Sunday, September 18, 2011

Crackpot Economic Theories

[The lecture heard in the video is complete gibberish and crackpottery.]

We are ruled by crackpots, and their crackpot economic theories are devastating to ordinary people's well being and standard of living.

Since the beginning of this Endless Recession, the Crackpot Economists (and their powerful sponsors) -- aka The Chicago School and their friends -- have been been running around trying to use the crisis as an opportunity to undo what's left of the New Deal and impose their neo-Hooverist/neo-liberal economics on all of us as quickly and as thoroughly as possible. They cry about literally everything, and the solution they propose for everything is to cut taxes on the rich, remove regulations, and sell off the public treasure at fire-sale prices.

This will supposedly make life better for the masses. That it does just the opposite is said to be nothing but a perception problem. "Change" and all that. Nobody really likes "change" and they'll use every means they can to fight it. But "change" there must and will be. It is inevitable. You and I have no choice but to submit.

Think of the Industrial Revolution. It was a tough transition for many, but who among us would want to go back to the way things were before the magnificent technological and social transformations that took place (and are still taking place) thanks to the Industrial Revolution? No one. Right?

So there you are. The economic and social transformations going on now are of the same order. People must get used to what's in store, but once they do, they will thank the Powers That Be for having been so generous to them.


Even though all of our rulers subscribe to this nonsense, for if they don't they will be replaced pronto, it's time for the People to go beyond challenging it politely. The rigors that are being imposed on the "lesser people" to pay for the continuing economic errors of their betters have long since reached the point where struggles are severe for more and more millions all the time. The economic situation of the many is not getting better. It's getting worse.

Statistics, however, have been routinely massaged and manipulated to hide what is really going on. For example, it's only recently been noticed -- statistically -- that Americans' incomes have been falling. Why might that be? Simple: the highest incomes have not been falling; they've been increasing. Ordinary Americans' incomes have been falling. But when you factor the two together, overall income has been "stable" or even from time to time "increasing" -- when for most workers, no such thing is the case. It's just the opposite. And for many workers, incomes haven't fallen a little bit -- like the 5% or 6% that is only now being reported. They have fallen a full 50% and more for many.

Unemployment is much higher than reported (essentially the real unemployment figure is about double the rate reported) because the official figures only include those who fit very strict criteria and ignore most others.

Unemployment insurance is often seen as something keeping millions out of poverty -- but it always represents at least a 50% reduction in income. And at any given time half or more of the unemployed don't qualify for any benefits at all.

And all the time, while incomes are falling and wealth is disappearing from the middle and working classes at an alarming rate, prices for basic goods and services are increasing at an even faster rate. Prices for food and fuel, clothing, utilities and rent are going up quickly, while the ability of Americans to pay increased costs for these essentials is declining. Consequently household debt is increasing as more and more people try to get by as best they can by accumulating more debt. Supposedly, the savings rate is much higher now than it was during the latest round of our Bubble Economy, but those who can save are fewer in number, and their situation is generally much better than those who can't save.

As a practical matter, declining living standards are being imposed, slowly but rigorously on the majority, yet cruelly and swiftly on many Americans nevertheless.

Strangely, the Highest of the Mighty are doing very well for themselves, better in many cases than they ever have. They are showered with money -- which they then hoard -- by the government and the Federal Reserve. They are given every possible tax break and debt relief imaginable. They are curried and favored to a fare thee well by policy-makers, and their demands are acted on with alacrity while the situation of the masses continues to decline, the Chicago Boys continue to say there is nothing that can be done about it, and masses will just have to suck it up.

The policies being proposed and enacted in state houses and the federal government are ensuring that this situation continues indefinitely. Which is of course exactly the program the Chicago Boys have been advocating for decades.

The People, in other words, have no voice whatever in what's going on. And it's not just here. It's around the world.

Never in history have so few been able to steal so much from so many and call it God's Will.

Any conscious observer has got to be sickened by it.

The economic solution is straightforward and simple:

Provide paid work to everyone who wants to work and can work; most employment will be in the public or non profit sector, much of it will involve public works, neglected public infrastructure, and community service.

Provide immediate and substantial household debt relief. (I have recommended $80-100,000 per household) In lieu of debt relief, for those households with minimal debt, provide a substantial sum of money (or subsidy) specifically for the purchase of fuel efficient vehicles, energy efficient appliances, alternative energy equipment, and energy saving retrofitting of residences.

Impose a transaction tax on stock and similar trades and impose a heavy speculation tax to discourage speculators and make stock transactions pay some of their social costs.

Impose a substantial estate tax.

Lift the cap on the Social Security payroll tax.

Reduce the retirement age to 60 and then to 55.

Increase Social Security benefits substantially.

Provide Medicare-like health insurance benefits to everyone.

End the drug war, and reduce the prison population. Forbid private prisons.

Reform public education to control over-administration and provide sufficient funding for public education.

Strictly control the derivatives market.

Nationalize the banks.

End foreclosures now.

End Imperial Wars of Aggression now.
The policies that have been adopted by Our Rulers approximate the opposite course of action with predictable results.

Now, someone is getting rich off the persistence of the Endless Recession, make no mistake.

And the People are being impoverished, by policy from the top.

At some point, they will revolt.

But in the meantime, a lower level of consumption does not necessarily equate to a lower standard of living. We do have to become accustomed to making do with less, but at the same time, that doesn't mean that the people must be forced into poverty so that the rich may continue to enjoy levels of luxury unheardof a generation ago.

We are transitioning from a consumption-driven economy to something else, something like a subsistence economy but with extraordinary levels of technology. It doesn't have to be a bad thing.

But the current regime that essentially hands everything over to those on the top of the heap today cannot be sustained into the future. At least I would like to think that Americans won't stand for it.


  1. Your solutions are spot on.

    Yes. Nationalize the banks. In fact, nationalize every monopoly with a social good. At least. Have mentioned it before, but Tony Judt makes a great case for that in his Ill Fares the Land, though I would go further than he proposes. We must, at the same time, reverse Citizens United, take away corporate personhood, and end the link between money and speech. That connection must be erased completely and permanently.

    I think we need to work toward a form of total unionization of the workforce as well. An automatic membership, simply by being a citizen of this country. And we all, as workers, get to vote for our union reps on a local, state and national level. No parties allowed. All outside any party system by law. A permanent institution representing Labor, and just Labor, constructed via direct democratic means. Strict limits on donations, etc. Perhaps, no more than $250 per person, with no bundling allowed. Individual contributions only. And go from there.

    We must have a serious institutional counterweight to Capital, one that lives and breaths and grows with the country. All non-profit. All democratic.

    It's time to put an end to the dominance of Capital, and unionize the entire workforce.

  2. I couldn't handle listening to the entire clip, but the part I did hear was classic sophistry. Throw around a bunch of (misplaced) jargon like "empirical" often enough, and you'll get the audience eating out of your hand. Match that with cart-before-the-horse assertions like "You can't disprove what I'm saying because it's impossible to disprove" and you'll generate "knowing" nods and new converts.

    This Austrian School, far-right garbage is spreading like wildfire, too. It was once seen through for the claptrap is really is, but now it's embraced by our "leaders" in DC.

    Tragic, really.

    Also: caught part of Obama's speech today on the new deficit reduction deal. This "Buffett rule" idea is incredible. Obama has managed to make it sound reasonable that billionaires should pay as much in taxes as their secretaries -- instead of three times more, as they should!! Damn. How on earth did the conversation get so screwed up? The GOP will argue that Buffett's taxes shouldn't be raised at all, while the Dems will argue that they should be as high as the middle class's!!

    A choice between A and B. Sheeesh!! Why isn't anyone proposing that Buffett pay triple what the middle class pays?

    The same? So that's now a great victory for progressives, if we just get it to the same percentage?

    The Overton Window shifts again to the right.

  3. I'm seeing all these so-called O-bots going around proclaiming the utter wonderfulness of Obama's brilliant political move to declare that billionaires should pay income taxes at the same rate as their secretaries instead of much less. Why even Warren Buffett agrees!!``1

    "Of course it has no chance of passing" say these same O-bots. It's just a brilliant political move that will force the unmasking of the Rs as tools of the oligarchs.

    Yes. Yes, they are. Did anybody doubt it? (Clue: so are the Ds.)

    I'm with you. The income tax rate on billionaires should be confiscatory above a certain level (the Eisenhower Era rates sound good) same with the estate tax. Yes, it is (or rather should be) redistributory -- downward.

    Whoo-doubleplusgood-hoo! It's about time!

    As for the clip I posted, I couldn't get through it either; it is just gibberish. Because the speaker so debases language and the plain meaning of words, ironically, I think it shows how the Rothbardians and von Mieses enthusiasts have become a cult. Since only the initiates can possibly understand their gobbledegook. But we see the results day by day, and you would think they would get the idea that it doesn't work.

    No such thing. The Chicago Boys (who are now re-conceived as misguided "liberals") have screwed everything up, you see? They're not doing it right. Besides, they're liberals! [spit]

    We must advocate for what's right nevertheless.

    Some wag pointed out, "There is no mention of 'jobs' in the Jobs Bill. Isn't that interesting?"

    Got to match Paul Ryan, I guess. Someone else I can't sit through...