Looking below the surface

Posted: 29 February 2016 in Uncategorized
Tags: , , , , , , , ,
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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.

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