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America’s hidden pains

from William Neil

We begin with some gross numbers from Das’ Age of Stagnation: the loss of wealth from the Great Recession of 2008-2009. Citing the work of three economists at the Federal Reserve Bank of Dallas (Tyler Atkinson, David Luttrell and Harvey Rosenblum), the figures they put on the loss to the U.S. economy come to 6-14 trillion dollars, “equivalent to U.S. $50,000 to U.S. $120,000 for every American household, or 40-90% of one year’s economic output”. We’ve seen figures of family distress ranging from $20,000-$60,000, largely representing losses in the stock market, which seem on target from direct personal experience. The other factor driving towards a more lasting economic pain are those who lost enough in straight financial terms to forestall market re-entry, matched with a psychological aversion to ever trusting it again. Additionally, pension fund retirement viability was affected by the same dynamics. These factors must be considered, as difficult as they are to quantify, to qualify the otherwise impressive performance after 2010 in the financial markets, they being supported by all the permutations known as Quantitative Easing, American and European versions.   

In the fall of 2015, and in many ways now seeming to be an overlooked clue as to what was about to unfold in the election of 2016, Nobel prize winning economist Angus Deaton and his wife Anne Case (both of Princeton University) caused a sensation in the news. It was because of their research findings disclosing a dramatic rise in the death rates, by 22%, among whites 45-54 years old, among those who only had a high school degree. The dramatic mortality increase occurred in the years 1999-2014. According to the coverage and commentary in the New York Times, this dramatic increase in mortality rates wasn’t caused by the usual suspects – heart disease and diabetes – but by “an epidemic of suicides and afflictions stemming from substance abuse: alcoholic liver disease and overdoes of heroin and prescription opioids”. Professor Deaton declared that “Only HIV/AIDS in contemporary times has done anything like this…”

Additional commentary in the Times’ article, by Dartmouth College economists Ellen Meara and Jonathan S. Skinner, put the findings in further relevant context for our purposes here:

“The least educated also had the most financial distress… in the period examined by Dr. Deaton and Dr. Case, the inflation-adjusted income for households headed by a high school graduate fell by 19 percent.”

On the trail of further hidden economic distress, the Federal Reserve itself has been conducting surveys since 2013 entitled “Report on the Economic Well-Being of U.S. Households”. The most reported finding of these surveys, contained in the formal reports issued now annually by the Board of Governors, was that nearly half of the respondents, 47%, “said they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money”. In other words, almost half of American households have no personal savings or personal financial “safety net”.

As reported in an Atlantic magazine article by Neal Gabler in the spring of 2016, in the heat of presidential campaigning, “The Secret Shame of Middle-Class Americans”, the distress goes beyond the inability to meet small financial emergencies of $400-$1,000, the range covered by the Federal Reserve surveys. Gabler introduces the research of Edward Wolff, an economist at New York University who has found that “median net worth (family net worth) has declined steeply in the past generation – down 85.3 percent from 1983 to 2013 for the bottom quintile, and down 63.5 percent for the second-lowest quintile, and down 25.8 percent for the third, or middle, quintile.”

So we are getting closer now, much closer, to answering two of our key questions: how much economic pain is “out there” in America, and how do we explain the divergence between the good “formal” economic numbers of low unemployment (under 5%) and very low inflation (2.5% average for 2016) touted by the President and his “heir apparent,” Secretary Clinton, and those remarkable pre-election poll numbers showing 70% or more Americans feel the nation is on “the wrong track”. Economist Wolff, from NYU, summarizes the crux of the matter this way: “… the typical American family is in ‘desperate straits’.”

This would be bad enough, the precarious imbalance in American household finances, which must be coupled with what William Greider and John Gray have told us is also a permanent sense of precarious employment and career uncertainty, the result of nearly four decades upheavals in production and distribution methods, and labor markets world-wide. But we have also called attention to the role of cultural upheaval in our search for the reasons underlying the triumph of Trump in 2016. While economists are likely to have a strong inclination to keep the two strands of reasoning quite separate, our contemporary dilemmas and a fuller interdisciplinary methodology calls us to inquiries resting on a broader foundation.

What we have in mind is what author and TED talk guest speaker Hannah Rosin explored in her book and lectures under the title The End of Men: And the Rise of Women (2012). The essence of her argument is that women are eclipsing men in educational attainment, in the ranks of middle management, and in founding new businesses, relying in part on their “traditional” interpersonal skills and sensitivities. We should note, as she does, that this does not mean the end to the glass ceiling still firmly in place for most of the highest institutional perches of the 1%. After all, Satyajit Das, wearing his financial journalist hat for us now, reports that women make up only about 20% of the attendees at Davos, such as it is: the actual historical location, full of ironic portent, for the setting of Thomas Mann’s novel, The Magic Mountain (1924).

The ground covered by Rosin, a skillful public speaker, seems pretty solid; unfortunately for men, this substantial rise and improvement for the freedom and careers open to women, has come at a time when the traditional careers for men in the declining industrial economy have had the bottom fall out.  Thus the dramatic shifting in gender roles which has continued from its start in the 1960s, also covers the decades of demise for blue collar workers, especially in the 1970s, as documented by Judith Stein’s Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (2010) and Jefferson Cowie’s Stayin’ Alive: The 1970s and the Last Days of the Working Class (also 2010).

These books describe, in painful detail, the initial shifts inside the Democratic Party away from labor’s hopeful agenda for a new New Deal as portrayed through the fumbling of the Carter administration, thoroughly unenthused about Labor Law reform, Industrial Policy and Full Employment guarantees, and also Health Care reform. Instead, the new directions were disclosed by mighty efforts for de-regulation of the airline and trucking industries and the decidedly non-nationalist effort to cede the Panama Canal back to Panama. We shall say no more about these complex matters, other than to suggest the dynamics from a very likely scenario: of a husband coming home with a plant closing notice only to find that his wife has received a Small Business Administration loan to open a thrift shop on Main Street in Youngstown, Ohio.

Youngstown, Ohio was ground zero for the disaster which befell the entire Mahoning Valley: the demise of the steel industry, the shedding of 50,000 jobs, 1975-1985. George Packer, in his 2013 account The Unwinding: An Inner History of the New America, tells us that

“if the institutions and the people who led them had understood what was about to happen to Youngstown, and then to the wider region, they might have worked out a policy to manage deindustrialization instead of simply allowing it to happen.”

Instead,

“between 1979 and 1980, bankruptcies in Youngstown doubled, and in 1982, unemployment in the Mahoning Valley reached almost 22 percent – the highest anywhere in the country.”

Revealingly, Packer tells of the rise and fall of Youngstown through the story of a black woman’s “survivor’s tale”, a struggle and eventual career success built out of the rubble of her home town. Yet the meaning for the entire country heading into the heart of the Reagan years was crystalized by a former auto worker turned college professor, John Russo, who eulogized the disaster with the epitaph: “The idea that this was systemic didn’t occur.” That sentence was written despite the fine attempt of Barry Bluestone and Bennett Harrison to do precisely that: see deindustrialization as a systemic national economic problem, in their 1982 book, The Deindustrialization of America.

from “Major miscalculations: globalization, economic pain, social dislocation and the rise of Trump”
William Neil          download pdf

  1. patrick newman
    April 1, 2017 at 6:06 pm

    Even the most unengaged must sense that capitalism isn’t working for them and with signs that things will be even worse for their children. All this in enormous contrast to the amazing productive power and productivity of industry and the economy both in a continual organisations and technology driven transformations.

  2. April 1, 2017 at 6:56 pm

    I saw some of the reader responses to Paul Krugman’s column in the New York Times yesterday, here https://www.nytimes.com/2017/03/31/opinion/coal-country-is-a-state-of-mind.html?src=me&_r=0

    What struck me sadly is that some of the most popular were rather cruel, writing West Virginia off – surely one of the most dramatic examples of what William Neil is driving at here – as a lost cause, unreachable unless the residents themselves changed dramatically.

    My fear is that we don’t get a compassionate response to the very divergent fates in our economy – or in Europe – until the grim economic fog falls over the whole society, as in 1929-1932 – and/or, its environmental equivalent.

    Surely the means exist to ease some of the pain – given the enormous storing of wealth and profits in the drawers of the 1%; what’s lacking is the intellectual justification for a more robust social democracy, especially in a reform of labor markets along the lines that L. Randall Wray has indicated in his writings here…http://www.levyinstitute.org/publications/full-employment-are-we-there-yet

  3. April 2, 2017 at 1:11 pm

    For several decades now the 1% have grown even richer by the interest on the debt that the working and middle-classes have taken on to maintain their homes, businesses, and lifestyles. Now that is coming to an end. Many families in the center of the nation cannot pay medical and food bills, let alone take on new debt to “maintain appearances.” And, gracchibros is correct that there is plenty of “scratch” around to make all these families whole and much more. But that’s not coming their way so long as the market, industrial, legal, and tax rules are rigged as they are now to favor moving wealth up but not down. Passing the ACA was a miracle, but passing the increases in taxes required to make it work are even bigger miracles unlikely to be repeated with the current, or for that matter any Republican-controlled Congress. I know the history of how 20th century “conservatism” developed. Still amazes me that something so un-American (speaking historically, especially in terms of the nations founding documents and institutions) could develop. But then I remember the history of slavery, exploitation of Indigenous Americans and 19th century immigrants in the USA and see the “new” conservatism fits into that pattern. George Thayer published “The Farther Shores of Politics” in 1967, in which per one reviewer “… the author commendably works his way through the miasmic drear of inhospitable political wastelands where for all the earnest if aeurotic input, few satisfying harvests are ever made.” The KKK, the Nazis, John Birch Society (Koch brothers’ father was president), Christian evangelicals, tax cut party, etc. are all there, on the fringe. Today they are the mainstream. No help for any honest, ordinary, good citizen in these “crazies” (George H.W. Bush’s term). I hope it’s not too late to stop most of the damage the crazies can cause. And just so you know, yes Donald Trump is a crazy.

  4. April 2, 2017 at 2:56 pm

    It’s always good to hear from Ken Zimmerman, and in a broader context, even the NY Review of Books has weighed in on the “Lessons from Hitler’s Rise,” by Christopher R. Browning in the April 20, 2017 print edition of the Review, and supplies a pretty fair weighing mechanism to sort out the similarities and the important divergences: that so far, Trump has no armed militias killing the opposition in the streets, and American democratic institutions, especially the courts and a sizable chunk of the civil service have found backbones which have surprised us, and probably Chris Hedges even more. I say this with the caveat that this is all unfolding in “peaceable” economic times – which as Wm. Neil points out, hardly extends to all the American people. Starting off where he finishes the piece: what will happen when the next recession or worse, a new financial panic hits?

    What Neil has laid out for us suggests a broader schema to me; and perhaps it was just the size limitations of his essay amidst the other good writings in the double issue of the magazine that caused him to leave it out.

    Let me suggest a broader schema for sizing up the importance of “America’s Hidden Pains,” and what it means for the election of Trump.

    There are three main competing ideologies on the left, most specifically in America, and others can sort out the relevance of these categories for Europe…They would be in order of political coherence and influence: environmentalism, feminism, and what I will call the “traditional left economic project,” of empowering the working class either in a new New Deal or something beyond that. Never alone, of course, needing allies…and perhaps competing movements can or can’t supply them…

    All three operate under two other vast complicating settings: under the dominant Neoliberalism-Austerity paradigm in the West’s Globalized world economic view, and also within the competing “blocks” within the Democratic Party, and I’ll list those because the complications and fragmentation implications are very important: feminists, environmentalists, labor, LGBTQ forces, black Americans, Hispanics, civil libertarians, peace activists and of course, corporate America, which includes the leading forces there, Wall Street and Silicon Valley…and the chief importers…Wal-Mart and Target (representative).

    The great irony of Trump’s election is that for most environmentalists and feminists, the working class has been eclipsed in practical and theoretical terms as anything they want to deal with…sorry, Van Jones, the Green Collar Economy has been eclipsed by your role as a CNN commentator. I would call reader attention to three articles, among many admiralbe others in our two new magazine editions, Volumes 78 and 79. There are many, many fine pieces in both, for economy’s sake of the arguments here, Marshall Auerbach’s on the importance of “free trade” to the Neoliberal project, and because of its disproportionate impact upon the working class and in contemporary disputes in the pages of this organization journals…and elsewhere, in freshwater and saltwater citadels…let it stand in for the hazy smoke arising from the ruins of the historical left project…and the other two articles..by women economists who are totally new names to me, Julie Nelson at U of MA, and Susan Feiner of the Univ. of Southern Maine…both of whom have articles in Issue 79: “Nature abhors a vacuum: sex, emotion, loyalty and the rise of illiberal economics and Pussynomics: regression to mean…respectively, both of which are very much worth reading.

    Having set this as a background, let me lay out the main premise here, and I hope to be able to do it fuller justice in future elaborations. And the premise is that the Election of Trump was forged, however outrageously and ripe with future betrayals for his poorest supporters, on the level of economic pain (and the psychological and physical pain laid out for us by Mr. Neil in this posting) in the broader society, which the Neoliberals could not recognize much less fully appreciate, and that the working class’s importance is the ripest and cruelest of ironies for all three of the these competing ideological forces within the Democratic Party, and more broadly in the West: economic pain, in the sense of the old traditional left project, did in the end prove its theoretical merit, but not their ideological hopes, since much of the working class, men and women, who bothered to vote, swung right and not left, some voting against the corporate leaning-in feminism of Ms. Clinton, whom Tom Franks pointed out with biting sarcasm, had her philanthropic projects for Third World women beautifully wrapped around the wishes of major donors, Silicon Valley and Wall Street non-profits projects and new bank accounts and micro-lending entrepreurship sallies..And for the greens, who have a great deal of trouble relating to the working class because they have no clear economic policy of their own in the wake of the demise of Van Jones and the dashed hopes for “Green Capitalism,” (which Richard Smith laid out for us in “Green Capitalism: The God that Failed”)…they saw that “failing the grade” in terms of economic vision and program was a major factor in handing those on the economic bottom to the largely illusionary schemes of Trump.

    The two women economists, who label themselves as feminists, ecologists-green leaning, and it seems to me, on the social democratic left of the profession, help make my broader point here: to me they are voices in the wilderness, said with regret, because they have the correct blend of what we need to begin to forge a new comprehensive left ideology or at least integrated program, but Sanders-Clinton-Trump dynamic proves just how difficult it is.

    We live in a broader world, a deeply fragmented world of intellectual silos and perspectives that don’t communicate well, if at all, across the boundaries, and the Democratic Party is a more special case to prove the broader point. There is no greater gap in modern American life than that between lean-in entrepreneurally successful upper-middle class women and downardly mobile middle and working class white men, and the medical statistics referred to my Mr. Neil make the urgency and poignancy of the crisis – and the gap blare out the point.

    There has been a vast miscalculation by the Democratic left, esp. among greens and feminists that their causes alone can carry a broader challenge to Neoliberalism off successfully; events inside the Dem. Party and the broader national elections (esp. in statehouses) have proven them decisively wrong…they under-weighted the historically rooted accuracy, given broad enough swaths of economic historical time, the notion of the old traditional left that the economic structure – and its success or failure in producing abundance and fairness would be the broad determinant of politics…and events had a cruel ending for even those (and let David Harvey stand in as perhaps the best representative of this tradition today) who have steadfastly made this argument (Harvey especially in “The Conditions of Postmodernity”)…good chunks of the working class having voted for the traditional left’s worst nightmare.

    And now that historic left burden must take up a new and perhaps even more difficult challege: meeting the material and fairness needs of the old left and humankind, without destroying the systems of nature which some would argue are the more fundamental and crucial underlying “infrastructure.”

    A Promethean task, even more so given the results in 2016.

    Let the fireworks begin. And when they burn out, the dialogues begin. We’re not even close yet.

  5. April 3, 2017 at 5:20 am

    One of my jobs has been to lecture, cajole, and discipline CEOs. I earn a lot of money for this. I’ve always approached that job as a social scientist and historian. CEOs play roles established by the historical interplay of many cultural factors. Including, money, democracy, business, religion, and conflict. These interacting factors effected every part of American life. Not just CEOs and their companies. So, let’s consider the history of these interactions in America.

    Religion has always played a major part in American life. Many immigrants came here for religious reasons. To escape or find a place for their version of Christianity. And it was mostly Christianity. Judaism played a small part and Islam played no part in US life until the last 30 years. So, there are lots of religious descriptions of the good and moral life. Jimmy Carter gave a speech in 1979 that came to be labeled the “malaise” speech, though he never mentioned that word. Sean Scallon in the “American Conservative” calls Carter’s speech a “conservative manifesto.” Per Scallon, Carter exhorted Americans to self-sufficiency, discipline, sacrifice, conservation, independence and “the striving for meaning and purpose beyond material wealth.” Carter presented the nation as a community bonded by spirituality and strengthened by facing adversity together. But in the election of 1980 which candidate for President was labeled “Mr. Conservative?” Not Jimmy Carter, but rather Ronald Reagan. Jimmy Carter faced another conservatism – the apocalyptic redemptionism of Ronald Reagan (via Jerry Falwell and evangelical Christianity). Those who God chooses to save are saved, not by works but by faith. That faith was triumphalistic, in-your-face, and other-worldly. Reagan also tapped into another strain of religious life, the Bible selling confidence man. He was after all first and always an actor. And unlike Carter he took much of his message from the movies that ordinary Americans used to help define their worlds (e.g., The Deer Hunter). Like Capra’s movies these were unapologetically patriotic, a stream of civic virtues going back to the folk stories about George Washington, the Erie Canal, and Manifest Destiny. Inherent in these is strong nationalism, racism, and xenophobia, as well as a relatively rigid class structure. Their economics were at the root very different. Carter, though he would never utter these words was and is a Christian Socialist. In sum, Carter is a conservative Christian Socialist. Common in Europe and more common in the US than is thought. I’d place Eisenhower, Kennedy, and even Barack Obama in this category. Reagan followed an alternative economic route, also informed by religion. Carter abhorred capitalism as much as he did divorce and abortion. Capitalism destroys community and work-ethic. Reagan, on the other hand was part of the Orange County conservative movement – pro-capitalism, anti-government, anti-regulation, and defining freedom in terms of libertarianism. This too has religious roots in the stoic Calvinism of the Puritans. It is said that John D. Rockefeller treated his work as a religious calling. He was personally reserved, quite, humble, and “God-fearing.” In business, he was devious, aggressive, malicious, and an incessant liar. He cheated, robbed, and bought politicians like lollipops. He didn’t compete with his rivals. His goal was to destroy them. This is the business-ethic that’s common today. It’s the same one that’s help explode economic inequality and send workers and the American economy into a tailspin.

    Must stop here, but you get the idea I hope.

  6. April 3, 2017 at 2:37 pm

    I liked almost all of it Ken, except the descriptions of Carter’s “political economy.” Carter was part modernist (nuclear scientist/engineer, Naval Academy graduate, submarine fleet service) and part Evangelical/fundamentalist. But the assessments Neil refers to his longer essay – by Judith Stein and Jefferson Cowie paint a very different picture of Carter, although I do think you got the August 1979 speech correct…the late Christopher Lasch, who was one of the many academics invited to treat upon the troubles of the national soul, later complained that Carter went right, not left in terms of the framing of economics that Lasch presented. Lasch himself got in trouble, deep trouble with the cultural left because Lasch was presenting a defense of the traditional family to go with social democratic ideas on the economy. Lasch was one of our more profound writers, but not easy…and is more famous for his cultural works than his critique of Progress in what I think was his best book…”The True and Only Heaven….”

    And Ken, thanks for sharing your unique job with everyone, very much appreciated. And since you have this “avenue” of input, please consider adding, if it’s not there already in your “syllabus,” James A. Morone’s “Hellfire Nation: The Politics of Sin in American History.” It’s brilliant and crucial to making sense of our moralisms, and deeper and better than George Lakoff’s “Moral Politics,” which, though, did get the morality behind Neoliberalism correct.
    As a recommendation, I was astonished to see it listed in one of the essays’ footnotes that Yanis Varouvakis wrote before his Greek experience, posted at Naked Capitalism. That told me a lot about how Yanis wasn’t a conventional thinker – or economist. Very useful, Hellfire nation is, for explaining the German economic mind, despite the social democratic aspects – the banking mind especially. The comments made in the German press about Greek habits could have come right out of Hellfire Nation and the American setting, upper middle classers like Charles Murray complaining about the values of the nether world down below them.

    I’d better stop here. Share some more, Ken.

    • April 5, 2017 at 9:53 am

      Categories like left/right, conservative/liberal, married/unmarried, man/woman, etc. became both much less useful and for many irritating during the 1970s. The nation was in crisis – culturally, sexually, scientifically, in education and business, and in the family and interpersonal relations. People wanted leaders who could protect both internal and external security, protect their jobs, homes, and families, and restore order. This was of course impossible. Carter tried just about every approach; had little success with any of these but refused to lie to Americans about their likely future. Reagan was a “one trick pony.” He had one solution to offer – tax cuts aimed mostly at the wealthiest Americans, deregulation, and downsizing government, which he translated as “getting government off the backs of Americans” so they could be fully free. I honestly believe he never recognized any of the very likely downsides of these proposals. But still he lied to the Americans public consistently about how these proposals would change their lives. His economic policy was quite simple – ignore manufacturing and make the USA the financialization center of the world. Wages decreased, taxes increased, and chances for social mobility went down for American working- and middle-classes. Trump is simply Reagan 2.0. Reagan was a better huckster than Trump, however. Which allowed Reagan to remain relatively popular while his policies gutted American education, health care, the arts, small communities and farms, American families, and public goods generally. Reagan also began a class/cultural war which has only grown more intense and bitter over the subsequent years. And he wasn’t even the decisive leader he “played in the movies.” Witness the “personal” feud he fought with Sandinista leader Daniel Ortega of Nicaragua using government money and resources. It didn’t matter, however as Reagan “appeared” decisive. Neither Carter nor Reagan worried much about the “working” class since all the elite forecasters, including economists projected it would be gone in a decade or two. The irony of all the so called “solutions” Carter and Reagan, and all those who followed them offered that failed is that a solution was all the time directly in front of them and already functioning. In the US as in the UK, France, and Germany after World War II government operated by career professionals (bureaucrats, not a pejorative term) had functioned well married to a democratic polity. This is the “administrative state” Trump and Bannon are working to destroy. Reagan and Trump both “play” the role of anarchist – tear it all down so we can build better. I worry about that the theatrical story of the actor who comes to believe he is the character he plays. That happened with Reagan. Will it happen with Trump?

      • robert locke
        April 5, 2017 at 4:04 pm

        Good historical analysis

  7. April 5, 2017 at 4:31 pm

    I agree Robert; perhaps my perspective is a little slanted, at least it was then as I lived the 1970’s as a social worker and a reader and “organizer” for Michael Harrington’s Dem. Socialist Organizing Committee in New Jersey. He’s the writer, “fellow” socialist that Bernie Sanders never referred too. Michael of course was trying to supply a coherence to that fragmented decade which it did not have. The thought just occurred to me after re-reading Ken’s latest comment, that in some ways for the U.S., the 1970’s were a Weimaresque decade of decline (Rich Perlstein told us Nixon admitted it: claimed he was the one to “manage it”) and culminated in a “restoration” of the lost glories of 1945-1970…

    Contemporary American citizens can still benefit from reading Peter Gay’s “Weimar Culture” and the nation could as well from some re-runs of “Cabaret.” All our little self-protective intellectual currents and social configurations (my list of the constituencies of the Dem. Party) talking past one another as the broader, deeper political economy heads toward the brink…we living through the equivalent of the Weimar “recovery” in 1925, which did not stabilize the internal politics which were still driven by the deep pains of military defeat, liberal-left revolution, catastrophic inflation…perhaps some of the things Mr. Neil was driving at in his essay, the gap between “official” economic statistics (the big two) and what he wrote about…and which Stephanie Kelton and L. Randall Wray also have suggested in their work: that we’re 20 million jobs short of the projections for the economy’s growth curve pre-Great Recession, and the “write-down” of those expectation have shaped our expected “gratefullness” towards President Obama (and the Clinton campaign theme…)

    Weimaresque because of the economic pain – two if not three recessions, the beginnings of dramatic de-industrialization in the Rustbelt – unrest in the black ghettos; on the cultural front the continued rise of feminism and sexual revolution…the decline of the Catholic Church as a value anchor…for the working class…(the old urban ethnics of the New Deal coalition were losing two important anchors: in religion, and their daily industrial economic rhythms…we don’t think about them and that decade in this way…but that was a good part of my critique of Chas. Murray’s portrayal in “Coming Apart.”

    For economists of the left, there was no really clear, coherent answer to stagflation, as the tortured response of John Kenneth Galbraith showed, as recounted in Parker’s excellent biography of him. Not a bad way to follow the evolution of economic thought in the 20th century – to read a good bio of JKG…Galbraith’s solutions all led to greater state intervention into markets: to break up oligopolies, give America a full and robust social democratic safety net, and to employ wage, price and profit controls…he certainly did not make organized labor happy with his response that they and their contracts pegged to cost of living were a major part of the cycle…

    Does any one here dare say “falling rate of profit?” Part of the endless cycle between the left and right ever since the Industrial Revolution, and some would say the French Revolution…part of Polanyi’s “double movement?”

    I still see Carter as on the center-right economically and culturally. His infamous malaise speech from Aug. of 1979 was heavily moralistic, not a critique of the faltering economic system, and it fits beautifully into James Morone’s schema in “Hellfire Nation,” his rhetorical narrative of “When things go wrong (usually economically wrong) who do we blame: the individual or the system?” Carter blamed faltering US individual character and national “character,” not capitalism coming apart from its Bretton Woods “synthesis.”

  8. April 7, 2017 at 6:51 am

    All ways of collective life, societies, have an expiration date or dates. All societies eventually fail and sometimes fall. But seldom are any totally erased from the planet. The US during the 1970s was facing its many failures, uncertainties, lies, and things just ignored. Many from the very beginning of the nation. The main issue with such crises is how they are resolved, if they are resolved. The process itself is disruptive. The bigger question is the final form of the resolution. In Germany in 1933 it was the National Socialist Workers Party, Hitler, and World War II. The war’s end led to the reorganization of Germany in just about every area. It only cost about 60 million lives and about $3 trillion 1940s dollars. Added enormously to world-wide pollution and resource depletion, and began an arms race and cultural war that still haunts us today. I talk with Americans everyday who claim Ronald Reagan saved us from the crises of the 1970s, from the Russians, from liberalism (progressivism), from the overreach of our own government, and from the attacks on Christians in America. Turns out Reagan and those who followed in his path didn’t stabilize the nation. They simply continued and expanded Reagan’s version of the “cold war,” creating one new crisis after another. Gracchibros, you’re quite correct on the part the left played since the 1970s. The left in America, such as it was had little effective to say or do about any of this. It mumbled a lot but never developed an effective or popular strategy to stabilize America. Per Bertrand Russell, “Man is a credulous animal, and must believe something; in the absence of good grounds for belief, he will be satisfied with bad ones.” The left provided no good grounds; the right provided bad ones; and the plutocrats took the nation without breaking a sweat. And the saddest thing is that many Americans either don’t know the nation is now a plutocracy or refuse to acknowledge it. This is not a left/right thing or even a conservative/liberal thing. It is a maintain self-governing democracy or live within an oligarchy thing.

    Gracchibros, I think your conclusion about who to blame – individual or system – is incorrect. I blame both. Individuals only exist within collective life, and collective life only exists because of individuals. They are two sides of the same coin. Many individuals are oppressed. Which means that those who are not, like privileged social scientists have a duty to point out inconsistencies and lies, and insist they be addressed. As the system changes it adjusts to these pressures. How it adjusts in very important. The changes sometimes take years, sometimes only a day. Following Russell, will these be good or bad changes? Trump is a change agent. Just not a good one. Will economists and other social scientists counter his bad changes with good ones?

  9. April 7, 2017 at 2:27 pm

    A thoughtful response Ken. It’s part of the intellectual inheritance of the “West,” all our dead white males, and now the leaners in are “buying in,” this tension between individual responsibility and all that “Protestants” and Republican Right types mean when they say “character counts” ( this always seemed to me to rear up in their not so subtle attacks on the Kennedy’s…); in the 19th century in the US, no matter the glaringly obvious sequence of intensifying systemic economic crises, dragging more and more citizens into their fallout who had nothing to do with the triggering crisis: speculation in land (and slaves), railroad bonds…Western grazing lands…eventually the systemic problems had to be recognized in the higher financial circles…leading to the Federal Reserve…and then it was impossible to evade the system’s collapse, 1929-1933…although lets give Amity Shlaes credit for timing and intellectual brazenness with her 2007 re-write of the Great Depression (“The Forgotten Man…”)…to slant the account back towards individuals and their non-governmental coping mechanisms, everything from Father Divine to the founding of AA.

    Let me clarify what I said about James Morone’s fine book, “Hellfire Nation.” He rightly concludes that in terms of long historical runs in the US, in terms of assigning causality to economic disasters, and other troubles (excessive drinking…abortion, the whole range of social-moral “causes” ) we are mostly an “individual responsibility” nation and the Right in the US has always had a good time picking apart legal defenses of the indefensible by shining a spotlight on “deterministic defenses” which take away moral responsibility and individual “agency” from the charged party. Fair enough, we will never answer this with finality, the extent to which individuals are in charge of their own fate; certainly the social sciences and psychology push towards the individual determined by family, economic and environmental circumstances to the point where their sense of agency appears to be a grand illusion…I invite readers to review some of the biographical material on the life of Charles Manson, the infamous cult leader, and then the cultural debate along the lines I’m sketching out here…spent some time in West Virginia…which many cite today as the epicenter of angry white working class citizens…moving Right, not left.

    Perhaps I can clarify where I come out on this by saying I veer away from a
    “universal income” as part of the answer to our growing inequality and hidden economic pain from disguised joblessness and underemployment: I believe work with a common purpose, with a range of choices to give individuals some genuine say in what they will build, is the better solution for the society and the individuals. A new CCC/WPA, with locally designed projects with full citizen participation, federally or regionally vetted and funded…

    I think you know all too well the intellectual and moral obstacles in getting there. It’s not the answer, of course to all our troubles, but it would be a constructive start. Our readers surely know that in the US there are many worse rising schemes to achieve fuller employment.

    • April 9, 2017 at 9:38 am

      Gracchibros, all this focus on individuals is rather ironic regarding to homo Sapiens. Homo Sapiens only exist in collectives. In fact, its brain is structured to work in tandem with others of its species. Some Anthropologists call the homo Sapiens’ brain communal. Because of homo Sapiens especially developed imagination (what’s usually given the name “human reason”), humans created and shared many intellectual notions – government, agriculture, money, and, of course, “individualism.” But these were only created in communities. When Paul Ryan speaks of “individual liberty” he is talking about a concept shared through a human community, not invented by some “individual” human. It’s either a sign of his ignorance or a tribute to the fierceness of his attachment to this particular communal notion that he blindly ignores how it was created and how it endures.

      Humans’ greatest strength is they can imagine many things that do not exist; in fact, cannot exist (e.g., unicorns). But this is a two-edged sword. Humans sometimes create inter-subjective imaginings for useful and beneficial purposes (e.g., money) which threaten the foundations of relationships and traditions (religious, political, economic, etc.) upon which human communities have rested for at least 70,000 years. For example, when humans relate to one another through money, they stop relating to and trusting one another. And, instead relate to and trust money. In simple terms, this eliminates any relationship to humans that have little or lesser money. In even simpler terms, I can trust and work with you if you have money. If you don’t, I don’t want to be associated with you. Any society based primarily on money cannot long endure for money supplants the forms of relationships human community and survival need. You capture well such necessary relationships in your comment, “I believe work with a common purpose, with a range of choices to give individuals some genuine say in what they will build, is the better solution for the society and the individuals.” Just remember that individuals are merely abstractions from communal life.

      We often speak of employment. That’s an abstraction from money. The belief is that to earn money one must be employed. A better way to approach this, in my view involves two parts: 1) working with other humans cooperatively; 2) deliberately focusing on activities that strengthen rather than weaken human communities, including controls on money and its uses.

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