Insanity or Cowardice?

Here is Jeffrey Sachs' latest offering: "Twice before in American history, powerful corporate interests dominated Washington and brought America to a state of unacceptable inequality, instability and corruption. Both times a social and political movement arose..a third progressive era is likely to be in the making." This economic visionary prescribes "a fresh generation of candidates."

Third Times a Charm? Really? Doing the same thing and expecting a different result? Looking beyond the inane revisionism and missing definition of acceptable "inequality", he reminds me of Tony Judt arguing for "social democracy" as Tony Blair and Berlusconi get elected. Even if we get a New New New Deal, won't Hillary just de-regulate the whole fucking thing again? Or that "fresh generation" of Twitter candidates?

Here is a different historical narrative from Wolfgang Streek in his NLR 71 article, Crisis of Democratic Capitalism.( he has obviously been reading my blog). He traces a long arc back to the post-war settlement between capital and labor where workers accepted capitalist markets and property rights in exchange for political democracy (social security, pensions, raises, full employment, collective bargaining, etc) But when the war bump ends and global growth slows in the late 60's, inflation begins to rise rapidly. "inflation can be described as a monetary reflection of distributional conflict between a working class, demanding both employment security and a higher share in their countries income, and a capitalist class striving to maximize the return on it's capital. As the two sides act on mutually incompatible ideas of what is theirs by right, one emphasizing the entitlements of citizenship and the other those of property and market power, inflation may also be considered an expression of anomie in a society.."

Along comes Volker and Carter and an attack on inflation by raising interest rates. The unemployment was handled by the Reagan/Thatcher assault on unions (so much for the "settlement") but stagnation and economic disorder persisted. All the deferred wages, in the form of social entitlements, came due however, and we begin the era of public debt, borrowing once more into future productivity. Of course,"just like inflation the accumulation of public debt cannot go on forever" so under Clinton we enter the era of de-regulation and end of "welfare as we know it." The government was able to run a budget surplus by "giving citizens and firms unprecedented opportunities for indebtedness" and so public debt was replaced by private debt. We know how that story ends. It's public again and being passed around like a hot potato.

The beauty of the capitalist system is you can put off till tomorrow what you don't wish to deal with today. Shift the burden, cook the books, or better yet, simply pass the debt off to the next generation. War debt,financial bubble debt, climate debt, it never has to show up in the actual price of anything...till later.