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Monday, December 20, 2010

Is Krugman Mistaking E-conmen for Economists and Zealots for Zombies? Is Obama?

Krugman declares himself mystified that free market fundamentalist economists and policymakers who tell the very rich exactly what they want to hear -- namely, that it (the economy, the whole of society, really) is truly all about them, and so of course that they should pay no taxes and face no regulations and that when they misbehave and fail they should be insulated from consequence and everyday people beneath them should have to clean up their messes for them and foot the bill -- still shape the agenda even when their theories fail and fail and fail to capture reality or anticipate outcomes.

Of course, what would be truly mystifying is that anyone would be mystified by any of this. And to be sure Krugman isn't really mystified by it at all. But it is somewhat mystifying that he seems to think any rhetorical advantage comes of pretending otherwise, and that, finally, is the thread I want to tease at a little in the ramble ahead.
When historians look back at 2008-10, what will puzzle them most, I believe, is the strange triumph of failed ideas. Free-market fundamentalists have been wrong about everything -- yet they now dominate the political scene more thoroughly than ever. How did that happen? How, after runaway banks brought the economy to its knees, did we end up with Ron Paul, who says “I don’t think we need regulators,” about to take over a key House panel overseeing the Fed?

I certainly hope that this prophetic fancy does not come to pass, because if it does we can be sure that as these future historians are scratching their heads the next raftload of future market fundamentalists, libertopians, and austerians will be busily crafting the next disastrous cycle of the zombie minuet to which Krugman is drawing our attention. It seems to me that in the brief space of these few opening sentences Krugman has already made three key mistakes in so framing his case and that these limit his capacity to address the phenomenon that so rightly concerns him.

The first mistake is to describe the slogans and sales-pitches to which market fundamentalists make endless recourse as "ideas," as in Krugman's grand phrase "the triumph of failed ideas." My question is whether it is right to say that market fundamentalists are actually having ideas, properly so-called? When it occurs to a scam artist to sell the poor widow swampland with a misleading glossy brochure is that an "idea" he is having, really? Commercials on late night television hawking energizing "power bracelets" quite profitably reprise center of gravity tricks used by hucksters for centuries, but is it right to consider the pseudo-scientific jargon and new age imagery that freshly embellish these old carnival tricks "ideas," exactly? When a grifter crafts a Ponzi scheme he would scarcely be mistaken as setting out on a good faith debate on the merits of a commercial proposition, but, interestingly enough, when a Republican describes, yet again, as a Ponzi scheme something that palpably is not one, namely Social Security, just because he wants a hand in the looting that would follow from its dismantlement, we seem to find it less easy to grasp the grift for what it is. I believe it pays to think more deeply about what is afoot when we make this terrible mistake.

Republicans like to peddle their "Starve the Beast" austerity measures and safety-net dismantlement proposals by way of false analogies between the sensible frugality of household economy in tough times and the senseless refusal of the stimulus of last resort of public investment and assistance for the unemployed. When they do so should those of us who know the analogy to be terribly misleading focus on the fact that it is surely true that many folks who swallow the false analogy are simply economic illiterates who haven't been taught what initially seems a counter-intuitive idea demanding a leap from microeconomic to macroeconomic assumptions? Or should we focus on the fact that it is just as surely true that many politicians who are offering up the false analogy for these illiterates to swallow are doing so precisely because they can sell what they're after by sowing such confusions? That at least some of the offending politicians are illiterates, too, is neither here nor there if what matters most about the offending discourse, after all, is its opportunistic efficacy to particular political ends rather than its falsity as a candidate to draw a warranted consensus as a description of some matters of fact.

This leads me to Krugman's second mistake, in my view. To return to his grand phrase "the triumph of failed ideas" it seems to me that we should question not only whether we are right to treat opportunistic grifter gambits as the sorts of things we treat "ideas" as being (that is to say as good faith efforts meaningfully to model or narrate or otherwise accommodate shared problematic experience of the world) but also that we should question the standards on the basis of which we describe these gambits as "failed" or not.

The many ways in which market fundamentalist pieties were false and facile throwbacks to pre-Keynesian economic illiteracy were already very well known when one Republican presidential presumptive, George Bush, pere, decried such pieties as they fell from the lips of another Republican presidential presumptive, Ronald Reagan, in what always seemed to me a rather racist turn of phrase, "Voodoo Economics."

For those who grasped the substance of Bush's critique, the implementation of these ideas in the debased Reagan era, in the subsequent debacle of the Gingrichian "Contract on America," in the consummation of Movement Republicanism in the killer clown administration of George Bush, fils, and in this latest TeaBag aftershock have racked up a fairly shattering record of policy failures: from the world wide collapses of deregulated enterprises run predictably amok, to deficits ballooning in the face of endless tax-cuts like the corpses of civilian casualties in our unpaid war adventures, to perniciously anti-democratizing concentrations of wealth as costs and risks were externalized while elite profits were privatized and valorized, to millions of potential partners in the work of civilization lost to neglected poverty, illiteracy, disease, and distress as public investments in the general welfare were slashed and slashed and slashed…

But to the extent that what was wanted most of all, all along, by those who advocated free market slogans was precisely such wealth disparity and concentration, the re-consolidation of elite and incumbent privileges lost to the New Deal and Great Society programs, one need only look at declining membership in labor unions, one need only look at the deregulation of industry after industry, the privatization of service after service, one need only look at the flabbergasting accumulation of wealth by the top five percent and the top one percent of that top five percent of individuals as compared to the flat-lining of purchasing power and the standard of living and security of position of fully two-thirds of the remaining population to grasp that the word "failure" may not be the right word in the least to describe the efforts of elite-incumbent politicians over the last thirty years.

To those who declare the very idea of good government foolish why would the failure of defunded, denuded, deregulated government bodies and concerns be regarded as a "failure" in the sense Krugman intends, rather than a vindication? That this vindication is facilitated precisely through a process in which elite-incumbent minorities are larded with ever more wealth and privilege while insulated ever more firmly from the costly consequences of their recklessness and waste seems frankly the farthest imaginable thing from "failure." Of course, Krugman makes precisely this sort of case himself all the time, if perhaps in slightly less overheated terms than I have done, which makes his habitual recourse to the pretense of shared standards of success and failure all the more puzzling.

Before I go on to Krugman's third mistake, let me quote a bit more from the piece, as he goes on to point out that the disastrous politics of market fundamentalist ideology are hardly confined to the United States.
The free-market fundamentalists have been as wrong about events abroad as they have about events in America -- and suffered equally few consequences. “Ireland,” declared George Osborne in 2006, “stands as a shining example of the art of the possible in long-term economic policymaking.” Whoops. But Mr. Osborne is now Britain’s top economic official. And in his new position, he’s setting out to emulate the austerity policies Ireland implemented after its bubble burst. After all, conservatives on both sides of the Atlantic spent much of the past year hailing Irish austerity as a resounding success. “The Irish approach worked in 1987-89 -- and it’s working now,” declared Alan Reynolds of the Cato Institute last June. Whoops, again. But such failures don’t seem to matter.

Again, it seems to me that Krugman should take care in his application of his own standards of failure and success to those of people on the political right who disapprove equitable outcomes on principle (which is why they are people of the right in the first place). I do not doubt in the least that Alan Reynolds of the Cato Institute finds unjust exploitative austerity measures for precarious majorities that insulate reckless fortunate minorities from consequences to be an "approach [that] worked in 1987-89 -- and it's working now." So, too, selling the poor widow swampland with a misleading glossy brochure might be said to "work" for the grifter. I do think it is perfectly appropriate to think Mr. Osborne's proposals through the figurative lens of the fraudster, but probably it isn't quite right to think of Ron Paul through that lens, and this brings me back to Krugman's third mistake.

Movement Republicanism is a motley coalition of scoundrels, indeed, many of whom are simply unscrupulous characters greedy for money and influence and eager to indulge in opportunistic deception and fraud to get more of what they want, whatever it takes. Others have a surfeit of scruples, but unfortunately of the "worst are /Are full of passionate intensity" sort: say, scions of privilege who truly fancy themselves innately better and more deserving than common people and who regard their frauds as perquisites of position and their lies as the "natural" way of dealing with stupid inferiors or, say, white racists and parochial religionists who fancy themselves keepers of the flame who regard their frauds as all is fair in holy war and their lies as Noble facilitations of deeper truths of conscience in a fallen world.

There are also, here and there, and especially online, True Believers in market fundamentalism as such, among whom I suspect Ron Paul is one, whose consistency suggests real Randroidal (hey, son!) faithfulness more than the cynicism of the opportunists I mentioned first and who actually predominate among the peddlers of "free market" policies and slogans. Probably there is an enormous amount of overlapping and oscillation and interdependence among these right-wing types, and a true accounting of the dynamics of relations, while it would make no doubt for a fascinating if nauseating study, fortunately exceeds the legible limits of this already meandering and bursting at the seams blog-post. What I would emphasize is just that in choosing Ron Paul for his example, right off the bat Krugman actually chose a Republican whose market fundamentalist rhetoric seems to me to be crucially unrepresentative of the phenomenon he is tackling in that it probably comes closer for Ron Paul than for most Republicans to the sort of thing one might actually call an idea, at any rate a rhetoric deployed consistently with some cost and without the usual cynicism -- even if, at the deepest level, I do wonder just what could count as evidence to the contrary for his world view, what authorities he would accept as adjudicating factual disputes with good faith interlocutors, and so on, which is why I described him not just as a believer but as a True Believer.

Be all that as it may, I think Krugman is making an important point in his column in reminding us yet again that the assumptions of free market ideology however compelling they may be in their consoling simplicity, in their appeal to quotidian if inapplicable intuitions drawn from household economy, in their reassurance especially to incumbent elites as to their indispensability and hence the justice of their privileges, these assumptions nonetheless fail utterly to provide guidance for those who would govern in the interests of equity-in-diversity, for the improvement of the lot of people in general, concerned with the sensible administration of human welfare. In my view, however, he pointlessly and preemptively disarms himself in making these points by pretending his opponents judge the success and failure of policy outcomes by the same standards that he does when conspicuously they do not, or that they occupy even remotely the same deliberative field of argument that he does, one involving the clash of arguments and opinions in the first place, when in fact his opponents are essentially just on the make, pulling off, setting the scene for, and testing the waters in anticipation of serial scams to hoard loot for and consolidate the position of the incumbent elites with which they happen to identify come what may, world without end. And, finally, he also misdirects his critique by directing our attention first of all to one of the few holy fools slash useful idiots who uncharacteristically and rather fantastically appear truly to believe, despite all the evidence to the contrary, that whatever passes for "the market" in this historical juncture would happen to govern human intercourse in ways that are both optimally efficient and optimally righteous if only meddlesome government of, by, and for the people wouldn't get in its way of "spontaneously ordering" our affairs. Most Republicans only pretend to believe such foolishness when it is convenient or expedient for them to do so, whatever the consequences look likely to be for others, and it is to the example of such crass opportunists, it seems to me, that we should direct our attention in combating the force of market fundamentalist rhetoric as it plays out so ruinously in the world.

By way of conclusion, let me open up yet another a can of worms. You know, for kicks. Krugman writes:
Part of the answer, surely, is that people who should have been trying to slay zombie ideas have tried to compromise with them instead. And this is especially, though not only, true of the president.

I could go on for paragraphs unpacking these two sentences, but instead I will make just two brief points. I'll tackle the second sentence first. I agree, roughly speaking, with the vantage Krugman is assuming in respect to the president here. Krugman is famously critical of the president, devoting almost as many critical column inches to Obama as he did to the killer clown who occupied the White House last time around. For one thing, Krugman rightly warned the administration from the start that Obama's initial stimulus package was too small and far too weighted with minimally-stimulative tax cuts to be equal to the crisis at hand (always making the even more sensible and rhetorical case that if this deficient stimulus reflected uncircumventable constraints of a monolithically obstructionist GOP in a dysfunctional Senate, then Obama should not have peddled the fantasy of its adequacy but pinned the blame for its inadequacies on the GOP as a way of positioning himself to overcome that obstructionism on the way to making the case for further stimulus down the road). Similarly, here, while Krugman is critical of the president he accuses Obama of compromising with market ideologues when he should be "trying to slay [their] zombie ideas" -- which is better by far than those immoderate critics of the president who seem to assume that Obama is stealthfully championing the ideology himself rather than ineffectually confronting it.

While I think it is unproductive to argue what is in Obama's true heart of hearts since there is no evidence to adjudicate such disputes, or, more to the point, one can find endless "evidences" in support of most attributions of heartlessness or heartfeltness one likes, it seems to me that Obama had a hand in shepherding an enormous number of legislative accomplishments through Congress on a host of policy fronts almost none of which were anything like equal to problems of the moment but almost all of which were reforms in the direction of progress and sense, some of them historic achievements. It seems to me that getting more, and better, Democrats in Congress would result in much more of what liberals and democrats would like to see, and hence now that we are confronted with fewer Democrats in Congress, and among the lost some of the better ones, we are likely instead to get much less and much worse.

The reason why I am wading into all this mess (especially since it is unlikely that there is a single reader in all the world who would agree with every one of the judgments I have pronounced in taking all these many exigencies into some account while failing to so take who knows how many others) is because since Krugman seems not to ascribe either to venality of character or to stealthy reactionary ideology Obama's worrisome and likely disastrous pre-emptive "compromises" with the terms of his market fundamentalist opponents Krugman opens himself usefully up to the same sort of critique himself. In arguing against market fundamentalist opponents in ways that pretend they are promulgators of arguments and ideas who share with him an evidenciary framework that could adjudicate disputes on matters of fact rather than opportunistic scam artists, and in ways that pretend they are policymakers concerned with sound outcomes who share with him a normative framework that could adjudicate disputes on matters of justice and fairness rather than bought-and-paid-for representatives of incumbent elites, Krugman is pre-emptively compromising his terms, or at any rate making a spectacle of such pre-emptive compromise, much as does Obama himself, and since I would scarcely attribute this move of his to venality of character or stealthy reactionary ideology any more than he seems to do in contemplating the president I suspect the reason or habit or behavioral tick afoot may be an indicatively kindred one, and worthy of further interrogation. I daresay that if Krugman were an economic advisor to the White House rather than an op-ed writer for the New York Times his discourse on these policy questions might be considerably less edifying for the likes of lefties like me.

The deeper questions at hand are, first, just why so many across the public left make this curiously shared recourse to pre-emptive self-debilitating compromise in the face of market fundamentalist opposition, what makes it so irresistible even to those who truly disapprove the oligarchic outcomes and know-nothing economic illiteracy of market fundamentist pieties in the first place (even if not so consistently or ferociously as one might wish) and, second, just what a more efficacious rhetoric might look like that refuses such pre-emptive compromises even if it concedes, as it must, the necessity of compromise as such in any anti-authoritarian politics in a shared world with a diversity of stakeholders.

I've already been rambling on too long, so I leave these questions as open ones for now, with the promise that I'll keep thinking about them if you do, too.


jollyspaniard said...

I think the behavour of the US government will make sense in hindsight if American Hegemony undergoes a collapse both financialy and militarily. Future historians could see this period 2001-201? as a period when powerful vested interets effectively looted and offshored a good portion of America's wealth. Not a conspiracy per se but there's plenty of historical precedent for this kind of behavour. I don't take any plesure in saying that btw.

The left needs to develop a populist message and to pursue it legislatively and unapolegeticaly. The basic economic arguments aren't hard, regressive taxation, regressive policy, military overspending, interventionist foreign policy, overeliance on imported goods and brown energy, corporate welfare. Even some teabaggers acknowledge many of these are problems.

RadicalCoolDude said...

Carrico: always making the even more sensible and rhetorical case that if this deficient stimulus reflected uncircumventable constraints of a monolithically obstructionist GOP in a dysfunctional Senate, then Obama should not have peddled the fantasy of its adequacy but pinned the blame for its inadequacies on the GOP as a way of positioning himself to overcome that obstructionism on the way to making the case for further stimulus down the road

Great point! Too bad it's only a product of hindsight...

RadicalCoolDude said...

jollyspaniard: The left needs to develop a populist message and to pursue it legislatively and unapolegeticaly. The basic economic arguments aren't hard, regressive taxation, regressive policy, military overspending, interventionist foreign policy, overeliance on imported goods and brown energy, corporate welfare. Even some teabaggers acknowledge many of these are problems.

I agree but I think the libertarian aphorism "The best government is that which governs least" has become so imbedded in the American psyche that the only way the left can succeed in overcoming conservative cultural hegemony is by proposing left-libertarian solutions such as moving your money from big banks to credit unions, etc. The fact that there are countless people in the United States who depend on the government for their healthcare yet can be mislead into hating government and blaming it for all their problems shows that there is way too much education (or mass deprogramming) that needs to be done. So perhaps left-libertarian frames is the only chance we have left to be heard... It would actually be interesting to see a study/survey that analyzes whether Americans respond better to left-progressive frames or left-libertarian frames!

Dale Carrico said...

Great point! Too bad it's only a product of hindsight...

On whose part? Krugman argued about the inadequacy of the stimulus from the beginning and hammered the point relentlessly all along. Huge numbers of people were convinced he was right. Among them were many who admired Obama nonetheless and also many who hailed the inadequate stimulus for the unprecedented investments in renewable energy and so on that it included. This sort of recognition of what was good and even unprecedented in the stimulus along with the recognition of its inadequacy isn't really that hard to grasp, even if there is a whiff of paradox about it if it is looked at from too simplistic a vantage (the kind soundbite/twitter mediation encourages of course). So, too, many who recognized the inadequacy of the stimulus in actually-literate economic terms also grasped that politics imposes a second set of constraints that articulate "adequacy" and that Obama's stimulus also reflected those realities. Again, I get that these are transparently easy sorts of assessments, but neither do I agree that one has to be brilliant exactly to rise to the level of their demands. Krugman began by emphasizing economic inadequacy -- as befits his expertise -- but qualified his argument soon enough to do justice to those critics who argued he wasn't taking political exigencies adequately into account in pronouncing his damning verdict. None of this looks like hindsight to me, though. Krugman was prescient, persistent, and made his way to something close to his present position incredibly early.

Dale Carrico said...

By the way, RCD, I hope you will not consider it patronizing if I say these comments of yours, neither of which I completely agreed with by any means, were very welcome, they testified to your own opinions argumentatively, didn't just spam me with links to the opinions of others, and were contributions from which I gained something conversational with an interlocutor. I bust your chops a lot, I know -- but all I have been wanting from you is more of this sort of active owned engagement. I don't mean to start a big meta discussion or anything -- just wanted to commend what I appreciate just as I never fail to excoriate what I do not.