Monday, July 14, 2008


Sam Smith

Even before the current mortgage crisis, evidence that rightwing economic policy since Reagan has been a failure was overwhelming. The problem was that nobody seemed to notice. In no small part, this was thanks to a media - heavily comprised of ex-political science, history and English majors - accepting without question propaganda from the right that, in many ways, was the same thing to economics as creationism is to evolution.

Even now, with news of collapse unavoidable, journalists try to sound intelligent by suggesting government involvement in the rescue from two and a half decades of corporatism might be a violation of the allegedly sacred principles of the free market. This is not an ideological matter on the media's part - after all, NPR has been a regular enabler - but rather reflects the journalists' willingness to rely on whatever "expert" happens to be in power at the moment.

Thus, the average reader or viewer may not realize that during the glory years of the second robber baron era, things like these have fallen significantly:

Minimum wage as percent of average wage

Real income

Real manufacturing wages

Percent of single women and mothers in the workforce

The bottom 40%'s share of national wealth

Older families with pensions.

Workers covered by defined benefit pensions.

The savings rate

US manufacturing jobs

And here are some of the things that have grown:

Top 1% share of total income

Income gap between rich and poor

Foreign debt as a percent of GDP

Age at which one can receive Social Security


Consumer credit debt

Housing foreclosures

Severe poverty rate

With the media almost completely blacking out all but conservative economic viewpoints, the public has little idea of how well socialism often works or how a blend of capitalism and public involvement can solve many problems, or that we actually function on a principle Paul Soglin, the former mayor of Madison, Wisconsin, labeled lemon socialism, of which the current bailout of the big housing insurers is a classic case and in which the capitalists both get to make money and then get bailed out by the government when they fail.

This has been one of the media's greatest sins, one that stems from ignorance, groveling to power and infatuation with the cliches of the moment.

Just as examples, why are we not allowed to debate regulations on credit care usury? Or an equity sharing program in which the government helps people buy homes rather than helping the banks when the loans go bad? Or letting the government as well as the banks print money - to be used for non-inflationary public works instead of putting generations in debt for stupid wars?

The Republicans lack the intelligence, the Democrats lack the courage. The media can continue to contribute to our downward economic slide or it can help introduce us the ideas, principles and approaches that will show the way out of a quarter century of greed and stupidity parading as economic theory.


At July 14, 2008 4:40 PM, Anonymous neocon-neolib-econ 101 said...

Firstly, economics was always a fraud.

The Short Version, by Jay Hanson

( The Long Version is archived at )

(Permission to reprint explicitly granted.)

Any ONE fundamental error in neoclassical theory should be sufficient reason to reject conclusions based upon that theory. Here are five fundamental errors in the theory:

#1. A fundamentally incorrect "method": the economist uses "correlation" and "post hoc, ergo propter hoc" (after-the-fact) reasoning, rather than the "scientific method".

#2. A fundamentally inverted worldview: the economist sees the environment as a subsystem of the economy, rather than the other way around. In other words, economists are trained to believe that natural resources come from "markets" rather than the "environment". The corollary is that "man-made capital" can substitute for "natural capital". But the First Law of thermodynamics tells us there is no "creation" -- there is no such thing as "man-made capital". Thus, ALL capital is "natural capital", and the economy is 100% dependent on the "environment" for everything.

#3. A fundamentally incorrect view of "money": the economist sees "money" as nothing more than a medium of exchange, rather than as social power -- or "political power". But even the casual observer can see that money is social power because it "empowers" people to buy and do the things they want -- including buying and doing other people: politics.

If employers have the freedom to pay workers less "political power", then they will retain more political power for themselves. Money is, in a word, "coercion", and "economic efficiency" is correctly seen as a political concept designed to conserve social power for those who have it -- to make the politically powerful, even more powerful, and the politically weak, even weaker.

#4. A fundamentally incorrect view of his raison d'etre: the economist sees "Homo economicus" as a "Bayesian utility maximizer", rather than "Homo sapiens" as a "primate". In other words, contemporary economics and econometrics is WRONG from the bottom up -- and economists know it. The entire discipline of economics is based on a lie -- and economists know it. Moreover, if human behavior is not the result of mathematical calculation -- and it isn't -- then in principle, economists will NEVER get it right.

#5. A fundamentally incorrect view of economic élan vital: the economist sees economic activity as a function of infinite "money creation", rather than a function of finite "energy stocks" and finite "energy flows". In fact, the economy is 100% dependent on available energy -- it always has been, and it always will be. See a synopsis of the current energy situation at ."

Basically neocon and neolib economic theory are about sales, i.e. the selling of the notion that human activity creates wealth. Truth is that real wealth is energy which is finite and can only be spent, not created. We can be wise or foolish in our expenditures, but we cannot , at this point with our limited knowledge, add to our account. So it's not so much whom we elect that's pressing; it's the realization that we'd better get our heads out of our asses, quit dreaming of escaping this planet, plant a fucking garden and try to get along with the planet and it's other inhabitants.

At July 14, 2008 7:35 PM, Anonymous Anonymous said...

The same corporate interests own both the Democrats and the Republicans. Nearly everyone knows it, yet voters continue to endorse one or the other of these fake opposition parties every 4 years. The whiners are getting exactly what they voted for.

At July 15, 2008 9:02 AM, Anonymous Anonymous said...

"When will the media ditch the rightwing economic cult?"

When the media is no longer owned by the rightwing economic cult.

At July 15, 2008 12:28 PM, Anonymous wellbasically said...

They will ditch the rightwing cult when the left wing cult shows some promise of actually working.

For instance there is no debate on credit card rates because limiting rates will limit the amount of money that people can borrow. These are the very people you seem to want to help.

Limiting mortgage lending will limit home ownership by poor people.

The real state of economic reporting is that the government people are in bed with the money people on right at left. Obama and the developers for instance. Not that the Republicans will say anything because they're completely in the bag.

At July 15, 2008 12:29 PM, Anonymous Anonymous said...

" In no small part, this was thanks to a media - heavily comprised of ex-political science, history and English majors - accepting without question propaganda from the right"

" but rather reflects the journalists' willingness to rely on whatever "expert" happens to be in power at the moment."

This is the problem of schooling. We have been taught to sit down, shut up, and believe whatever the expert's tell you. Schooling causes people to not question the dubious or dangerous, because some expert hasn't told us to worry yet. School creates sheeple and until we either abolish schools or make them more like schools in Finland where small classes and independant study are all part of the regular day, we will never get any better.

Our schooling system has been developed to make helpleess people who won't stand up for themselves so our corporate rulers can have their way with our money, energy, and lives.


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