Tuesday, December 6, 2016

The Stupidity of the Elites

I think Matt Franko might be right! The incompetence at the highest levels is too great for it ALL to be just a "neo-liberal conspiracy" (not that any of us on the receiving end of Franko's jab ever say that the economic misery is ALL due to elite bloodsuckers). Let me elaborate.

For the sake of this little experiment, lets just go ahead and assume that all the worst parts about the "neo-liberal conspiracy" are true as best described IMHO by Kalecki's masterwork "Political Aspects of Full Employment" . A sample for the those that havent read it:

"In should be first stated that, although most economists are now agreed that full employment may be achieved by government spending, this was by no means the case even in the recent past.  Among the opposers of this doctrine there were (and still are) prominent so-called 'economic experts' closely connected with banking and industry.  This suggests that there is a political background in the opposition to the full employment doctrine, even though the arguments advanced are economic.  That is not to say that people who advance them do not believe in their economics, poor though this is.  But obstinate ignorance is usually a manifestation of underlying political motives."

and a little later....

The attitude is not easy to explain.  Clearly, higher output and employment benefit not only workers but entrepreneurs as well, because the latter's profits rise.  And the policy of full employment outlined above does not encroach upon profits because it does not involve any additional taxation.  The entrepreneurs in the slump are longing for a boom; why do they not gladly accept the synthetic boom which the government is able to offer them?  It is this difficult and fascinating question with which we intend to deal in this article.
The reasons for the opposition of the 'industrial leaders' to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment.  We shall examine each of these three categories of objections to the government expansion policy in detail."
 Here's 1:
"Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence.  If this deteriorates, private investment declines, which results in a fall of output and employment (both directly and through the secondary effect of the fall in incomes upon consumption and investment).  This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis"
 Here's 3 (The most important one in my view):
"We have considered the political reasons for the opposition to the policy of creating employment by government spending.  But even if this opposition were overcome -- as it may well be under the pressure of the masses -- the maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders.  Indeed, under a regime of permanent full employment, the 'sack' would cease to play its role as a 'disciplinary measure.  The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow.  Strikes for wage increases and improvements in conditions of work would create political tension.  It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests.  But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders.  Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the 'normal' capitalist system."

The problem with this is obvious when you think about it. Even the greediest SOB in the world would have to agree with this. Its the scale. Just take your standard long term projection, something on the order of those 75 year doomsday forecast scenarios. Lets just set our goal as wanting to be the first nation to achieve a $100 trillion economy.

$17 to $100 trillion takes 60 years at 3% average growth, yet it takes 90 years at 2%, which is all that our idiot leaders can seem to manage nowadays.

But time is not at all the worst way to look at it, the dollar differences are just off the charts.

in 2075, a 3% economy from the US today would be $100 trillion, and a 2% economy be just $55 trillion.

Thats almost twice as much loot!

Or a final and even more depressing way to look at it, our competent maths people might guess whats coming next, the numbers go parabolic in a hurry.

By the time that a 2% average US economy gets to $100 trillion in 2105, a 3% economy would be generating a staggering $243 trillion in real wealth every year.

Thats $143 trillion in future wealth that our so-called "leaders" are depriving everyone's kids of at the turn of the century.

I know that the present is great for these rich asssholes but I have to believe that they love their kids enough to want them to be more than twice as well off, their country to be even that much more powerful and secure, whatever it is that satisfies someones priorities. For fuck sake's just give us 1% more please.


Bob said...

Subterfuge and incompetency can go hand in hand. The elites are comfortable in their echo chamber, who will intervene to set them right?

Six said...

Thanks, Bob ... I was trying to compose a comment, but I can't possibly improve or expand on yours.

Ignacio said...

+1 to bob comment.

They are no competing views of the problem, are two different dimensions of the problem. We have both stupidity and greed being the issue here.

Ignacio said...

There is also this:

A lot of "elites" believe the overall wealth will be decreasing in the future, so they are fine with getting less as long as they get to keep the biggest share of wealth and control over the system.

It's important to get behind this mindset of 'material scarcity' or everything looks like confusing.