other reasons why the piece is mediocre. It doesn’t put its points into context – it doesn’t point out that the Republicans have been, for some time now, the Fiscally Irresponsible Party while the Democrats have been the Fiscally Responsible Party (or at least the Fiscally More Responsible Party). It doesn’t point out, directly anyway, that the recent tax “cuts” (better termed as “shifts”) were a bad idea. It’s utterly spineless. And in a piece suggesting a return to fiscal responsibility, the discussion of military spending (JQ’s one good point) is particularly spineless.

The idea that there’s something new here about the relationship between the rhetoric of Republican-leaning economists and the ascent of Trump is silly. The Republican-leaning economists have been trapped in this same box for decades now. This is really the key paragraph:

Taxes alone cannot solve our budget problem. Funding programs as they are currently structured will require high taxes for all income levels, taxes that would sharply reduce economic opportunity and growth, which in turn will make funding entitlements that much harder.

This is a reasonable point to make, if you’re a Republican-leaning economist, but obviously they are pissing into the wind here. The Republicans haven’t taken this advice in the past and not likely to take it now – they’ve been doing just fine (electorally) for some time by cutting taxes while not doing anything about spending. They’ll just wait for the next Democratic President or Congress to clean up after them – they may not be very good at economics, but they’re very good at game theory.

“Heresy” strikes just the right note, as there’s a providentialism lurking deep in the weave of economics, deriving, I take it, from the theodicy inferred from the Newtonian clockwork. What looks like chicanery is as well an act of faith. And, like the autos-da-fé of the Inquisition, intended as an act of mercy. (Seriously.)

That “conservatism” has assumed this form — as opposed, say, to Juvenalian satire or Ciceronian phillipic — is a measure of how much economics has supplanted politics in our ostensibly “political” discussions. In the terms of this article by Jessica Kimpell, “commerce” has decisively enthralled us. A kind of Circe metamorphosing citizens into entrepreneurs, etc.

In fact, just try to say “citizen” without sounding preciously anachronistic. And consider, too, that whoever it is who will next be elected to whatever office probably feels the same way.

John Quiggin, seeing you describe people as “hacks,” “marginal figures,” etc. here and in many of your other posts reminds me of a saying about a mote and a beam. You know how to write in a way that sheds more light and less heat, as is evident from some of your academic work. Emotion-laden invective is a waste both of your time and that of your readers.

I think this is the central issue of the economic article (published in the Washington Post, which is owned by a plutocrat, so presumably it reflects his interests):

“Congress must reform and restrain the growth of entitlement programs and adopt further pro-growth tax and regulatory policies”

They make it clear that this means “Congress must spend less on the poor and must also take less government revenue from the rich, while refraining from preventing manufacturers from polluting the environment and manufacturing shoddy products”.

This means, economically speaking, that they want to increase inequality in the United States, and reduce the demand for consumer goods, while making life for the average person more miserable and making U.S. goods less attractive to exporters. It would seem that this is a recipe for economic decline packaged as a way of promoting economic growth by reducing the deficit (the nostrums they offer will not address the deficit).

I think it’s fair to call this hackery, but it is fairly obviously hackery in the interests of the rich and powerful, and therefore it is inevitable so long as the public space is controlled by the rich and powerful (and so long as the sole concern of the rich and powerful is to become more rich and powerful at the expense of everyone else).

(And if I’ve made a complete hash of everything, please blame my Econ 1 professor, a certain John Taylor.)

Pseudonym; while there may be some marginal flaws in your comment, the essence of it is entirely correct: “entitlement reform” is an effort to protect the rich by shifting the economic burdens of the future onto the middle-class, working-class and the poor.

sean s.

It doesn’t seem to have been noted that there has been a massive increase in productivity in the Western world, since 1980 — far and away more than enough to pay for all these “entitlements”, but that increase has gone, by and large, to the extremely wealthy.

I recall reading that if Social Security took in the same percentage of -income- (in toto) that it did many decades ago, things would be much, much better. But of course, all of the increase in income has gone to those who earn far in excess of the cap in FICA taxes — so they pay no more, and that income goes untaxed.

The idea that there isn’t enough money to pay for the decent care of all of us in America is balderdash to anybody who’s done the math on the actual income of our country.

CDT, I don’t think this is entirely true. In South Africa, for instance, we have Patrick Bond, whose heart is possibly in the right place but who has been wrong about pretty much every local and global political event for the last twenty years, and he’s now holding down two fully-funded professorships.

I think that provided a “left-wing hack” is willing to consistently generate stuff which serves the interests of the rich and powerful, that hack will probably receive a fair amount of cash. Of course the problem comes when the left-wing hack insists on occasionally promoting an actual left-wing agenda; then he or she becomes a problem. (Again, in South Africa, this happened to Dale McKinley when he insisted on promoting populist campaigns which might have threatened the rich and powerful, so he lost his gig at the Mail and Guardian newspaper; he subsequently reformed and became an energetic supporter of big business via the “Right2Know” NGO which is backed by big media interests.)

@1 At this point, it’s not even clear if they are selfish because it’s not clear they will directly benefit from the policies they promote.

Their stated ends and their possible thwarting of the means to those ends suggests that we have to look to their collective psychology to explain their self-defeating choices and/or self-deception.

Your guess is as good as mine but I’d love it if somebody would do an anthropological study on conservative economists.

@ 18 and 21:

I confess to complete ignorance with regard to political pundits not published in the U.S. or U.K. Labels, of course, are imprecise, but I would put the Great Moustache of Understanding in the center right; he combines neoliberal economics with global cheerleading and genteel militarism. (Remember “suck on this”? He certainly is consistently wrong, however, just like Bill Kristol and many others. Perhaps one reason we can’t think of a consistently wrong left-wing hack is that such views get negligible exposure, at least in the U.S. Nicholas Kristoff at the Times is both liberal and a hack, but he doesn’t really make predictions so much as write poverty porn.

Reuters is reporting this morning that the conservative clowns who run the U.S. Congress are going to vote on their ol’ favorite: a “balanced budget” amendment to the Constitution. Constitutional amendments need a 2/3rds vote in both House & Senate and then 3/4 of state legislatures to approve, so they know that this is going nowhere fast. It’s an election-season Hail Mary pass, a purely symbolic move to convince conservative voters that, “Golly, we wouldn’t be capitulating to the Democrats and running up these deficits, if only it were written into the Constitution that we can’t!”

In case you are keeping the anthropological score, the tribe’s false belief is that 1. money must be kept scarce, but then they 2. contradict their own false belief by borrowing like there’s no tomorrow, and then, they 3. come up with a phony diversion to confuse the issue further: “We need to stop this by extraordinary measures, once and for all!”

It’s not a psychological double bind, it’s a triple bind.

It’s stupid, but a lot of their voters wouldn’t know how to boil water to make spaghetti, so it might work.

So this is another way for the deficit fear-mongers to divert attention from their own culpability: blame it on the Democrats, and solve it by changing the Constitution. Watch Fox News & Sinclair go big on the message. So here’s the new (old) conservative propaganda; let’s see if the aforementioned conservative “economists” and “intellectuals” begin to parrot it.

Gordon @25, “Money won’t take care of you when you’re old, people will.”

That’s very simplistic. Money is essential to the smooth operation of the economy, which enables people to do what they need or want to do, including taking care of the old.

If Pseudonym made any error @ 11 it’s that we don’t need people saving money, we want people creating wealth and spending money. It’s spending that keeps the economy going and creating jobs. A healthy economy supports jobs like caring for the old.

To borrow a line from Neal Stephenson; money is not wealth, money is the corpse of wealth. Spending is what creates jobs.

sean s.

It may be hackery but it is well paid hackery

https://www.scribd.com/document/257705494/Tobacco-Economists-Network

Chet Murthy is right. The same is true of all developed countries. Jeremy Corbyn gets monstered by the media as their owners suspect he also thinks they should pay a fair share.

@MFB: published in the Washington Post, which is owned by a plutocrat, so presumably it reflects his interests

Are you suggesting that the creator of Amazon doesn’t want poor people to be able to buy as much crap as possible from his website? Circle of life, dude.

MFB: “Faustusnotes, good question. I think the answer lies in the way in which some left-wingers a) declare that people less left-wing than themselves are (by that definition) evil, odious and need to be overthrown, and then b) align themselves with right-wing forces in order to bring about that overthrow.”

Well, that sounds tricky, but can we name a left-wing hack being well-payed to do this? I can’t, and the idea that the establishment would pay well for it seems unlikely.

That’s why we need a basic income for self-driving cars, so the cars can buy stuff on Amazon after their drivers passengers no longer have anywhere to go but opioid addiction.

Many times I wonder what would happen if somehow the physicists discover a source of Zero Point Energy or similar macguffin (like in Asimov’s “The Gods Themselves”), and we have to deal with the social and political consequences of a world in which effectively everything is free, or ought to be, and no one needs to work for anything, and all needs can be met and maybe also all wants as well.

Then I realise that this is what has happened, in slow motion, over the last 250 or so years of industrialism and mechanization. From the perspective of 1700 we can do amazing wonders beyond the power of Man with none of human labour it would have required. And we can’t cope with the consequences, even though it didn’t happen overnight.

So MFB, you mean someone like Glenn Greenwald?

This post’s title has gone and turned itself into an earworm in my head.

A duet between Stevie Wonder and Paul McCartney

There are no ‘small government conservatives.’ There never have been, and there never could be. It’s a contradiction in terms. As I argued in a previous thread most (not all) conservative intellectuals have thrown in their lot with ‘laissez-faire’ capitalism as it’s the surest way to ensure the hierarchical, ‘pyramid shaped’ society that they want (previous pro-hierarchical philosophies, like fascism, turned out to be politically unstable, and the ‘straight forward’ reactionary position of, e.g. Chesterbelloc (‘back to the 12th century!’) turned out to be politically impracticable).

Now: it’s an interesting fact that since Capitalism really got started in the 15th century, it’s always had an imperial global hegemon, a ‘top dog’ to impose order on the chaos of capitalism. Perhaps capitalism would be possible without this. But it’s interesting that it’s never been tried. First it was the Portugese. Then the Spanish. Then the Dutch…and so on…until the British took over as the dominant guarantor, so to speak, of the free market system in the 19th century, which continued until about 1948, when the American Empire took over that role.

Now, as I said, it’s possible that capitalism could survive without such a global hegemon. But unlikely. It’s more likely that capitalism needs military power to back it up, to ensure that the masses don’t get daft ideas about socialism, egalitarianism, and equality, or get equally silly ideas about trade union rights and environmental legislation, all of which might impede the capitalists in their God given quest to make more profits for themselves.

So you need an Empire to stop the whole thing from collapsing. And an Empire is, by definition, Big Government. Indeed the biggest. You need ‘intelligence’ agencies to spy on the citizenry, a world-terrifying military to put down anti-imperial revolts, a gigantic financial system ultimately backed by the State to ensure financial stability (and the hegemony of the dominant imperial power) and so on.

It’s true that before WW2 there were conservative intellectuals who saw this and attempted the difficult (or, I would say, impossible) ‘juggling act’ of being pro-capitalist and anti-Empire. But this tradition is dying now (Ron Paul is an old man, and he has no political heirs), possibly due to its essential incoherence.

There is no senior/powerful politician, on any side of the political spectrum, in the US, who wants the end of the American Empire.* Almost literally all American politicians explicitly or (on the ‘Democratic’ side) implicitly give support to American Exceptionalism and (a watered down form of) Manifest Destiny, shorn of its most blatantly racist tenets. If you are in favour of the American Empire you are by definition in favour of Big Government. End of story.

*Ron Paul is the only possible exception, and even then, one might quibble about how much he actually believes what he says. In any case, he has no power, and nor could he ever attain any power, in the current set up of the American political system. Also: Paul was born in 1935.