Tuesday, November 25, 2014

Watching neoliberalism crash and burn

Any American who does some international travel with anything like an open mind will soon discover that most people in the rest of the world have better educations because they worked harder in school, speak more languages, and have a better grasp of their place in the world because they know more history and geography.

I remember the night I had this reality hit me in the face like a bucket of ice water.  It was early July 1970, Ostend Belgium.  I had been in Europe for about three hours and was spending my first night in a youth hostel.  I was nervous and pumped in my determination to not be an ugly American.  I figured our war against the Vietnamese pretty much covered that topic—I certainly did not want to add to the problem.  I wandered down to the common room where young travelers from around the world had formed several informal discussion groups.  The topics seemed to include getting by on the cheap and potential interesting destinations.  And there was one on world events with a heavy doses of the sexual, music, and cultural revolutions, 1968, and the biggie—Vietnam.  Yes indeed, I chose to join the group debating world events.  Since I had spent nearly two years trying to figure out an appropriate response to USA warmongering, I thought I could bring some insights from the peace movement.

As someone who had spent most of my life being the most informed guy in the room, I had few doubts about holding my own.  But within minutes it became abundantly clear that in this room, I was the village idiot.  At first I didn't like it at all.  (In fact, I disliked it so much I would spend the next forty years reading a least three serious books a week trying to "catch up")  Then it dawned on me that if I really intended that this trip was going to be a learning experience, I should be delighted my "teachers" were so smart and informed.

That summer, I spent a lot of evenings in youth hostel common rooms marveling at the creatures who had obviously taken their high schools more seriously than anyone I knew.  I already knew MY high school experience had been a grotesque waste of time—now I saw the results of all that goofing off.  And yet, I came from the superpower.  Our economy was so powerful it meant that if one was careful, it really was possible to tour Europe on $5 a Day, as the book claimed.  We were the folks who just put men on the freaking moon.  And yet, students my age were not responsible for any of that greatness.  Whatever had allowed our forebears to rise to the top of the economic pile was not in evidence in our American Graffiti behavior.  If what was on display in those common rooms that summer was typical, there was absolutely no reason why our stay at the top of the heap was going to be anything but short-lived.

Being rich makes you lazy.  And careless.  And while there was plenty of poverty in USA, 1970 was a year when USA was as historically rich as any nation in history.  If I the son of an impoverished rural clergyman could be making a three-month grand tour of Europe, then we were rich.  We were so rich we didn't even have to think about why we had it better than everyone else.  We didn't have to think about anything serious at all.  We would become the first generation in history that thought a meaningful life could be had by indulging in an infinity of entertainment and play.  Veblen's Leisure Classes had become nearly universal.  We goofed off in high school because we had come to believe that goofing off was life's goal.

Unfortunately, the real economy does not do well goofing off.  And so the fall from economic grace gains speed.  Remembering what I saw in 1970, I am not the least bit surprised.

American Decline To Accelerate?

by Peter Radford on November 10, 2014

This is off topic:

I have a number of American friends who are Republicans. For years they have berated Obama for a lack of leadership. They consider him arrogant yet ineffectual. They blame him for what they perceive as a decline in the power and prestige of America.

This is twaddle. But it is commonplace.

My reaction is thus:

If there is decline it is an internal rotting away of its vaunted middle class. It is a neglect of its infrastructure. It is a loss of ambition. It is a dumbing down of its politics.

This began in 1980 and the ascension of Reagan and his economic agenda which was a deliberate redistribution of both risk and wealth within the economy. Reaganite policies were designed to shift “responsibility” – aka risk – onto the shoulders of the citizenry. They were designed to limit the influence of government. They were designed, consequently, to heighten the ability of private enterprise to accrue, uncontested, a greater share of aggregate wealth. The goal was to create a harsher, more competitive, and less certain environment for the people. It was a pro-business and anti-social agenda from the outset.

The policies were a great success. Business profited by instituting a full range of ideas and strategies that were, themselves, derived from the extreme right wing economics of people like Hayek and Friedman. Business schools propagated the ideas with gusto. Newly minted managers implemented them. They re-shaped the economic landscape in the pursuit of shareholder value. This meant eliminating job security, reducing wages, cutting staffing levels, outsourcing and offshoring functions, and squeezing benefits. It was an all-out attack on the middle class.

The result was easily predictable. None of the counter balancing effects that right wing economists expected occurred. None. That too was predictable. Right wing economics is a naive and utopian illusion constructed to cover and permit a shift in power within society. The market, which they predicted would step in and mitigate any anti-social consequences of the Reaganite program, simply failed to do so. Indeed it was the mechanism enabling those anti-social consequences. It amplified them by successively encouraging businesses to shorten yet further their planning horizons, and by punishing those who failed to adopt cost cutting with sufficient zeal.

This was an era of cynicism and disconnection. It was an era of private equity and hedge funds who purported to shift resources around the economy to more efficient ends, but in truth sought only to aggrandize those fortunate enough to be on the inside. They destroyed lives and futures in order to enrich a few.

So the middle class saw its lifestyle erode rapidly. It was asked to accept more risk, yet it was not rewarded to cover that risk. Its purchasing power was gradually reduced. Its costs were increased. And the services and infrastructure that enabled it in the golden post-war years were allowed to decline both in number and quality.

This is why America is now diminished. At least in its its own mind. It invests less in its future and has lost the ability to use the agency of its government to soften the blows of everyday life.

As this economic rot set in it was mirrored with a steady radicalization of the political right. One aspect of this was the alliance forged by the corporatist wing of the Republican party with evangelical Christian activists. This was an alliance of convenience not ideology. The corporatists needed energetic ground troops to make its cash support pay off at the polls. The quid pro quo being that the corporatists accepted the extreme social agenda of the evangelicals.

The result of this arrangement was an onrush into mainstream politics of a distinctly anti-modern and anti-science set of policy positions. Allied with the rise of cable based news media – especially of Fox news pushing its Murdoch dictated big business positions – this had the effect of stripping away at notions of objectivity or empirical fact checking. It became possible in American politics to create facts rather than to observe them. This, in turn and coupled with the Reaganite message of anti-government rhetoric, infused the Republicans with a series of positions on issues that are radically out of step with the world beyond its shores.

America has lost faith in science. It is steadily reducing government funding for long term high risk scientific research. It has adopted an ambivalent perspective on issues such as alternative energy sources and environmental degradation. Indeed, the Republican party is steadfast in rejecting all progress on those issues. The long term consequence of this anti-science stance on the right is that America will inevitably cede its post-war role as innovative leader. It is another case of sacrificing the long term for some short term gain. And, please note, our remarkably short term driven business sector will not fill the research gap: the profit potential is too tenuous. The Europeans, Chinese, and others will take over as global research leaders.

Which brings me to where I ought to have started.

One of the consequences of the Republican win in last week’s elections is that leadership on various Congressional committees will now change hands. Key amongst these is leadership of the Senate environmental committee which now seems destined to go to James Inhofe, the senator from Oklahoma. He is a committed denier of the truth of global warming. He authored a book – “The Greatest Hoax – How the Global warming Conspiracy Threatens Your Future” – claiming that global warming is a hoax being played by insidious anti-American elements, including left leaning scientists, who want to undermine the traditional American way of life. His position on global warming is that it is impossible, and arrogant, to imagine that mankind can have an impact on the environment because “God’s still up there” to oversee everything. This is the man who will represent the U.S. at 2015′s international conference on global warming.


If we need a measure of why it is that America may be losing its prestige or its world leadership, we need to look no further than Inhofe. He is an anti-science fool. He holds a key position on one of America’s top scientific committees. The irony is exquisite. How can anyone admire or respect a nation that puts up a blockhead as a leader in such a position?

If we need to measure how far America is declining perhaps we need to measure how many key leadership positions here are filled by Inhofe like characters who live firmly in the past and deny the existence of the very problems they are supposed to be solving.

Leadership does not begin and end at Obama. It extends, especially now, to within the Republican party. That, I submit, is a greater source of our decline than anything else.

And don’t get me started on Paul Ryan and his total inability to do basic arithmetic. He is our new Budget guru. more

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