Home > Uncategorized > Looking below the surface

Looking below the surface

from David Ruccio

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Mark Tansey, “The Myth of Depth” (1984)

The original title of this post was, “What do liberal economists want?”

So, what is it they want? According to their public pronouncements, not a whole helluva lot.

The liberal mainstream economists who have been attacking Bernie Sanders’s proposals and Gerald Friedman’s analysis of those proposals have acknowledged they actually support some of Sanders’s proposals.

Like what? Well, Christina D. Romer and David H. Romer (pdf) “enthusiastically support. . .greater public investment in infrastructure and education.” And Paul Krugman, for his part, makes the case for more public construction.

That’s pretty much it.

The fact is, the arrogant liberal response to Sanders and Friedman carried out in the name of “responsible arithmetic,” which has created an “illusion of consensus,” has been been both timid (in terms of actual policies) and shallow (in terms of what it focuses on).

Liberals always want more public investment in infrastructure and education, because everyone wins—and no hard choices need to be made.

At the same time, they claim they’re the only ones doing the hard, deep economic analysis. But their methods and models only serve to make invisible what is really going in the economy, just below the surface.

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Take the recent kerfuffle about Friedman’s analysis (pdf). The attack by liberal mainstream economists has been all about the amount and level of economic growth—nothing at all about the kind of growth. And that, in the end, is what Sanders’s proposals and Friedman’s analysis are really focused on.

As everyone knows, the growth we’ve seen in recent decades—both before and after the Great Recession, has benefitted only a tiny group at the top. The incomes of everyone else have either stagnated or fallen further and further behind.

And what about going forward? Unless there’s a fundamental reorientation in the way the economy is organized, more growth—even with more public investment in infrastructure and education—will continue to benefit only the small group at the top of the heap.

What liberal mainstream economists don’t see—and don’t want the rest of us to wrap our heads and hearts around—is that growth, by itself, has only a small effect on incomes for poor and working Americans. It doesn’t raise wages, it doesn’t reduce poverty, and it doesn’t close the gap between productivity and wages. Not in any significant fashion. And it will probably make the distribution of income even more unequal than it is now.

That’s why increasing numbers of people have become disenchanted with the “liberal fantasy” and have begun to look elsewhere—below the surface—to ask new questions about how the economy is currently organized and how it might be reorganized to actually benefit poor and working people.

  1. March 1, 2016 at 6:42 pm

    “What do liberal economists want?”

    To be promoted in a profession in which the “commanding heights” are dominated by the servants of financial power.

  2. March 1, 2016 at 11:41 pm

    Now you are beginning to analyze the economics of qualitative growth. Investment in freeway bridges as infrastructure at this time is questionable, for example.

    Liberals believe the people who support Bernie Sanders will back Hillary if they, liberals, succeed in engineering Hillary’s nomination. I’m an old dad listening to first time young voters, they don’t seem particularly worried by Trump over Hillary.

    Will the benefits of the Sanders proposals continue to be obscured? Will a militarist liberal win again as the lesser of two evils?

    Will economists ever realize that deficit spending goes to war?

    • blocke
      March 2, 2016 at 11:48 am

      Well, scapegoating and fear mongering, collective hating, for those who have any historical memory are things to be worried about, even if “young people don’t seem particularly worried by Trump over Hillary.” To his credit Obama never liked the slaughter of the innocent and the victimization of the helpless. Trump faces every question with an open mouth and a closed mind.

      • March 3, 2016 at 12:41 am

        To his credit Obama never liked the slaughter of the innocent and the victimization of the helpless.

        Huh?! I hope this is irony.

  3. March 2, 2016 at 5:57 am

    “That’s why increasing numbers of people have become disenchanted with the “liberal fantasy” and have begun to look elsewhere—below the surface—to ask new questions about how the economy is currently organized and how it might be reorganized to actually benefit poor and working people.”

    One of the best postings I’ve seen on this blog. Almost makes you believe economists have some common sense. But it also adds to my certainty that economists are not the best or even better choice to lead the reorganization of the US and world economy. They are too invested in keeping things unchanged, or changed as little as possible. There are some economies in the world that could provide a starting point for this reorganization. They include Israel, Canada, Belgium, Austria, etc. But you know Americans. We’re exceptional. We don’t take advice or models from anyone.

  4. graccibros
    March 2, 2016 at 3:43 pm

    David:

    Good posting. I wonder if you would elaborate a bit more, and hone in on something which has been central to the Clinton campaign, and especially with black voters in the South – and I suspect with Dem. voters in many other places: I’ve heard it as the dominant belief system among upper middle class whites near the Beltway. What I’m talking about is the myth vs reality of the nature of the second half of the 1990’s boom…when on some of the key indicators, wages and income distribution…the numbers moved in a more progressive direction, but do to what? Clinton’s policies or the secondary effects of a 1920’s type “big tipper” economy. Which didn’t last, and not just because Republicans ruled from 2000-2008. The Dot.com crash and the corporate malfeasance wave which broke early in the 2000’s would have, in my opinion, happened under Al Gore too, because it flowed from a Center-Right consensus about markets and de-regulation.

    Has anyone heard, in the many debates, any deep questioning of the nature of the Clinton economy’s best years? I haven’t.

  5. March 3, 2016 at 1:29 am

    “The attack by liberal mainstream economists has been all about the amount and level of economic growth—nothing at all about the kind of growth.”

    Yes, kind of growth is far more important than level, especially in terms of employment, income, and social stability.

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