There's a piece in Sunday's New York Times about the death of ideas: where are the big thinkers today -- paradigm shifters like Keynes, Einstein, Friedan?
The author -- Neal Gabler -- has a point. The big thinkers in my field are basically arguing over Keynes vs. Hayek... not that there's anything wrong with that. Since the Great Depression, Keynesian economics has never been so important... nor so poorly understood. But if the point is that we're stuck in old boxes, I think he's right.
But, at least in the realm of political economy, I think he misdiagnoses the cause. Gabler stresses information overload. There's so many bytes of info at are fingertips that we no longer think in ways that foment and nurture ideas... we just know stuff.
That may be true in some fields but in my field, I think the concentration of wealth and its handmaiden -- power -- are implicated. Let me explain by way of example.
The financial crash of the 2000s revealed a confluence of many powerful and socially disruptive forces: levels of income inequality not seen since the dawn of the Great Depression, stagnant middle-class living standards amidst strong productivity growth, solid evidence that deregulated markets were driving a damaging bubble and bust cycle, deep repudiation of supply-side economics, and most importantly, even deeper repudiation of the dominant, Greenspanian paradigm that markets will self-correct.
We may not, in my lifetime, witness another historical moment where these destructive forces are so clearly revealed. What's more, there were economic thinkers arguing for a new paradigm (I hesitate to list them because I know I'll leave someone out, but Stiglitz comes to mind as particularly visionary in those days; George Soros had a great little book, Jamie Galbraith, Dean Baker, Krugman come to mind -- my book All Together Now: Common Sense for a Fair Economy took a stab as well)
And yet, at least from where I sit today, we let the moment pass. Far from a debate over a new paradigm, our national political economy discussion is bereft of ideas, leaving us mired in recession as we self-inflict one economic wound after another. Forget new ideas -- we can't seem to correctly apply the old ones!
Why did we squander the opportunity? Not because there's so much information on the web. It is, at least in part, because the concentration of wealth and power blocked the new ideas from a fair hearing.
Deregulated markets, "rational market" theories, eroded labor standards, the retreat of unions, regressive taxation, financial engineering, global arbitrage, low rates of job growth, growth that eluded the middle-class and the poor... all have contributed to almost unprecedented levels of wealth concentration.
Such dynamics are self-reinforcing. The narrow slice of winners, enriched beyond imagination by these forces, use their wealth to insulate themselves from new ideas that threaten their position by purchasing not just political power but even "ideas," through bogus think tanks and media operations.
They and their representatives ensured that when history provided a unique, crystallized moment of clarity as to their fundamentally corrupt paradigm, too few would see it clearly and when those who did sounded the alarm, no one would listen.
And now we're arguing about debt ceilings, budget cuts, and super-committees, not to mention whether evolution and climate change are real or conspiratorial notions of the left.
I know this is a dark vision of reality but before you get too deeply bummed out by it, let me say that I'm by no means alone in this analysis of the problem, and I've begun to see some hints that more and more of us are getting the picture. And that has the potential to create a welcoming climate for new ideas that challenge this paradigm, ideas that have been sorely missing for too long.
This post originally appeared at Jared Bernstein's On The Economy blog.
Just 3 examples out of an infinity:
1. A little more than a century ago--within living memory--the majority of Americans worked on farms. Automation has taken over those jobs.
2. Robots in auto factories have replaced 10s of thousands of jobs in the auto industry.
3. Prefabrication has destroyed 10s of thousands of jobs in the construction industry. Somebody says "can you build a house with robots"? Yes, you can. You just need low wage people to nail it together in a few days.
America has been running under the economic school of Chicago and Milten Freedman since Ronald Reagan for 30 years.
Before that we did use Keynesian Economics for the New Deal of FDR, JFK, LBJ and the largest growth of the Middle Class since Adolf Hitler
GUNS vs. BUTTER is 14 to 1 private spending for each $1 of public spending. That is not Education or MIC spending. It is Infrasturcture where the constuction workers earn $1000 a WEEK and buy Beer, CARS and HOUSES. It is this Butter spending that level the Business Curve that prevents the transfer of even greater wealth to the rich in recessions
Politicians and regulators, owned entirely by their wealthy puppeteers, have fought to block any changes that would prevent exactly the same scenario from playing out again.
The net result of that scenario?
Simply the biggest shift of wealth in our history.
Peoples real property, investments and retirement funds were simply shifted up to those who had the power and means to grab them for their own.
And we were powerless to stop them.
No we have no means to change the system or punish the criminals.
We even have large numbers of people brain-washed into defending these criminals and crying out that the rich are the real victims.
Makes me retch!
As the Keynes model doesn't seem to be working, let's try the Hayek model within a Constitutionally limited governmental environment. That should do the trick.
And all it takes is some crooked SOB to say it Keynes fault and everyone believes it?
What we are dong today was tried by Harding, Coolige and Hoover.
Why REAGAN raised taxes 11 times after lowering them ONCE. Why Bush1 said "read my lips" and raised Taxes. Why Clinton created a surplus by RAISING TAXES.
So here we are repeating the BAD ECONOMICS ignoring the SUPPLY SIDE ECONOMIC principals of REAGAN and CECIL RHODES (blood diamonds)
And pretending Keynes, New DEAL and REAGAN, BUSH1 and CLINTON is not the right thing to do.
Pretending History is not true and VooDoo Economics is just beyond are reach to keep the Rich Rich and let the poor Rich is not Economics. Wishfull thinking and destroying the technology, Fairness and Equality that is need to bring about Equilibrium and Balance in our Economy.
Estate Taxation to redistribute wealth
Progressive FAIR and EQUAL Taxation to maximize Equality of Opportunity
Balance of Capital to Labor (not supply (capital) only side)
Is not that hard to understand if you look at history for truth and knowledge instead of Political ADVANTAGE for the few
get your money out build local business
info General shift http://www.kpfa.org/archive/id/72377
Mr Global concentrates wealth http://www.kpfa.org/archive/id/72248
And http://www.kpfa.org/archive/id/72310
Tarpley says we won in Winconson even though only got rid of 2 republocrats
People of Wisconsin went up against the entire republican demrocrat zombie capitalist machine
The people got no help from dem party, union manangement
http://tarpley.net/world-crisis-radio/ 8-13-11 and solutions
Because it is an 'art', economics is subject to the politicalization of its arguments (aka theories). Thus we have the insane but politically promoted concept of "supply side economics" dominating our economy for almost 30 years with dabblings of Monetarism and Free Marketism thrown in by politicians who used these ideas to subvert the system to to serve their short term needs. It's ugly, and it is not scientific.
The very first necessity is that we have an apolitical, objective economic authority that can propose and tune solutions for our economy. We cannot allow political parties to hold the economy hostage to political ideologies.
The plain fact is that Republican economic policy over the past 30 years has been completely driven by ideology and designed to marginalize all Government activities except defense, national security, and corporate welfare. The net result is massive wealth disparity, a discontented population, and an economic attack designed to undermine the country's ability to provide basic human services for its people (aka, 'starve the beast'). Ultimately there is no room for people other than the wealthy and their corporations in this new Republican model. People simply become slaves and chattle to the system :-)
History speaks well of the truth. Of what works and does not work. Making economics a true science if you listen to history.
Why Reagan lowered tax 1 time, but raised it 11 times. Where are the worshipors of Reagan here?
Bush1 said "read my lips", where are the republicans here?
Clinton raised taxes and created a sirplus, where are the Democrats here?
Corruption is not truth. That is the biggest lesson today. Both parties work for Stock Traders who OWN and DIRECT the corporations
http://www.theaustralian.com.au/business/opinion/i-made-a-mistake-says-greenspan/story-e6frg9mf-1111117848644
Mr Greenspan said the free market ideology that had guided his life and dominated world capitalism for a generation did not work the way he thought it would.
Republicans would argue that the markets weren't "free" enough, but it is clear that this a mute point. Free markets are obviously free to go to irrational excess :-)
Neither markets or capitalism are "self regulating" or fair. However, all that we know and continue to learn about markets and economics must be available to help tune and control our economy to the best of our ability to moderate excesses and make them as fair as possible. This is the realm of Democracy and Government.
For the foreseeable future, we will not be able to do this with certainty, so we must continue to strive to find ways to learn from our mistakes, moderate future calamity, and forge our way forward. This requires highly dynamic and reactive Government to objectively manage, control, and regulate economic policy to meet changing conditions both at home and internationally.........without undo influence by ideology or political machinations. Get the money out of politics; get the politics out of economics.
Semper fi
The problem is not Free Enterprise, the problem is ignoring existing law and creation of Laws for the few.
Is he talking about the Koch Brothers?
Wealth also can be used to control ideas (aka intellectual property). Witness the fact that US corporations actually own the intellectual property that has been contributed by employees over centuries. And they have the right to sell and profit from this intellectual property over time without any obligation to the people who contributed it or to the Government (aka society) that preserved their ability to profit from it.
That is, wealth builds wealth at the expense of society and it's people, and it is only through mechanisms that return some portion of that wealth to society that the process can continue. Another area where Republican myopia discounts the fact that in the end, society is the source of all wealth :-)
It is the Capital and Labor markets that have been skewd to the Supply Side by the laws and enforcement. Regan and Cecil Rhodes are the GODFathers of all of this.
The lack of knowledge or corruption of all politicians is the rub and why it is all sinking. The 0 sum comes when workers make less than they pay and all the wealth lies in the hands of the few.
Why it is so drastic today. Look at the concentration of wealth and the salary tax ratios of workers
It's not just with economists brother.
Try talking real healthcare re-structuring.
By now, we would have been down a different road facing a much better future.
Warren Buffet has one good idea: economically punish executives AND stockholders who fail to self regulate instead of letting them walk away with millions while the taxpayers suffer as we did the last time :-)
But be careful here. No banks = no economy = no you :-) Not much future in that :-)
Breaking up the Too Big to Fail should be the first action today along with all of the other Monopolistic Mergers and Acquistitions.
Since Obama Quest has been swollowed, T-Mobile will be soon too. The result is 1/2 of that work force will be lost to lay offs, yet the profit is the same. And it is call Productivity. No it is Monopolistic Activity and the selling of America. Worse than .com. And we keep pretending we are a Manufacturing Country which was lost 20 years ago with the same tactics
We do not need shoe factories. We need to maintain our high tech that is being squeezed out for CASH transaction.
Voodoo economics and Creationism are alternate realities that have been brought to us by Republican 'delusionaries' who have somehow grabbed the agenda away from the people with the help of the massive Republican propaganda machine.
Much more of this and the country as we know it is toast. We need a visionary to burst this delusionary Republican bubble :-)
That is not progress that is UNEMPLOYMENT. Duplication is COMPETITION and EMPLOYMENT. Familes flurishing. Remember Family Values? Just a few years ago?
I used to intern for a State Rep in Hartford, CT back in '88 who once told me: "In politics, the only things worth having are the things you need to take from someone else".
How right he was. And, there is no Plan B.
So when we have a debt problem we take DEBT from the public and give it to banks who make a good living on the PRESENT VALUE OF MONEY. And they give no present value to pay the DEBT back or off
When have you ever heard that in our economic debates today?