Reconsidering NeoLiberalism (code word for return of idiot-savant-conservatism & class war)

   (Commentary posted by Roger Erickson)

NeoLiberalism is basically the code word for war on the Middle Class.

Neoliberalism is Alive and Well

(Hat tip John Hemington)

excerpt:

"Neoliberal policies aim to reduce wages to the bare minimum and to maximize the returns to capital and management.

They also aim to demobilize workers’ organizations and reduce workers to carriers of labour power — a commodity to be bought and sold on the market for its lowest price.

Neoliberalism is about re-shaping society so that there is no input by workers’ organizations into democratic or economic decision-making.

Crises and austerity may not be intentionally sought by most state leaders and central bank governors, but they do contribute significantly towards pursuing such ends.

Consequently, these politicians and leaders of the economy do not strive to put in place new structures or policies that will reduce the recurrence of crisis."

Anyone see a problem with this? Yes, for some, NeoLiberalism is a superficially attractive hypothesis, but it makes no biological sense whatsoever.

It's quite obvious where it all goes wrong. It assumes simplicity where complexity exists.

In a 1st-pass at systems logic, it's true that right-sizing component maintenance processes does makes systemic sense. However, having no idea where the sustainable tolerance limits are for all those diverse processes, and then blindly - and relentlessly - pushing past any and all tolerance limits ... that's just plain stupid and non-scientific - and suicidal to boot.

Toyota wouldn't be in business if it tried to build cars that way. All they'd churn out would be Yugos, Chevy NoVas, and Ford Pintos.

The prime failing of NeoLiberalism is simply complete ignorance, about when to stop.

They cannot in the slightest way recognize when they've gone too far. 

That simple point reveals their ignorant obsession, and their resulting inability to see simple solutions.

The 1st rule of parasitism is "don't kill your host."

Similarly, you'd think that the 1st rule for all OCD Control Frauds and self-styled Aristocrats would be to "enslave the serfs, but don't starve them to death." You'd think that even a sociopathic numbskull would quickly realize that well fed, trained & educated slaves are more productive than constrained ones. If you're smart enough to even start down that path, you might eventually - depending on how intelligent you were - recognize that the pinnacle of wealth is attained by unleashing the serfs, by setting them free.

He is richest who has motivated, capable, free people with a reliable affinity for him.

Who else can do a BETTER job of watching your back, or the backs of your family & children?

Instead, a cultural tourniquet is exactly what NeoLiberalism embraces. Sequestering maximal current fiat FROM an existing generation, while remaining blind to implications for future cultural options.

That is NOT how multi-level (i.e., cultural) evolution works. Rather, system or cultural evolution works via a dynamic, 2-stage optimization task. Those that over-adapt to transient context hasten their own extinction. The actual goal is to constantly re-chart a course that optimizes the dynamic sum of [current fiat PLUS future options], not either one in isolation.

Anyone who stops & thinks about this for 30 seconds agrees - even Mutual Fund investment advisors. The goal is to stay in the adaptive race for decades, not to "win" today - because "winning" or out-hoarding everyone else today is going too far, over adapting to transient context, and reducing future options. What does it take to get NeoLiberals to actually stop & think for 30 seconds?

Do the NeoLiberals love all the grandchildren of America? Even if they think they do, are they really so arrogant to think that THEY know what's best when it comes to planning for the generations yet to come?

How ironic that unfettered, unthinking, runaway capitalism and the class war that results constitutes just another form of the Central Planning that they profess to abhor? What part of tollerance-limits versus going too far do these dimwits not understand? When it comes to constraining cultural adaptive rate, does it matter whether the Central Planners claim Divine Right, Communist Committee, or oligarch authority?

Culturally, NeoLiberalism is analogous to putting a tourniquet on each foot, to squeeze MAXIMAL quarterly productivity out of them. Doh! The result isn't systemic progress, it's cultural gangrene that's soon fatal, if continued unchecked.

Here are some additional, entertaining articles about NeoLiberalism. If only the dimwit NeoLiberals could learn the difference between a useful tactic and unnecessary, suicidal overkill - they could then be progressives. Then we could go back to safely firing the dumbest of the dumb upstairs, out of the way.

Four Signs Neoliberalism is (Almost) DeadThough Margaret Thatcher is no longer among the living, her ideology lives on. That ideology – known today as neoliberalism ... is strikingly unique.

Barack Obama and the Neo-Liberal CoupDefenders of the policies of President Barack Obama have correctly pointed to the difficult circumstances he and ‘the nation’ faced when he entered office and the dim intransigence of Congressional Republicans while they fail to address that his actual policies have derived almost exclusively from the political-economic theories of neo-liberalism—the economics of the radical right.

The Origins of the Neoliberal War on the PoorIn November of 1994 two years of ramshackle government, breached pledges and the Clinton administration’s frequently manifested contempt for its traditional base, exacted their price.

The Human Equivalent of the $640 Toilet SeatCHUCK SPINNEY
Neoliberal economics has been an ideological mantra of Republicans and Democrats alike since President Jimmy Carter began the wave of privatization and deregulation that exploded during the succession of Republican and Democratic presidencies after 1980.

The Corporate State and Manufactured DependenceAn argument often heard in the 1980s and ‘90s by those favoring lower taxes on the rich was the rich could avoid paying taxes because they had the resources to do so, so why not be pragmatic and set tax rates low enough the rich would actually pay them? 

There is an alternative. Seeing our own population as our own, best force, for exploring our expanding national options. NeoLiberals claim to love the military. Therefore they should have no opposition to embracing "Force-Readiness" principles ... which requires optimal investment in the MiddleClass, the foot-soldiers of an adaptive culture.

Yet so far, NeoLiberalism argues that the best citizen "army" is one where the generals constantly strive to hoard all the weapons and ammunition. Good luck with that nonsense. NeoLiberalism is self-contradictory, not just bat-shit crazy.

If you think NeoLiberalism makes sense, then you'd have to also argue that adipocytes should "rule" the human body, and that "honey pots" should run all policy for certain ant colonies. That view is ridiculously simplistic, and also contradictory to our own, human history. The NeoLiberal intellect sees only static assets, and totally misses the dominance of dynamic assets - aka, teamwork.

Maybe We Really Will Revert To A Planet Of The Apes, Populated By FiatDeficitRangers Keeping A Lid On Human Fiat

   (Commentary posted by Roger Erickson.)



From the Can't Make This Up Dept: Dave Walker Wonders Why Highway Funds Are Scarce :(

Dave Walker ‏@DeficitRanger 41m Lanes are locked off on I-95 between New Haven and Bridgeport and no one is working! It's time to fire #Malloy and #DOT officials. DW

Luddites! Maybe someday he'll also get around to wondering why state spending for education is also stagnating ... (but don't hold your breath waiting).

After that? Perhaps his adult kids will wonder why we ran out of fiat, and his grandchildren may even ask why THEY ran out of options.

  BMHOTK!

Again, don't hold your breath waiting. Better get around to considering more options than listening to the Luddite-in-Chief.

Alternatively, maybe we will revert to a Planet of the Apes, populated by FiatDeficitRangers keeping a lid on human fiat. We could achieve a Planet of the Luddites, where every nation's Public Initiative is a flat line, i.e., "balanced."

Why Isn't Aggregate Policy A Science?

   (Commentary posted by Roger Erickson)



A very useful review article has been posted at NEP, by Randy Wray, about JF Foster

The Reality of the Present and the Challenge of the Future: Fagg Foster for the 21st Century

Reading the Foster quotes drives home that enough Americans understood aggregate economics ... but never managed to convey their insights to enough Americans to consistently leverage those insights.

One in particular stands, out, a conclusion that is stated differently in system science. Namely, that most people get no practice discerning the difference between current fiat and future options. Foster clearly did, 50 years ago, rather like Beardsly Ruml, Michael Kalecki, Abba Lerner, Marriner Eccles, and a few others, on to the present flowering of the miniature MMT community.

So how many people must understand MMT, before it matters? How many Americans must know what some Americans know - to reinstitute operations allowing political economy?  

If we're lucky, even 50 Key People in Key Positions in Key Institutions can make a dramatic difference, as FDR's Brain Trust did. 

However they obviously couldn't ensure that our electorate could MAINTAIN that level of success. To RETAIN aggregate success, many have estimated that 10% of the electorate must grasp the emerging operations that made success possible.  Today that would mean at least 16 million citizens!

It's ironic that the legions of Keynes' followers & opponents alike largely misunderstood the messages of Lerner, Kalecki, Ruml & Keynes.

Worse, it's doubly ironic that the legions of Americans, in both policy positions, universities & electorate, didn't understand the operational functions that Marriner Eccles & the rest of FDR's Brain Trust introduced ... who themselves DID NOT READ Lerner, Kalecki, Ruml or Keynes, or acted largely before most of their summary articles were published.

Finally, it's triply ironic that pundits throughout the ages were right. Humans - and human aggregates too - often stumble over new truths, then pick themselves up and go on in their old ways - for astoundingly long periods of stagnation - as though nothing new had happened.

Yet does that seem to happen MORE often in disciplines not yet favored with the audacity and openness of a science? Other professions glom onto every new advance like a dog on a bone, using the basic, questioning methods of the "scientific method" - aka, to question EVERYTHING, and answer every operational RESULT relentlessly, with yet more questions.

This sums to a simple but profound question. Why isn't aggregate policy dealt with as a science? 

It's not that difficult for aggregates to determine the best course of aggregate action. We mobilize to do it well, in times of crisis or war, but during peacetime we go right back to purposely maintaining a significant, completely unnecessary Output Gap. 

Is it only the frictions of politics that makes us treat the operations of functional democracy (always changing, uniquely scale-dependent) as a fearful taboo? Is that what FDR meant when he said that the only thing we have to fear is fear itself? We're afraid to play as an aggregate team? We're terrified of the return-on-coordination? 

Maybe we should let sports coaches, choreographers and band-leaders run the country? They'd remind us that there's no "I" in team, and also nothing taboo about teamwork.

The Optimal Savings Plan Is To Build An Awesome Team.

   (Commentary posted by Roger Erickson)



Mathematician Gives Tips On How To Win $1 Billion On NCAA Basketball

Another data point in the endless stream of failures to see the full context for the local options. 

Why don't we do this for politics, and policy development? Why only during war, gambling, entertainment arts ... and crime? 

And not just to win election to a political office, but to formally attempt to predict and continually reassess and re-tune the aggregate utility of aggregate policies?

Historically, it's possible to recruit cooperation among thieves (e.g., wolves), when they all clearly sense that they can steal EVERYTHING from a weakened neighbor. Then, they enlist the awesome power of a dynamic asset - coordination - to harvest the visible static assets that they covet.

Not unexpectedly, seeing the return on coordination as ONLY the static returns, and NOT as the dynamic method itself .... is always the initial state.

It takes a much longer time to build up all the infrastructure, whether physiological or cultural, to permanently capture a bias to coordination as a desirable dynamic asset, BEFORE any available static assets are even targeted.

We in the USA need a distinctly different education and training approach, to retain and further instill appreciation for coordination itself as a more valuable asset, separable from any static assets that dynamic assets allow us to procure upon demand.

The required approach would trigger the transition from the analog of a snail-level-culture, to something analogous to a far more agile, army-ant-culture, investing in methods for hoarding coordination techniques (teamwork) rather than burdening itself with static assets (i.e., "savings"). If we focus more on generating dynamic options instead of burdening & slowing ourselves by hoarding static assets .... we could be far better off as an aggregate.

The optimal savings plan is to build a more awesome team, as a "more perfect union." One able to generate options, NOT slow itself carrying excessive static assets. Why bother with cruder & less productive forms of "saving" or hoarding? IRA = ARP (aggregate retarding process). Why are we always conflating current fiat and future options?

Conflating CURRENT FIAT with FUTURE REAL OPTIONS

(Commentary posted by Roger Erickson - replicated from a comment first posted Dec, 2012 at Seeking Alpha)



Every citizen should learn the rudiments of Situational Awareness by, say, age 10, so that we as a people can keep exploring real national options, not just working at looting one another.

Teamwork. Surely that's not a difficult concept in such a sports-mad country?

Teamwork, like any goal, requires assessment systems, so we can practice before seeing if we can be successful in novel situations. Successful outcomes can always be interpreted in short, medium and long-term metrics. How about these familiar standbys?
.. fiat currency accounting?
.. proportional population employment?
.. survival of the country (based on capabilities & affinity ... of US citizens).

No citizen can assess what they can do for their country if they don't understand the basic operations listed above, starting with fiat currency.

Yes, we already have these measures that could let the public track success, but that doesn't mean that they're used. Largely because most citizens don't learn much about policy tools we already possess. Most of our problems were, in fact, taken care of by the Automatic Stabilizers enacted during the 1930s-1940s (social security, FDIC, unemployment benefits, etc). The only one remaining is Control Fraud (google William K. Black), and that's only because we let crooks talk us into deregulating financial crime, right up to repealing Glass-Steagall.

Everything else comes down to a fight between merchants and citizens, waged through the currency supply, either restricting it to preserve the buying power of hoarded cash, or letting it depreciate to continuously grow liquidity. Let's see how many grasp the following argument.

How do we afford to pay the "fiat interest on fiat bonds."

If carried far enough, that discussion eventually leads to 2 points.

First, we can't fail to pay the interest, since we can always generate as much fiat liquidity units as we want.

So, second, the argument reduces to either:

a) Arbitrarily maintaining the purchasing power of previously hoarded fiat (liquidity units), by progressively depriving an increasingly complex economy of both relative liquidity AND return-on-coordination [i.e., pay the fiat interest by draining private savings of previously issued currency; even though population & net capabilities... are both increasing]. [Even fools don't want that, when faced with a choice. Only pure sociopaths do.]

or

b) Instead, enlarge the fiat currency base [the unit of liquidity] with expanded issuance (public spending), thereby diluting the absolute buying power of yesterday's liquidity units. Why? In order to provide enough liquidity to readily DENOMINATE and hence rapidly explore the expanding options of tomorrow's return-on-coordination. Coordination possible from the pairing of more people with more capabilities.

That is the "SOCIAL-SPECIES DILEMMA." Evolve and stay in the adaptive race, by organizing on a larger scale ... or ... become a has been culture, and become either extinct or a domesticated lunch source for some other, more rapidly adapting species - i.e., one optimizing it's liquidity in order to explore expanding options faster than your culture does.

People who save excessively, i.e., hoard fiat beyond liquidity needs, are hoarding today's output and thereby depriving their grandchildren of expanded options.

Our grandchildren's options are reduced without our full investment in generating those options. Our Output Gap = grandchildren's Options Gap, and the relation is not linear, but exponential.

If our output gap is "j", their options gap is [j(e)], i.e., "j" to some unpredictable exponential "e".

That's how evolution has worked since the dawn of time. We die so that our descendents can be far more than we were. It's called sexual recombination, or cultural recombination, or - in general form - Options Recombination. (see the "Traveling Entrepreneurs Task")

This all follows from the simple, bottom-up dynamics of organized systems.

Walter Shewhart: "In all complex systems, the highest cost, by far, is the cost of coordination."

Obvious corollary: "In all complex systems, the highest RETURN, by far, is the RETURN on [investing in] coordination."

***

SeekingAlpha Commenter Zmartmoney added a key point.

To all who care to notice, you've just explained all our problems in one short treatise. The fact that 90% of the population does not understand any of what you wrote is our heritage - we, as a nation, are now virtually clueless as to how govt, business, or economies work and what role each of us plays in it. This is a testimony to the insidious nature and capabilities of politicians and their success in dragging the discussion into the ditch to drown it quietly while stealing from everyone in sight. The number of statesmen in the Legislative, Judicial, and Executive branches of our govt can be counted on two hands, and we'd probably argue about which ones those are. Our doom is sealed by our inability to grasp why we are here and what solutions, if any, might lead to our recovery to a state of being well informed and capable of making decisions in our personal lives and our govt. Sorry.

We as an informed electorate were not always this ignorant, nor do we need to remain that way. I hope we can someday prove him wrong. To do that, our grandchildren need more options, and they need to be AWARE of them. To provide those options and capabilities, we need to express more initiative (fiat) now, and also select where to apply it - wisely, not randomly.