Weekend October 26, 2012 – Useless Policies

This was a week during which all intelligent discussion ceased. There’s an election going on – when isn’t there? – and so no one can make sensible suggestions about policy for a while. Instead we are treated like children to pablum.

Politicians, it seems, really don’t want to get involved in the hard stuff. They roll out endless torrents of vacuous and vague talking points and offer as little insight into what they might do upon election as they can get away with.

I have been particularly impressed by Mitt Romney’s ability to avoid saying anything of substance. His much touted and discussed five point plan to revive our economy from its current slumber is no plan at all. It is a wish list. He tells us what he would like to see happen, but then offers not one wit of a clue as to how he intends to accomplish anything. There are no tactics, no action steps, no progress points laid out so we can chart our course. Just endless happy faces.

In a nation of impoverished analytical capability I suppose this will have to do.

It’s a sort of reality  television experience. We are supposed to imagine the new reality and hope that the script writers knew what they were doing, because all we get to see is the imagined world they are creating.

Obama’s plan is slightly longer with its twenty-seven proposals. Unfortunately that extras length doesn’t give it any real extra heft. It is almost as vague. And it addresses issues that are a little way off, far from the immediacy necessary to turn up the heat in the economy.

Everyone is obsessed about offering re-training for our workers. Presumably they all forgot what they were doing before they were fired when big business shipped the jobs overseas. The idea sounds great: we will have a workforce trained to the gills with cool skills and ideally matched with the jobs of the new economy. Apparently there must be a major skills deficit currently. Our workers are too dumb. Our businesses all too cutting edge.

Quite how this squares with our historically high level of graduate unemployment I don’t know. Nor does it seem to fit with the equally historic level of underemployment of our recent graduates. They must all have studied the wrong thing. At great expense.

It is extraordinary how this skills deficit meme has taken hold. My explanation is simple: it gets politicians off the hook for discussing things that actually matter.

Like the lack of demand.

It is much easier to talk vaguely about the happy future in which all our workers will be highly skilled than it is to enact policies that actually solve the real problems. Everyone can agree skills are a good thing. No one can agree, apparently, that we need to inject demand into our deflated and floundering economy.

The Republicans continue to see everything through the supply side lens that has dominated conservative thinking for about two hundred years. The basic idea is that if business is let rip it will not only flood the market with goodies, but in order to do so it will have to invest and thus employ workers. The increase in supply will therefore create the very conditions necessary for that supply to be bought. According to this train of thought there can never be – never ever – a shortage of demand. The problems all reside in the clutter and uncertainty created by confusing government policy and the acres of red tape associated with regulation. If only, so the thinking goes, we could free business to soar. All our problems would go away.

At its heart this is Romney’s economic doctrine. He said as much during his infamous 47% talk. Just his arrival in the White House would be sufficient. He said, jokingly I hope, that he wouldn’t even have to do anything. Business would recognize a fellow traveller, understand that it was now free, and all would be well.

Contrast that with Obama’s typical Democratic tinkering and endless turning of the economic dials and we see the ideological divide writ large. One side wants to intervene. The other simply steps aside.

Neither is sufficient.

The problems run way too deep for cosmetic dial turning or for faith in self healing.

We are experiencing the logical end result of the dominance of a set of ideas that have undermined our society. They continue to erode the foundation, and, like all foundational reconstruction, any correction has to be fundamental.

We must reject corporatism in its current bureaucratic form. This implies that both left and right understand the nature of modern capitalism. It is not what we read in either side’s most prized literature. It has morphed from it industrial roots. It is steeped in management technologies and techniques that appear antiseptically analytical but which are profoundly antisocial. They enable the numbing deconstruction of the post war social contract and its replacement with a asymmetrical anti-worker perspective that has produced, inter alia, the inequality we now struggle with. An easy example will illustrate: income from capital is taxed differentially from that from wages. Why? Because in our perverse modern world capital is seen as more worthy than labor. But capital has no worth absent labor. Bureaucratic capitalism masks the conflict between capital and labor behind a veil of ‘rational’ analysis. Outcomes are seen as the result of ‘analysis’. Yet when we dig deeply into the origins of that analysis we find that the techniques involved are all derived from a set of economic theories massively divorced from reality and based upon a series of axioms that have even less bearing on reality. This is not rational. Nor is it scientific. It is ideological. The tools that business uses to justify its actions are hand picked to produce the results most conforming to the continued privilege for capital.

Both our political parties live in that world. Until they don’t our problems will persist.

The wrong economics has produced our current malaise. We cannot progress until we toss aside that economics and embrace one that is more efficacious. Such a thing exists. Just not in the supposed plans of either party.