Home > Uncategorized > The Rana Foroohar Phenomenon

The Rana Foroohar Phenomenon

from Edward Fullbrook

A few years ago I took out a subscription to Time magazine, not because I wanted to read its weekly version of the news, but because it provided me with ongoing access to the magazine’s digital archives which I needed for a long-term writing project.  So every Saturday the magazine with its iconic covers found its way into my home.  Initially most issues ended up in the recycling box with their transparent plastic envelopes unremoved.  But sometimes while waiting for the kettle to boil, l would unwrap and leaf through an issue, and then – it took me a few months – I became aware that there was an unexpected and admirable dimension to today’s Time.  It has a name: Rana Foroohar.  She was and is Time’s economics editor, and thanks to her reportage my copies of Time are no longer recycled still wrapped.  Time magazine cover - capitalism

Time Magazine is of course both traditional and conventional, but when it comes to economics Foroohar is neither.  In terms of Econ 101’s articles of faith, both Foroohar’s selection of significant facts and her analysis of them are frequently profane.  Reading Foroohar, I was repeatedly surprised to find myself reminded of books and papers by Michael Hudson, Steve Keen, James Galbraith, Emmanuel Saez and other RWER contributors.  But as I tend to be slow about such things, six months passed before the penny dropped and I thought to check the Real-World Economics Review subscriber list.  Sure enough, Rana Foroohar was a subscriber.  

I am bringing up the Rana Foroohar phenomenon today for two reasons.  One is because it suggests that the work of the RWER community of scholars has had and is having more influence in the wider world than we realize. In assessing our success we tend to focus on curriculums and academic appointments, where heresy checks remain as tightly and ruthlessly enforced as ever.  But perhaps out there in the real world the credibility of Econ 101 is quietly declining as opinion-shapers begin to read and listen more widely.

My second reason for calling attention today to Foroohar is that she has just published a book, Makers and Takers, and which is the basis of a long article (and inspires the cover) in Time magazine’s current issue.   I’m about to order Foroohar’s book, and you may do likewise by clicking here.

Foroohar - Makers and Takers

 

 

  1. May 17, 2016 at 4:45 pm

    Excerpt from AMAZON.COM, “Eight years on from the biggest market meltdown since the Great Depression, the key lessons of the crisis of 2008 still remain unlearned—and our financial system is just as vulnerable as ever. Many of us know that our government failed to fix the banking system after the subprime mortgage crisis. But what few of us realize is how the misguided financial practices and philosophies that nearly toppled the global financial system have come to infiltrate ALL American businesses, putting us on a collision course for another cataclysmic meltdown.

    Exploring these forces, which have have led American businesses to favor balancing-sheet engineering over the actual kind and the pursuit of short-term corporate profits over job creation…Foroohar shows how financialization has so gravely harmed our society, and why reversing this trend is of grave importance to us all.”

    ***********Quote Frederick Soddy (The Role Of Money), “… every monetary system must at long last conform, if it is to fulfil its proper role
    as the distributive mechanism of society. To allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.”
    After reading Soddy, maybe, perhaps one can understand, “Foroohar shows how financialization has so gravely harmed our society, and why reversing this trend is of grave importance to us all.”(Free download….http://archive.org/…/role…/roleofmoney032861mbp_djvu.txt

    Edward Fullbrook, ” Reading Foroohar, I was repeatedly surprised to find myself reminded of books and papers by Michael Hudson, Steve Keen, James Galbraith, Emmanuel Saez and other RWER contributors….But perhaps out there in the real world the credibility of Econ 101 is quietly declining as opinion-shapers begin to read and listen more widely.”

    Please, after reading just one more book, Challenge, edit, or endorse.
    RWER does make a difference!

  2. May 17, 2016 at 4:53 pm

    Edward, you have provided an endorsment — can you provide a sampler — some choice paragraphs?

  3. May 17, 2016 at 4:59 pm

    Edward Fullbrook is right about Rana ! I have just ordered her book and will review it for my regular column in http://www.seekingalpha.com Rana identifies the parasitic nature of
    ” financialization”: the metastasizing of finance which now feeds on instead of serving the real economies in most countries. We report on all this daily in our Latest Headlines and Reforming Global Finance , as well as all the good news in our Green Transition Scoreboard(r) at http://www.ethicalmarkets.com

  4. Tom Welsh
    May 17, 2016 at 5:37 pm

    Another aspect to this phenomenon may be that Michael Hudson himself could never be published by Time.

  5. Marko
    May 17, 2016 at 11:00 pm

    Steve Keen publishes on Forbes’ website. I think that’s great , and I’ll continue to read Steve’s columns there as long as they’re free. I’m not about to support a long-running propaganda tool of the 1% because 1% of its content recently turned progressive.

    The same goes for Foroohar and her writing at Time or her appearances on CNN.

    Major media needs big change. The examples above represent tiny bits of bait , dangled enticingly to lure new customers and turned-off former customers. That tiny bit of bait sits on the point of a very large hook , however , so if you bite , don’t be surprised at how easily you get reeled in.

    Again.

  6. May 18, 2016 at 6:02 am

    Edward, I cannot give Foroohar or her book the kind of passing grade you do. On the usual scale of A to F I’d give her a C+. She and her book show promise but she still misses the main points. She concludes the book with this, “Despite all our problems, America is still the prettiest house on the ugly block that is the global economy. Our modern financial system made the world what it is today. And if we can build a healthier market system, it could help put the entire global economy on a better path.” America is not the prettiest, but it certainly did play a large role in making the financial capitalism that is at the center of the world’s economy. And the faith that “build[ing] a healthier market system” will put the economy on a “better” path is at best misplaced. She like most people engrossed in economics as a discipline and essential part of life misses what’s going on. Economics is not essential. Hell, it’s not even important as far as the future of the world is concerned. Solving our environmental problems, getting people the basics for life, controlling wars, dealing with crime. These problems cannot be solved economically. Economics might be a useful tool once we have a solution we want to try. But economists do nothing, can do nothing to counteract or resolve such problems. That requires moral choices about sharing, development, respect, concern, and sacrifice. Polanyi may have been wrong about a lot of things but he was correct that the economy is not stand-alone. Its values reflect and are reflected in so called “non-economic” areas. For example, commitment to people different than oneself, racism, xenophobia and nativism, violence, comradeship, and yes love of one’s neighbor. Redistributing wealth/income, changing tax structures, or making “better” markets can fix none of this. And these are the solutions that Foroohar, like Stiglitz, Piketty, and it appears most members of WEA suggest. How’s the old story go? When all you have is a hammer everything looks like a nail. When all you have is professional economics everything looks like a market design problem. Even though Foroohar discusses the moral problems that arise from financialized capitalism she fails to examine solutions for either these problems or the moral failures that allowed such capitalism to develop. And it’s not surprising she fails here. These are concerns that go well beyond the talents and skills of most economists, and certainly cannot even be contained within the foundational assumptions of economics as a social science.

    • May 19, 2016 at 3:02 am

      Ken Z—i rthink i maybe half agree that ‘redistributing income/wealth. changing tax structures, making ‘better’ markets’ cant fix problems like zenophobia, racism, and other non-economic issues or factors. But i i think they are heavily linked or intertwined. In my area raceism and income.sort of go hand in hand but with a ‘non-intuitive’ back bending supply/demand curve—the most rascist/intolerant people of any race/identity (eg ‘white power types, just as back in KKK and slavery days, tend to be most common among some upscale and elite types and also the poor and unemployed, and the same is true for non-whites, though there are at the same time as many tolerant people as intolerant ones in these wealth/income classes and groups)—they cluster at both the low and top end of the income/wealth scale. I think this is true of the BJP in india, National front in england . le Pen in france, and similar groups in germany , italy and greece. There are also the religious parties in Poland, and Russia, Burma (bhuddists vs muslims), other parts of Asia, and Africa have their own own flavors.

      The extra-economic ‘moral failures’ people have seem quite analogous to ‘market failures’ or the failure of the assumptions of ‘rational choice’ and perfect information. People have different moral codes as they do preferences for making certain decisions.

      Why people differ in these ways i attribute largely to cultural norms (see ‘culture and the evolutionary process’ by p j richerson uc davos and r boyd ucla). i dont neccesarily blame economists or any other group—alot of survival is based on ‘satisficing’ (H Simon—a word i learned from my sister who has an MBA from U chicago, paid for by her employer). ‘if you can’t beat em—since u want to based on your moral or other values—join ’em. If u dont give up u will just kill yourself hitting your head against a brick wall.

      i will note that p j richerson, like many other academics i have read, has recevied grants from the billionaire John Templeton Foundation—they also fund a ‘spiritual capitalism’ group. (Noble prizes of course come gunpowder, and zyklon b used in nazi gas chambers was developed by F haber (jewish chemist) who developed poison gases for germany in WW1. his wife divorced him for that—in some religions, divorce is immoral. (I have heard in some others, only males can choose to divorce and they must go through a process –possibly similar to aquiring a Phd and tenure—of repeating 4 times ‘i divorce you’. I hear in some of these religions, since sex out of marriage is illegal, some people just get married for a one night stand, and then divorce. Keep it moral. .

  7. blocke the
    May 18, 2016 at 7:09 pm

    Edward and colleagues, if you want to know why Rana Foroohar subscribed to the rwer and took a lot of interest in our group, read the following email exchange between me and her:

    “On May 17, 2016, at 5:19 PM, Robert Locke wrote:

    Touching bases. Some time ago we corresponded about the state of economics. Do you remember? I think I advised you then to make sure that you look at the dissident economists, like those writing for the Real World Economic Review, and not just at orthodox economists, and I am pleased to see from your book, that you responded to this old professor’s advice. Hurrah!

    Robert Locke

    Foroohar, Rana – Time U.S.
    6:59 AM (3 hours ago)

    to me

    I certainly did! And in fact you are mentioned in the love notes (aka acknowledgements) and footnotes. You were a key part of the birth of this book, which had already reached number 17 on the amazon kist after day one. Thank you for sharing your knowledge and I hope we get to meet in person at some point! Best R

  8. Nancy Sutton
    May 18, 2016 at 7:35 pm

    Who said, “The perfect is often the enemy of the good” ? Is the ‘perfect’ also, often, the tool of the bad?

  9. May 23, 2016 at 5:02 pm

    Foroohar calls for “changing a tax system that treats one-year investment gains the same as longer-term ones,” but I would argue that this doesn’t work with uncertain levels of deliberate inflation, i.e. requires a sound currency. During the periods when the U.S. currency had a stable gold backing, your great-grandfather could put currency in a tin can and when you find it decades later, it had the same purchasing power for you as for him. Not so today. The choice today between $100 today and $100 in twenty years is an easy one — take the money and run (or buy real stuff today, not paper). How could one-year gains not be treated differently than 20-year gains by corporate managers under the existing regime?

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