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article imageOp-Ed: The US, austerity, and obsolete thinking — A match made in hell

By Paul Wallis     Mar 5, 2012 in Politics
Sydney - If you read enough of the US “thought leaders”, you can become pretty horrified in a hurry at how old so many of their ideas are. The US, which is facing premature senility in this area, is top heavy with verbal and mental dry rot.
What follows is an examination of the mentality of a museum.
The New York Times has an article which is a good introduction to this subject- It’s a review of a book called The Age of Austerity- How Scarcity Will Remake American Politics by Thomas Byrne Edsall and the reviewer is the NYT’s Michiko Kakutani.
Edsall’s book is a good framework for looking at the old thinking because it contains all the destructive, go-nowhere current mindsets. Whether you agree with his depictions or not, he’s covered the main issues. Edsall reiterates the bipolar politics, the ideological frameworks and the other ennui of the dysfunctional anti-democracy which has done so much to maim the United States economically and socially.
Don’t blame Edsall for this approach, even if it’s pretty grim reading. He’s a former journalist, and what he’s done is perhaps what every journalist dreams of doing- Putting the full story together.
Describing the train wreck- The ancient ideologies
That accuracy is also what’s so scary about his book and its subjects. He’s describing mentalities which don’t have a clue about modern societies, economics or, apparently, anything else. These are the mentalities creating “austerity” as practiced in Europe and elsewhere, and it’s this type of austerity which is coming to the US. It’s also a depiction of the reactive mindsets, which look unhealthily too much like reactions, not forward movement.
The trouble is that Edsall is describing accurately if on overview level the rotting main tent-posts of US political thinking, and shaky-looking things they are:
…Over the long term, however, Mr. Edsall contends that the G.O.P. tends to overestimate “ideological support from the general public.” Though it has won elections for four decades “by mobilizing white voters, especially white married Christians,” he says, this base is “steadily eroding, while Democratic voting blocs — Hispanics, African-Americans, other minorities, and single women — are expanding as a share of the electorate.”
Because of these changing demographics, he adds, Republican leaders “see the window closing on the opportunity to dismantle the liberal state.” The 2012 election is therefore “positioned to be the most ideologically consequential contest since 1932,” fought over the size and scope of government and the allotment of diminishing resources.
The reviewer criticizes Edsall for over generalizing, but the subject matter, like the Tea Party, evangelicals and US politicians in general are definitely guilty of serial generalizing on a colossal scale. (Anyway, how on Earth could you fit anything but generalizations on these subjects into a book?)
Mr. Edsall tends, in these pages, to depict those two parties in highly stereotyped terms. He characterizes Republicans as “budget hawks” who are “willing to inflict harm” on the disadvantaged, and Democrats as “redistributionists” who reflect the interests of “relatively government-dependent populations” seeking “protection from unrestrained free markets and from majoritarian sociocultural norms.”
That’s also how the parties depict themselves- Good Guys and Bad Guys, the usual “treat the American public like 3 year olds” approach.
There’s one other problem- They’re both wrong, and both using outdated models of basic economics. These very simplistic social models are part of the problem. The new economy isn’t based on some sort of class structure. It’s based on doing business, both at the individual level and at corporate level. The theory of “employment” in old economics has been shot to pieces. Old style “jobs” will be gone in a decade or so. There are no “sociocultural norms” any more. That society exists mainly on TV as a monument to unimaginative and socially illiterate storylines.
Edsall has described the framework, and if his description is patchy, so are the things he’s trying to describe and the pseudo-thinking of the people involved. So here comes austerity, based on ancient thinking, into a new society which doesn’t even know what some of these ideologies are about any more. The whole theory of “cut services, cut welfare, sell assets, privatize everything” is guaranteed to work against the poor. Assets disappear, costs rise, population rises, and the entire equation is guaranteed to fail.
The “protect the poor” idea is a good idea, but not because it’s about protecting the poor. Worse, it’s a very half-baked idea if it doesn’t follow through and allow true prosperity to develop. The protection’s most useful function is that it allows people to move up into the economy, and generate the capital which drives the economy. Social justice, fine, and the more the merrier, quite literally, but the truth is that the big modern economies respond to big moves in socially functional capital, not finance-based deals among the 1%.
The US economy is almost incredibly inefficient, if compared to any good working model of a healthy economy. If the entire American population was able to function on the level of the average middle class wage earner or slightly better, America could generate a 1950s type economic surge every year. If every American earned $70,000 a year after tax, the place would be unrecognizable in a few years.
(As it is, America spends roughly per day the amounts Wall Street and the Corporati gush over as “big money” on their annual returns. Compared to the real capital markets and US consumer cashflow, they’re peanut vendors, and not particularly good peanut vendors.)
Compare prosperity to austerity
You can see how deadly austerity is, when you compare it to healthy economics. Prosperity generates capital in gigantic amounts. Austerity does the exact opposite. In a capital driven economy which relies on money to move, it just doesn’t, and can’t, work. Making the poor poorer is a colossal own goal, because even under the basic tenets of capitalism, that’s where the drive to create capital comes from.
Hundreds of millions of people, trying to make money. Is that so hard to understand? The ultimate resource in US economics is capital. “Scarcity” is a very relative term. Capital can deal with scarcity quite easily. Lack of capital, particularly when applied to huge numbers of people, enforces scarcity and aggravates the problems.
The Big End of Town is a comparatively sedate place. The other end of the food chain is a frenzy, all the time, of people trying to make money. When they do, they generate more work, more capital, and more economic activity.
Adam Smith is still basically right. He witnessed and more or less formularized the process of economic and price moves. It’s a pity philosophy got lumbered with the quite inaccurate belief that it’s all about ideals. Real philosophy is about practical methods and principles as much as anything else. What we have in the US now are the ideals without the methods required, and far worse, lacking any clear goals. A process which produces nothing, and spends trillions doing it.
Edsall has defined the problem by examining the "thought leader" mentalities of those who have now spent years not solving any of the problems. Austerity, in whatever form, is not an option. If adopted, it can only fail, miserably and at great cost. American politics may have to be dragged screaming into the new reality, but it doesn’t have any options, either. The old thinking must go, and American colleges should stop training people in dino-economics.
The successful America of the 20th century didn’t set any limits on itself. Austerity is about nothing but limits. Not much of a choice, is it?
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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