foolsguinea: (Default)

This was kind of interesting. Krugman on a British chat show.
foolsguinea: (Default)
So, how would you describe your political beliefs?

I'm a communist.

You mean, you're a Marxist, you subscribe to his theory of economic history.

No, no, I don't really believe in that. Not as such.

You mean you're a state socialist?

No, not a Stalinist.

You're a Maoist, Trotskyist, what?

No, I'm not a Stalinist, Trotskyist, Maoist, or even much of a Leninist. I'm not even a proper Marxist.

So, what kind of "communist" are you?

I'm a Milton Friedman commnunist.

Do you begin to get it now? I live in a country where I'm called a Leninist for supporting a progressive income tax, where I'm called a Nazi for believing in socialized medicine! Where if I say, like Harry Truman, that poor voters should vote their interests, because the rich bitches certainly are--

Now, now, watch your language. Don't get so excited. It's all right.

--if I say you should vote your interests, I'm told, "Son, you just don't understand." And what is supposed to be wrong with being upset about all this anyway? Are you on drugs?

Are you?

Are you doped up right now? Why are you so insistently calm? Why are you calm as they rob the small landholder in this country? Are they giving you your cut?

If I speak out against the fleecing of America by corrupt politicians and the special interests who fund them, I'm called anti-American. I believe with Milton goddamn Friedman that instead of just giving people food stamps and free schools, we should give them money. Money to be able to buy in, to own land, to raise themselves up, to become the equal of their "betters." And for that, I'm not called a communist, nor a Nazi, no, I'm called crazy. So fine, I'm a crazy Nazi Commie. That's my political affiliation. That's what a Harry Truman Democrat is in today's America.

We've made such a religion out of laissez-faire free market economics, that it's not enough to be free-marketers by our parents' standards! No, that would be the sin of moderation! No, we have to keep moving further and further into the right, past the right and into the crazy! Shut down the government agency that pays my salary! Why not! Rob the poor to give kickbacks to the rich! Abandon every useful state institution built by liberal and conservative alike, and by implication call your own grandparents Communists, foreign to "America," and traitors!

Wait, I don't understand. Is that what you're advocating, or--?

Idiot! It is the false religion of nouveau right-wingism, ersatz conservatism, that destroys the petit-bourgeois, the small landholder, in this country.

Well. A lot of people's grandparents really did believe in conservatism, and hate the government. People kept moving west to get away from the government where they were. It's a libertarian country.

Poppycock! They were trying to get to where they could own land, trying to get away from local private elites. Sure, a few cranks hated all authority, but they were freaks! They didn't build this country, or establish its institutions: its state colleges, its research institutes for agriculture and medicine, its public schools, all the things that made us a rich, powerful country! Did Wall Street build those? Did Wall Street even build the military and police that protect it now?

Well, as creators of wealth...


Wall Street creates wealth.

No it doesn't. It invests in things so that money can be funneled off to investors. It doesn't do the real work of technological development, and the funding it actually provides to the actual inventors and manufacturers and service industries could be extracted from the wealthy in taxes and paid as grants to people who want to start businesses. Less wealth would flow to the upper crust, and that would be good for building a broader "ownership society" and a broader base of demand. Private investment would still exist, but alongside redistribution. And eventually beneficiaries of redistribution could invest themselves.

I don't know. I don't see how that works.

Pfft! Anyway, yes, some of your grandparents would have considered themselves conservative, and some more would be somewhat socially conservative now. But that doesn't mean they would sign on to the economic program of radical laissez-faire!

You really like those foreign words.

You speak English. Are you in England?

Just because someone would oppose transgender equality today doesn't mean they weren't economically progressive in their own time! You want to be a social traditionalist? Fine! But don't let that be an excuse for supporting people who are trying to rob you of opportunity!

Anyway, yeah, I'm a Harry Truman Democrat. But these days, you can call me...



I wrote this a few days ago and put it up on "private." Showing it now because I see where Paul Krugman (himself a moderate who somehow became the "intellectual voice of the left") pointed out that Milton Friedman would be considered a left-socialist in the present climate. Maybe even in Europe, though Krugman didn't say that explicitly.
foolsguinea: (Default)
Here’s one reason we’re stuck in slow growth mode: the budget crunch among state and local governments.

The figure shows the yearly percentage point contribution to or subtraction from real GDP growth from the state and local sectors since the late 1980s. The trend bounces around but the recent cliff dive is evident. It’s also why we keep losing jobs in these sectors month after month.

graph )
Source: BEA

Unlike the feds, states have to balance their budgets every year, which means they either raise taxes or cut services. They haven’t done much on the tax side, so they’ve been laying off teachers, cops, maintenance workers; practically every month over the past few years we’ve been adding private sector jobs and shedding public sector jobs.

In a very real sense, what you have here is a microcosm of austerity measures at work in cities and towns across the country. Moreover, this drag on growth is avoidable. One of the most successful parts of the Recovery Act was state fiscal relief, as those dollars went directly to preserving state and local jobs. The American Jobs Act proposed $35 billion to build on that progress, resources that would have prevented hundreds of thousands of ongoing layoffs. But it languishes in the dysfunctional Congress and we’re left with the fiscal drag you see in the figure.

Update: A commenter notes that this figure is a good argument against a balanced budget amendment. Amen. As I wrote around the time of that debate–and this bad idea hasn’t gone away–think of a recession as all the states piled in a boat together along with the federal government and the boat is taking on water. There’s really only one institution in that boat with bilge pump and that’s the feds. A BBA takes the pump away…then the boat sinks…
foolsguinea: (Default)
Cyclical crises are on-going episodes in the capitalist system, occurring and about once a decade and usually last 18 months to two years. There were world recessions in the early 1980s, the early 1990s, and the early 21st century.

Structural crises are deeper; their resolution requires a fundamental restructuring of the system. Earlier world structural crises of the 1890s, the 1930s and the 1970s were resolved through a reorganisation of the system that produced new models of capitalism. "Resolved" does not mean that the problems faced by a majority of humanity under capitalism were resolved but that the reorganisation of the capitalist system in each case overcame the constraints to a resumption of capital accumulation on a world scale. The crisis of the 1890s was resolved in the cores of world capitalism through the export of capital and a new round of imperialist expansion. The Great Depression of the 1930s was resolved through the turn to variants of social democracy in both the North and the South - welfare, populist, or developmentalist capitalism that involved redistribution, the creation of public sectors, and state regulation of the market.

To understand the current conjuncture we need to go back to the 1970s. The globalisation stage of world capitalism we are now in itself evolved out the response of distinct agents to these previous episodes of crisis, in particular, to the 1970s crisis of social democracy, or more technically stated, of Fordism-Keynesianism, or of redistributive capitalism. In the wake of that crisis capital went global as a strategy of the emergent Transnational Capitalist Class and its political representatives to reconstitute its class power by breaking free of nation-state constraints to accumulation. These constraints - the so-called "class compromise" - had been imposed on capital through decades of mass struggles around the world by nationally-contained popular and working classes. During the 1980s and 1990s, however, globally-oriented elites captured state power in most countries around the world and utilised that power to push capitalist globalisation through the neo-liberal model.

Globalisation and neo-liberal policies opened up vast new opportunities for transnational accumulation in the 1980s and 1990s. The revolution in computer and information technology and other technological advances helped emergent transnational capital to achieve major gains in productivity and to restructure, "flexibilise," and shed labour worldwide. This, in turn, undercut wages and the social wage and facilitated a transfer of income to capital and to high consumption sectors around the world that provided new market segments fuelling growth. In sum, globalisation made possible a major extensive and intensive expansion of the system and unleashed a frenzied new round of accumulation worldwide that offset the 1970s crisis of declining profits and investment opportunities.

It's a different world than where you come from.
foolsguinea: (Default)

The contention is that Greece and Portugal weren't causes of the economic crisis, but victims. And some of the conditions that led to their massive debt were beneficial to the Eurozone core states and in fact encouraged by same. So stop blaming the victim, & bail out your business partner who has made you wealthy.

Interesting take on the history of macroeconomics. It's short, references some arcana without being arcane itself.

In fact, it looks a lot like what Keynes described, and old-Keynesian models work very well, thank you, both at explaining it and in making predictions about such things as interest rates and the effects of fiscal austerity. But the descendants of the Lucas project know that Keynes was wrong — it’s what their teachers and their teachers’ teachers have been saying all these years. They cannot accept anything resembling a Keynesian explanation without devaluing everything they’ve done with their intellectual lives.

So it must be Obama’s fault!
foolsguinea: (tragedy)
Look, I'm grateful for, oh, one of my college classes: Macroeconomics.

OK, I learned some cool stuff in English Comp (weirdly, not how to write, so much as that most everyone else doesn't know how to write either) & Geopolitik (which I flunked). But yeah, I'm grateful to those classes, but perhaps especially to Macro.

So when I tell you that college (at least in the USA) is kind of a scam, understand that I mean economically. If society really wanted you to get this education, they could be paying for it, the same as primary & secondary education. (That said, maybe you have a good reason, & society is just giving you a hard time when you're trying to learn something it's actually important for you to learn. If so, fine.)
If you have (or are currently attending college in pursuit of) an engineering, law, computer science, medical or any other kind of degree that qualifies you to do something with a tangible effect on the world, this is not the column for you. You're not going to get anything out of it. Well, maybe some well-earned Schadenfreude at the expense of all the little grasshoppers who didn't till for winter, but aren't you above all that? Why don't you go somewhere and understand some math, asshole.
For the rest of you, I need to tell you something, and it's probably going to hurt: All that talk about how a higher education improves you as a human being, instantly launches a stellar career and hurls you screaming into the transcendental nirvana of financial stability -- yeah, that was all bullshit. Unless you're going for a professional degree, you really should not go to college.


I'm not saying you won't get anything out of college: While I was there, I certainly felt like I learned and grew as a person...for about the first year and a half. I think everybody should go to a community college for a bit. Everybody needs some of those early mandatory classes and social experiences, assuming they didn't already get them in high school. You need to take at least up to Calculus in math, so you can immediately forget it, but insist to the IT guys that you totally understood it at one point in your life. You need the introductory writing classes, at least up until argumentative essays, so you can win fights on the internet. And you need all of the general survey history courses, with a few psychology and philosophy courses thrown in on the side, so you can see how fucked up our species is, and come up with some pretentious bullshit reasons as to why that might be. And by all means, if you have the money, audit any class that sounds interesting, but keep in mind that this is the information age: You can get an Ivy League education for nothing. All that knowledge is free now. If you're paying, you're paying for paper.

Yes, there is a link in that quote. Let's repeat it:

And another link from that Cracked article:
Since 1978, the price of tuition at US colleges has increased over 900 percent, 650 points above inflation. To put that number in perspective, housing prices, the bubble that nearly burst the US economy, then the global one, increased only fifty points above the Consumer Price Index during those years. But while college applicants’ faith in the value of higher education has only increased, employers’ has declined. According to Richard Rothstein at The Economic Policy Institute, wages for college-educated workers outside of the inflated finance industry have stagnated or diminished. Unemployment has hit recent graduates especially hard, nearly doubling in the post-2007 recession. The result is that the most indebted generation in history is without the dependable jobs it needs to escape debt.

I think college students should strike until they're getting paid. But of course we aren't teaching you economics in high school, you poor saps.

So, sure, go to college, take Macroeconomics, and maybe some class that you were bad at in high school only because your teacher was a jerk or you were distracted by whatever--you might like it after all. Arguably, you should do this after a year off instead of right after high school. (One year off. Maybe two. Longer than that is kind of much unless you're doing your national service first or something. [Or in my case, working through some massive mental health stuff; I did a lot better in biology stuff after being out of school for several years & working through some of my phobias.])

Then walk out and tell them to shove it, and if they want you to get a degree they can pay for it. Don't be they're profit center, be a cost. Being a cost: that means they're paying you money.

Of course, to do this effectively, you may need to organize, which means understanding collective negotiation power, which is why...

I've said for years that we need to teach kids macroeconomics (on a basic level, supply-demand stuff, not all the calculus a Doctor of Econ has to know obviously) in junior high. That's early enough to give you time (before the second time you vote in a Congressional election) to begin to recover from all the fiscal-conservative banana oil that Republicans will try to sneak into the curriculum. But mostly, it will give you some of the language and concepts to later understand that you're being taken by the present college system, not to mention the present so-called supply-side/"Austrian"/Reaganite tax structure. I mean, I didn't learn all that in freshman Macro, but I learned enough of the basic rules to later be able to see the landscape that was an utter mystery to me before.

Or, you know, try reading some econ stuff on your own. Beyond the basic stuff, I like Paul Krugman's columns. Although he's working from an expert level, he tries to put things in terms a layman may understand.

P.S.: Also, Austrian economics is considered non-mainstream for a reason. I'm no expert, but "Austrian economists" remind me of the sort of bizarre fear-of-reality thinking that plagued me when I was a high-school dropout & didn't want to learn things (& thus had no business being in school). So yeah, don't take them too seriously.
foolsguinea: (Default)

At some point I had to accept the following:

1) We have been cutting, not increasing, upper bracket income taxes for decades; this hampers our ability to "grow out" of deficits.

2) We have also been cutting discretionary spending for decades; we may be down to the stuff that politicians on examination can't in good conscience cut.

So the TEA Party program has to rely on cutting blindly, without looking, without caring whom it hurts, because tax cuts are ostensibly always more important.

But sometimes public spending is better at creating growth than private actors acting in their perceived self-interest. So blind tax cuts put the lie to any claim that right-wing "economic freedom" policies are also seriously pro-growth.

My answer: Raise taxes, we've gotten ahead of ourselves on cuts.
foolsguinea: (suzie)
Cutting out the middle men
The most efficient way to spend money on the homeless might be to give it to them

Well, OK, it's a libertarian answer from a libertarian rag, but I think it's worth considering. I think a general negative income tax/refundable tax credit/basic income guarantee is a good idea macroeconomically. But when I say this, people tell me, "Some people just wouldn't work."

Some people aren't working now. In multiple senses. But they can do more, contribute more, than they do now if they have a little money. They can support someone else's real productivity. Isn't that better than makework or sticking them in supervised homes?

Maybe the market answer is the generous answer in this case, and a workable answer.

Or maybe I'm full of it.
foolsguinea: (Default)
Wow, false dichotomy, anyone? Oh, it's very skillful. But it's false dichotomy: Individualism or total state control, period. Oyyyy. And sadly, this is taught in universities.

This was linked on a relative's Facebook, & I considered registering just to say that I envy such a blithe & facile use of the fallacy of exhaustive alternatives (not to mention the bizarre conflation of selfishness with individual action).


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