Yves has asked me to join her annual fundraising campaign and suggested that I write a note on stupid ideas in economics or geopolitics. Naked Capitalism is now almost 20 years old in its powerful efforts by its contributors here and commentators to dispel the infestation of junk economics and its rhetoric of deception.
The best antidote that I can recommend for an ideological pesticide is to contribute to Naked Capitalism to support its wide-ranging discussion and that of it commentariat to counter the pretenses by today’s power and money relations by continuing our discussion of how to create a fairer and more productive economy. So please go to the Tip Jar to support this work. After all, an economist would argue that backing Naked Capitalism generously is in your interest.
This effort is especially important in today’s impending financial crisis. We are all contending with the combination of fake news and the just plain wrongheaded cause-and-effect views of Trump’s cabinet members.. The media echoes their neoliberal palliatives so they can deny the deep systemic problems whose scope is not to be discussed in polite company.
We on this site are impolite company.
I began to make a list of stupid economic ideas, In almost all cases this turned out to be a vocabulary problem – an exercise in Orwellian doublespeak whose aim is to turn reality upside down and blame the victim or the fake opposition, as in today’s Democratic and Republican policies. The underlying demand is that the labor force, debtors, and what Mitt Romney called “takers” are demanding too much, forcing his class of “makers” to pay more taxes. Social Security and Medicare are the centerpiece of what they depict as excesses to buy off those they depict as lesser and thus less deserving
This turns the classical idea of a free market on its head. They equated free as free from economic rent, which was viewed as “unearned” (by takers, not makers). Our modern creed of neoliberalism favors financialized rentier income. That before getting to the fact that a “free market” is an oxymoron. Markets depend (among other things) on contract enforcement, which in turn requires a state to adjudicate disputes.
The rhetoric designed to dismantle public protection of the victims of selfish behavior defines such protection and progressive taxation as a burdensome intrusion into “free markets.” It further claim that today’s polarization of wealth and the deindustrialization is the result of a Darwinian evolution favoring the fittest, not the most predatory. They avert their eyes from the financial drains on the market for actual products .
A looming high-stakes example will see the Republicans seek to revive their common ground with Democrats to “save” Social Security by scaling it back, as Obama had hoped to do with his notorious Grand Bargain. The pretense is that there is an inherent crisis, as if the “problem” cannot easily be cured. Expand the Social Security and Medicare contributions above today’s low income-cutoff levels that “free” high-income recipients from having to contribute a penny. That’s before addressing the further Orwellian sleigh of hand, the pretenst government cannot treat Social Security and Medicare as item in the national budget, just like military spending. There is no need to pre-fund Social Security – or the Post Office, for that matter, another great fictitious claim to prepare for its privatization and Thatcherization.
The most logical solution would be to avoid financializing Social Security and pensions in the first place. This is the Satanic Flaw in what was called pension-fund socialism (actually, pension fund finance capitalism): imposing forced saving on employers and labor, setting aside their income to lend to the government (for Social Security) and invest in stock and bonds (and now private equity as well) to bid up financial asset prices. The effect is to diverge wages from being spent on real goods and services.
The effect has been to transform industrial capitalism into finance capitalism. Yet another Orwellian twist was to call it “pension fund socialism,” as if somehow labor was a capitalist in miniature, investing in stocks and bonds via mutual and pension funds.
But the 19th century idea of socialism was that it would be a natural evolution of industrial capitalism into a mixed public/private economy as governments provided basic services at subsidized rates or freely instead of being privatized as vehicles to extract monopoly rents at increasingly financialized prices.
I have tried to give my own examples of what I see as the broad theme of Naked Capitalism’s ongoing expose of today’s neoliberal deindustrialization. We all deplore the Democratic Party’s complicity in this process. Its major fight is against the Democratic Socialists hoping somehow to play a real role, as opposed to a token distraction from what the Democratic National Committee really is all about: “soft” face of hard-right Wall Street finance capitalism and the neocon military complex.
So please stand with Spartacus! Support this site as it does its best to help ordinary citizens help themselves. Go to the Tip Jar and give generously. It’s a philanthropic act of mutual aid to create a better dialogue and a better society.
