Economics and Government Shut Down

Brinkmanship?

Lunacy?

Farce?

All of the above?

I really don’t know what to make of a country that applauds its own self-destructive spiral. America seems hell bent on undermining itself. Its leadership, if that word is any longer appropriate, lurches from press comment, to media circus, to sound bite, to Sunday morning TV round tables, without ever engaging in the muckier business of fixing anything. It is as if the entire elite of our country is suspended in its own little bubble, safe and warm, while the rest of us muddle along as best we can. We are abandoned. But I am not sure that the abandonment matters. We may well be better off without the goofball inanity that infests Washington. We are overwhelmed by bureaucracy of all sorts. We are simply numbers to be shuffled along by the computers that deliver us personal service. Whether they be government or privately owned computers, they manage to ignore us all with a particularly modern inversion of the notion of service. Clearly we exist to serve their aims. Our dear leaders have far more important aims and cares than we do. Poor things, we should leave them alone. They have great matters to worry about. We are not on the list.

This I know because they talk together all the time and never let us know what they discussed.

Disgust indeed.

Extreme politics has arrived with a vengeance. We will see whether the country is resilient enough to withstand yet another buffeting of indifference to fact. The posturing is more dire this time around. The right wing has a newer, sharper, edge than before. It is fueled by a couple more decades of faux outrage against the supposed intrusions of the state into whatever version of privacy the speaker of the moment holds most dear. It never seems to be the version I value. But that, I think, is because I don’t live in their world. I quite like government. As long as it works well.

Somewhere along the way America was taught to dislike its own government. It always has had an image of itself as a rugged and individualist sort of place. But that vision was never quite accurate. Especially post war. There was a happy coincidence between the rise of bigger government and that of our middle class. The two marched arm in arm. The one mitigating the downside and limiting the dangers of unfettered free for all in the economy. The other taking advantage of this less tumultuous space to err towards consumption rather than saving. The result was fat profit for business which was shared relatively decently with wage earners. The symbiosis may have been uneasy, it may have had its ups and downs, but it worked well for most Americans. Or, rather, enough Americans that it represented the accepted way, the civilized way, to run the place.

That was overturned by Reagan.

Since then we have been on a steadily more vitriolic journey into our past. The choice appears to be which particular long-ago decade we want to re-create. Instead of facing forward and dealing with the new problems of our age – the changed competitive landscape, the consequences of our materialism, the shifting epicenter of worldwide demand, and the tensions these issues cause – we appear to want to go backwards and locate ourselves in a musty remoteness full of pleasant dreams where there is no need for us to adapt. It is as if we gave up and decided we no longer could innovate of invent our way into the future. Instead we looked back for all we need.

The ugliness of our current discussion flows, I am certain, from our failure to maintain the post war momentum. That failure has imposed costs on many who regard themselves as having played by the rules. That their hard work did not pay off in the way they envisaged means, to them, that someone, or something, is preventing their success. They lash out. They seek the reason. Many are convinced it is the government.

Apparently blind to the service that our government provides to all of us, not just to those who are privileged by its more headline catching programs, they support a drastic reduction in its size. Small government is their rallying cry. Even if they are not clear as to what that implies.

Among other things, they fall prey to the siren song of right wing economists who preach from the safety of tenure about the great creativity that the constant churn and competition of capitalism is supposed to bring. Most of those same economists have long ago given up engaging with the actual economy, and now content themselves with speculating about the properties of an idealized world unrelated to that the people who listen to their stories inhabit.

That these economists have signally failed to come up with an answer to our loss of momentum is not surprising. They are sufficiently self absorbed not to notice the issue, and are content peddle the same ideas revealed as useless decades ago. Only this time the ideas are packaged nicely. They are wrapped in math. That makes them elegant. And elegant substitutes for correct. When asked about the key attribute for being a good economist a large majority of doctoral students recently responded that it is mathematical expertise. Very few mentioned that a knowledge of the economy matters. Their teachers, those who foster this absurdity, continue to influence policy. They have dominated the years of economic drift.

It is all well and good that these economists study abstract economics rather than living economies. That is entirely legitimate activity. I suppose. But don’t muddle the two by interfering in the living. And absolutely don’t try to bend the living to mimic the abstract. That is called social engineering. Which is meddlesome and ethically problematic. Especially if they have propagated a false doctrine.

The clutter of ideas spawned from this false doctrine is shameful. Shareholder value. Efficient markets. Expanded finance. The neglect of manufacturing. The trust of comparative advantage. The list is long. The root stock of these ideas is rotten. So it not surprising that once they are turned into practical action they result in undesirable outcomes. Politics dictated the choice of economic theory. That economic theory spawned policy. Those policies altered our society. And that change called for a shift in politics. Which set the entire process in motion once more.

After a few iterations like this pluralism was eliminated. Economics closed its mind. It became singular, at least at the top.

This week’s theatrics and the so-called showdown over shutting down the government is simply a logical end point of this slow and prolonged elimination of diversity in our thinking. We became pure. We adopted the anti-government sentiment of the right as the leading ideological underpinning of our society. Most of our politics for thirty years has centered on this steady shift of its central tendency to the right. What was acceptable to early post war Republicans is now oddly left wing. So far to the right have we ventured that it is hard to find vocal support for social programs. The entire debate is now conducted within a framework of their unacceptable or unsustainable cost. It is not necessary to prove such sentiments, they are taken as given. Thus we must cut or we are doomed.

There are enough people so blinkered by their conviction that government is the epicenter of all that ails America, that we may actually witness a shutdown. That this could cause harm is of no account to the zealots who now have the power to influence events.

Brinkmanship, lunacy, and farce. All at once.

It is shameful that economics may have played a role in this fiasco. Either by exaggerating the virtues of free markets when it is clear there are no such things. Or by steadily reinforcing the group think that infests our leadership. Or, yet further, by ignoring its own varied and tumultuous development.

The renewed turmoil in economics perfectly mirrors the so-called debate over the role of government. The two discussions are intertwined. They were both resolved long ago, but the losers rallied to become hegemonic. Their victory led to the erosion of wealth, the loss of opportunity, and very likely a diminished future for most Americans.

Unless, of course we can repel their final push.

It is sad to have to contemplate in such stark terms. But that is where we are.