Prof. Bezemer first explains what's wrong with mainstream economics and then how to resolve the crisis by putting the blame where it actually lies rather than punishing the victims of it by enforcing austerity.
Read it at Euro Intelligence
Finance and economic growth delinked
by Dirk Bezemer | Associate Professor at University of Groningen
Back in the 1950s and 1960s, when the ideological foundations of the modern right were being laid, anti-New Dealers realized the best way to oppose then-popular policies was to tap into American mythology, so they constructed a narrative of "individual freedom." Private enterprise became free enterprise, etc.
ReplyDeleteThere is another equally old narrative we could tap into -- producerism. It's the idea that people who produce things -- entrepreneurs, shopkeepers, farmers, workers -- are the backbone of the economy, and speculators are nonproductive parasites. Jacksonian Americans likened speculators to the corrupt British aristocrats against whom the colonies rebelled. Today they could be described as penthouse welfare queens. The dichotomy between producers and speculators was more important to early Americans than the dichotomy between public sector and private sector or even between labor and capital.
When the academic work of people like Bezemer, Michael Hudson, and others gets translated into an updated version of some deep-seated mythology such as producerism, it will begin to appeal to more than academics and professionals.
I've gotta say this about the leadership of the right: Often, whatever they may accuse others of, they're busy doing hand over fist themselves.
ReplyDeleteWelfare/Entitlements - Check (via Bonds)
Taxes - Pushing lending over Gov't spending. Bubble Kleptocracy.
Market distortion - See above.
Having read Bezemer’s article I wouldn’t say he is concerned primarily about austerity. His main concern is with an apparent paradox or difficulty, as follows.
ReplyDeleteIn a recession we need to preserve the basic money transfer system that banks provide. As he puts it, “Of course we must jealously safeguard the payment system…” However we most certainly do not need to preserve the other commercial activities of banks, especially the speculative activities.
Any commercial activity, the basic money transfer system apart, should be allowed to fail. Thus the big question is how to separate the basic money transfer system from the other commercial stuff.
I like your thinking Anthony. I think it is important to say that a return to "producerist" ethic or narrative would be a counterweight to the failures of both latter-day conservatism and latter-day liberalism. Both of these tendencies have moved too far in the direction of rights, entitlements and personal liberty, and away from a code of social obligation and mutual commitment.
ReplyDeleteRalph: "Any commercial activity, the basic money transfer system apart, should be allowed to fail. Thus the big question is how to separate the basic money transfer system from the other commercial stuff."
ReplyDeleteThat's what Warren Mosler's proposal's for financial sector reform address. If it's too big to fail, it's too big to exist.
ON the other hand, Bill Black asserts from experience, that the TBTF's could have been put through resolution successfully, all the propaganda that it was impossible notwithstanding. That's existing law, and it was not followed.
"I think it is important to say that a return to "producerist" ethic or narrative would be a counterweight to the failures of both latter-day conservatism and latter-day liberalism. Both of these tendencies have moved too far in the direction of rights, entitlements and personal liberty, and away from a code of social obligation and mutual commitment."
ReplyDeleteThe big issue today is individualism (Tea Party, GOP) v. mutualism (Occupy, old Dems, progressives).