Friday, May 14, 2010

Hard Concepts

The other day Ezra The Tool (but they say he puts out, so there is that) ran an interview on his WaPo blog with Jamie Galbraith, iconoclast economist.

And the so-called Lefty-blogosphere exploded with denunciations and ad hominems at both Galbraith, who denies the validity of Economic Orthodoxy, and at Ezra The Tool for daring to run an interview with The Heretic as well as your general Anti-Ezra animus.

Every time these sorts of things happen, especially in the so-called Lefty blogosphere, I am intrigued and sometimes alarmed. What is really going on? And in the case of the extended and often completely outrageous denunciations of Galbraith (from so-called Lefties), is it ignorance or... something else?

As a rule, I tend to have little faith in economists of any stripe; they are almost all inclined to declare Ultimate Truths that upon examination prove to be Crocks of Shit. They serve economic and political agendas, their own personal careerist ones, or the agendas of Corporate Masters and/or their Government Hirelings. By and large, and as a profession (so-called), they have no interest whatever in and little knowledge of the "micro-economy" of individuals and communities, and are oblivious to the consequences for the masses of following their advice (if it is even comprehensible enough to follow). To say they "don't care" about anything but the private accumulation of as much more wealth as humanly possible by those who already have more wealth than they can count is to be charitable.

They and lawyers should be first against the wall when the Revolution comes.

But that's unlikely to happen in my lifetime, so I tend to be attracted to what little economic theory there is that actually pays attention to those consequences for the masses that are so often ignored or dismissed.

(As a side note, in order to understand Obama's extraordinary level of economic fealty to American and global corporate and financial interests, and to help comprehend the astonishing level of White House indifference to the economic plight of the masses, it might be wise to remember that Obama's grandmother -- who was his primary caregiver growing up -- was a banker, and his father -- who essentially abandoned him -- was an Kenyan economist who got his undergraduate degree at the University of Hawaii and his masters at Harvard in the early 1960's. The Hooverite economic policies coming out of the White House are no accident. And don't doubt for a moment that his ascent to the Throne wasn't smoothed by billionaires and finaciers who saw that Obama had their interests at heart.)

Galbraith is one of the economists I pay at least glancing attention to. I am not a devotee of his or of any other Alternative Economist, nor do I subscribe to any particular Economic School or Theory. All I know is that current fashionable economic theory is based on unfettered plunder and rapine of the "weak" by the "strong."

Galbraith denies the validity of the Peterson-and-The-Billionaires' Deficit Hysteria, and I tend to agree with him. In his interview with Ezra, he points out -- accurately, in my view -- that the deficits the government is running right now have essentially "zero" danger. If anything, he advocates even larger deficits in order to put people back to work and get money flowing more freely through the economy. He rigorously disputes the analogy of government debt and household debt. If anything, he seems to believe that government debt should be used to help clear household debt rather than being handed over to the banking institutions to prop up their make-believe solvency and to keep those bubbles (and bonuses) coming.

From the way the anti-Post-Keynesian rabble attack Galbraith for stating the obvious, I suspect they are terrified of Galbraith and his economic heresy. It doesn't look like a rational fear at all, because on the face of it, if Galbraith's Modern Monetary Theory were practiced, the wealth and status of the Ruling Class would be assured in perpetuity -- through the happy agency of building up the economic wherewithal and security of the Lower Orders, instead of practicing the plunder and rapine and the repetitious finance bubbles the Ruling Class currently engages in.

But people who have invested plenty in the current economic system of bubbles, plunder and rapine, and who have grown fat and happy betting that the whole thing will crash and burn -- and are therefore eager to see it happen -- fear any change that would jeopardize their wagers.

I don't think, however, that includes a whole lot of non-elite Lefties.

So it is quite something to see the explosion of rage at Galbraith (and Ezra for interviewing him) at sites like Crooks and Liars, where the Galbraith comment thread is full of denunciations much like the comments on Ezra's interview.

What's up with that?

What are they so very afraid of?

Watch Galbraith on Moyers for more:

Note especially that though the interview with Moyers was recorded in November of 2009, here we are many months later and the outlook for Americans hasn't improved for the most part at all.

Apparently these Galbraithian Heresies are really Hard Concepts for those who are steeped in predatory economics.

No wonder Galbraith's pen is sometimes sharp:

Leading active members of today's economics profession, the generation presently in their 40s and 50s, have joined together into a kind of politburo for correct economic thinking. As a general rule — as one might expect from a gentleman's club — this has placed them on the wrong side of every important policy issue, and not just recently but for decades. They predict disaster where none occurs. They deny the possibility of events that then happen. They offer a "rape is like the weather" fatalism about an "inevitable" problem (pay inequality) that then starts to recede. They oppose the most basic, decent, and sensible reforms, while offering placebos instead. They are always surprised when something untoward (like a recession) actually occurs. And when finally they sense that some position cannot be sustained, they do not re-examine their ideas. Instead, they simply change the subject. -- from How the Economists Got It Wrong, American Prospect, November 30, 2002


  1. I like Galbraith. He's a chip off the old block. A Keynesian, which as long as we remain a capitalist economy, should be our own gold standard economist.

    No one got more correct over the long haul.

    There has got to be some sort of mass pathology in the air or the water. Because if we applied Henry Ford's idea of paying workers enough to buy his cars . . . across the board, then the rich would all benefit. If the government stepped in and forced full employment, which it could easily, easily do, the rich would all benefit.

    Is it that they just can't stand the idea of anyone outside the manor born getting a seat at the banquet table?

    We know that all too many Americans vote against their own best economic interests. That's a given. Whatsup wid Kansas, and all of that. But whatsup with the ruling class for wanting to keep the poor and the middle struggling so hard? Don't they see that the more consumers in the pool, the better for ownership?

    Can't they conceptualize that a million people with the disposable income to buy their products is so obviously better than a thousand people with the same total dollars?

    Perhaps the first mistake is to accord the ruling class with intelligence and rationality, much less think they're smarter than the average bear.

    The more people they push out of the pool of consumers, the less they sell. Eventually, it's gonna come back and bite them on the ass-ets.

    And that's just on the commerce side of things. A host of maladies arises due to inequality. Crime, violence, despair, sickness, short lives, etc. etc. etc.

    It's all rather baffling.

  2. Well.

    I can only liken it to a gambling addiction, on an almost unimaginable scale.

    They want the high from winning, winning big. And they'll do almost anything to get it.

    Galbraith, et al, are essentially suggesting a form of intervention.

    Instead, our governments are united in their determination to keep handing over more and more chips to the addicts so they can keep wagering.

    It's yet another example of government ruling contrary to the interest and the will of the public.

    It's the New Normal.

  3. An aside. Can not get to your site from work. My company blocks any "social networking" sites.

    With my late hours, that means big gaps between responses here.

    Anyway, you might find this article interesting. I'm guessing these crazy ideas work their way into new legislation in some form.

    Hope all is well . . .