Steve_American wrote:The problem is this theory was based not on facts, reality, economic history, or experiments. It was all based on deductive logic, that starts with unproven assumptions and proves things with those assumptions. All such deductive systems are only as good as the assumptions. If they are true, then fine. However, most of the Neo-liberal assumptions are obviously false. This means under the rules of deductive logic that none of its conclusions were ever proved.
I think this is overstated to a significant degree, and part of your myopia may be your regular evangelism of MMT.
Neoliberalism from the 1970s had a lot to do with the rebuilding of Japan and Germany and the breakdown of Bretton Woods and the gold standard, followed by massive inflation of the late 1970s. People who made these decisions were financiers and politicians, not industrialists.
Why that's a meaningful difference is that politicians and financiers did not understand a significant change that was already underway: containerized shipping.
The Box describes the disconnect between the absolutely massive productivity improvements spurred by Malcolm McLean and others, and the political, financial and academic class' failure to comprehend its meaning. Containerized inter-modal shipping made it possible to truck, train and ship conex boxes very easily--dramatically lowering shipping costs while dramatically increasing throughput. That's why a desultory place like Hong Kong became a boom town by the late 1960s, a major exporter by the 1980s, and then a global financial hub by the 1990s.
At no point in history prior to inter-modal containerized shipping was it ever even conceivable for countries to have more than a few percentage of their GDP based on foreign trade. That difference was absolutely staggering, and we didn't have the people in power necessary to understand it. We still largely don't. These are economically revolutionary forces, but we don't have a revolutionary class of politicians that really understand it well.
By the mid 1990s, the US telecommunications reform bill opened up telecom to even more competition while opening the internet to the entire world, and for commercial purposes. Simultaneously, firms like Global Crossing were laying down dark fiber across the ocean floor. It used to be insanely expensive to make a long distance call. Today, the cost is nominal. Nobody makes a long distance call today, taking time to consider whether they should make the call or how long to talk based on how much it costs. It's unheard of.
My supervisor lives in Ireland. That would not have happened in 1999. Such a notion would be seen as utterly ludicrous, but it's common in global corporations now. The cost of a phone call would have still been prohibitive in 1999; yet, my supervisor and I talk over video conferencing with a nominal cost.
In stable economies, the older politicians are generally wiser. Today, our older politicians are mostly technological has beens. Donald Trump was fairly unique in that he understood the power of social media, but he's not a techie per se.
Steve_American wrote:In fact, the entire theory is useless. We have had over 40 years of seeing it being used and so far very few of its predictions have come to pass.
I told a now retired multimillionaire former boss of mine back in the late 1990s that based on what I was seeing, corporations would move entire divisions of their business overseas. He looked my highly caffeinated almost 30-something face and said, "That'll never happen." Very smart guy, but he just couldn't see it. It's whose making the predictions that counts. I've made some excellent predictions, and many of them have come to pass.
Steve_American wrote:1] That the EU would quickly bounce back after the GFC/2008 if austerity was applied to show the people that their taxes in 10 years would not be raised to pay back the deficit spending that otherwise would have been used in the now.
. . . Austerity was applied, and the result was 20% (real) unemployment in Spain (and many other nations) just before the pandemic. Etc. 'Real" here means if you also count all adults who want a full time job and do not have one. It is even higher if you also include all those who have a full time job but still live in poverty. [I can point to poverty, because the EU treaties promised "prosperity" and poverty is not prosperity.]
Yes, but the people writing these treaties did not understand inter-modal shipping, that the free trade agreements would drain their industry, or that unfettered communications would lead to high tech outsourcing too.
Steve_American wrote:2] That Japan would soon be insolvent, with high interest rates on its bond sales and high inflation if it kept deficit spending starting in about 1992.
. . . Japan did keep deficit spending for the next 28 years and now its national debt is about 135% of GDP, the BoJ holds about 40% of those bonds, its inflation pre-pandemic was under 0.5%, and the interest on its bond sales was also under 0.5%.
That was actually easier to see, because of their property bubble and their aging population.
Peter Zeihan on US Politics and the end of globalisationWithout agreeing with him, take 10 minutes of your time and listen to Peter Zeihan on just the demographics. Then, come to your own conclusions. With aging populations in the West, we cannot rely on consumer growth led economies.
Steve_American wrote:3] That in very early 2007 it was said that economists had figured it a out and had finally implemented to proper policies to avoid any more recessions. That monetary policy and deregulation was just what was needed.
. . . Then in late 2007 the problem signs 1st started, by early 2008 Neman Brothers went under, and in late 2008 the GFC hit.
There were no major policies introduced in 2007. Most of what was introduced was done in the late 1990s under Clinton's administration, particularly the Gramm-Leach-Bliley financial reforms that repealed Glass-Steagal. It only took 10 years for them to blow up the financial system. In response, they passed Dodd-Frank (aka, too-big-to-fail) rather than reintroducing Glass-Steagal.
Steve_American wrote:4] After the GFC/2008t was predicted that the economy of the US and world would see a "V" shaped recovery. That Neo-liberal economics predicted this.
. . . Instead we saw a very slow recovery. the economy didn't really recover for many workers *at all*. They were trapped in gig jobs making poverty incomes.
I appreciate your candid review of the Obama economy, a lot of which was precipitated by his heavy-handed approach to regulation and healthcare reform.
Steve_American wrote:1] That the US Gov. shall have a Soc. Sec. system that will be paid for by borrowing if necessary. That this is a "contract", that can only be broken if the US Gov. is bankrupt, but since it can create dollars at will, it can never become bankrupt.
That's already been done and isn't going to be replaced until the tax burden on the working spawns a revolution.
Steve_American wrote:2] That the US Gov. shall have 'fine' health care for all that is completely free.
It cannot be free by definition. The question is who pays for it.
Steve_American wrote:3] That the US Gov. shall see to it that every adult has a good job even if the Gov. has to hire them to do some socially useful thing like plant trees or holding an umbrella over a man planting trees.
Easy. Just outlaw farm machinery. You'll have 90M jobs overnight. Except, nobody wants to be a manual laborer on a farm. A better solution is to put tariffs on goods from countries with low wages, so that comparative advantage reigns instead of absolute advantage.
Steve_American wrote:4] That unions shall have a right to organize workers to oppose the economic power of corps. that comes from ownership with the solidarity power of unions. Hoping that this balance of power can be about right to serve the common good.
They already have that. It's useless if the corporation can just move production overseas, but sell into the US tariff free.
Steve_American wrote:5] That all corps. that operate in the US shall do it in the interests of the common good and not just for the owners. That corps. may not make campaign contributions or that such contributions are taxed at a 90% rate.
Some of that could be done with legislation. Corporations have a fiduciary obligation to maximize shareholder value, but it should not be done by paying low wages, paltry benefits, or moving production overseas. I'll bet campaign contributions could be subject to an excise tax.
Steve_American wrote:6] That all media in the US shall operate in the common good. They shall not lie to their viewers.
I think breaking up big media combines and forcing competition is a better solution. It's hard to police lies and liars.
Steve_American wrote:I think that Neo-liberal economics was created in reaction to Nixon taking the US (and therefore the whole world) off the gold standard. This happened in 1971 and Neo-liberalism came along a few years later.
Largely correct, and it also had a Cold War element to it. Free trade with China--a fascist dictatorship--makes no sense at all from a geostrategic perspective, especially now in view of the coronavirus. However, the other force they were fighting is inflation. Look how much money they've printed for coronavirus; yet, inflation, other than asset inflation, is nominal. That may change though, as oil is already at $58 a barrel.
Steve_American wrote:In fact the US national debt went from $1T to $4T over his 8 years, a 400% increase.
Under Reagan, the debt to GDP ratio fell to the lowest it had been since the Kennedy years. Under Obama, it ballooned to over 100% and then started trending down again. Reagan won the Cold War. What did Obama win? What has Trump won? Nothing that obvious to anyone, right?
Steve_American wrote: In fact, the Repubs and later the Repuds have not used austerity when they had the White House, but called for austerity when the Dems had the White House. Clinton even had a surplus for 2 or 3 years.
Making it about Democrats and Republicans leaves you blind to the problem/solution set they faced. Republicans up until the end of Newt Gingrich's tenure were the fiscally responsible party. Yet, the big fear in the late 1990s was the spectre of deflation. At that point, the Republicans abandoned fiscal responsibility. You have to understand that money is debt to understand why deflation and collapsing asset prices and collapsing money supply would scare the shit out of politicians. Remember Ravi Batra and his claim that the US was facing a depression--well, he was sort of right, but they went on a massive 20-year spending spree on God knows what, but it certainly wasn't on improving roadways and infrastructure.
QatzelOk wrote:And the "Modern West" houses people in "experimental" housing models (like suburbia and public housing towers) that sell lots of products and help them control behaviors - without these Modern oligarchs having any knowledge about how these "new ways of living" will affect children, families, or communities. And there is no concern for long-term harm at all.
I think some of them know it is harmful, especially breaking up family units. Harry Harlow's experiments alone would have been a solid grounds for abandoning small children to care centers while mothers go off to work.
Deutschmania wrote:I feel that lasting happiness doesn't come from pursuing fleeting pleasure , but rather from finding fulfillment from a higher purpose . https://www.connectinghappinessandsucce ... d-meaning/ Even a decent standard of living , while it brings comfort , it won't achieve personal happiness . It's like this song says . There's got to be more to life .
Well, I agree that neoliberalism has no high culture save "wokeness," which is more of a perpetual grievance machine. I recently hired someone with a bachelors and masters in genetic engineering. People have these amazing educations, but cannot pursue careers in them. Part of that is society doesn't have a high culture with a purpose of curing genetic diseases or conditions caused by certain genotypes. Similarly, we don't really have many great symphonic composers any more. Since WWI, art has almost been an anti-esthetic.
Robert Urbanek wrote:For a while, there were a lot of Germans happy under Hitler. They were making sacrifices for a higher purpose: the glory of Germany.
Americans too, putting a man on the moon (before we put wheels on suitcases). The government divides today, it does not inspire. It does so deliberately.
"We have put together the most extensive and inclusive voter fraud organization in the history of American politics."
-- Joe Biden
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