Big Ideas and the Concentration of Wealth

August 14th, 2011 at 10:39 am

There’s a piece in today’s NYT about the death of ideas: where are the big thinkers today—paradigm shifters like Keynes, Einstein, Friedan?

The author—Neal Gabler—has a point.  The big thinkers in my field are basically arguing over Keynes v Hayek…not that there’s anything wrong with that.  Since the Great Depression, Keynesian economics has never been so important…nor so poorly understood.  But if the point is that we’re stuck in old boxes, I think he’s right.

But, at least in the realm of political economy, I think he misdiagnosis the cause.  Gabler stresses information overload.  There’s so many bytes of info at are fingertips that we no longer think in ways that foment and nurture ideas…we just know stuff.

That may be true in some fields but in my field, I think the concentration of wealth and its handmaiden—power—are implicated.  Let me explain by way of example.

The financial crash of the 2000s revealed a confluence of many powerful and socially disruptive forces: levels of income inequality not seen since the dawn of the Great Depression, stagnant middle-class living standards amidst strong productivity growth, solid evidence that deregulated markets were driving a damaging bubble and bust cycle, deep repudiation of supply-side economics, and most importantly, even deeper repudiation of the dominant, Greenspanian paradigm that markets will self-correct.

We may not, in my lifetime, witness another historical moment where these destructive forces are so clearly revealed.  What’s more, there were economic thinkers arguing for a new paradigm (I hesitate to list them because I know I’ll leave someone out, but Stiglitz comes to mind as particularly visionary in those days; George Soros had a great little book, Jamie Galbraith, Dean Baker, Krugman come to mind—my book “All Together Now: Common Sense for a Fair Economy” took a stab as well)

And yet, at least from where I sit today, we let the moment pass.  Far from a debate over a new paradigm, our national political economy discussion is bereft of ideas, leaving us mired in recession as we self-inflict one economic wound after another.  Forget new ideas—we can’t seem to correctly apply the old ones!

Why did we squander the opportunity?  Not because there’s so much information on the web.  It is, at least in part, because the concentration of wealth and power blocked the new ideas from a fair hearing.

Deregulated markets, “rational market” theories, eroded labor standards, the retreat of unions, regressive taxation, financial engineering, global arbitrage, low rates of job growth, growth that eluded the middle-class and the poor…all have contributed to almost unprecedented levels of wealth concentration.

Such dynamics are self-reinforcing.  The narrow slice of winners, enriched beyond imagination by these forces, use their wealth to insulate themselves from new ideas that threaten their position by purchasing not just political power but even “ideas,” through bogus think tanks and media operations.

They and their representatives ensured that when history provided a unique, crystallized moment of clarity as to their fundamentally corrupt paradigm, too few would see it clearly and when those who did sounded the alarm, no one would listen.

And now we’re arguing about debt ceilings, budget cuts, and super-committees, not to mention whether evolution and climate change are real or conspiratorial notions of the left.

I know this is a dark vision of reality but before you get too deeply bummed out by it, let me say that I’m by no mean alone in this analysis of the problem, and I’ve begun to see some hints that more and more of us are getting the picture.  And that has the potential to create a welcoming climate for new ideas that challenge this paradigm, ideas that have been sorely missing for too long.

 

 

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30 comments in reply to "Big Ideas and the Concentration of Wealth"

  1. Marie Burns says:

    Blame It on Norm? Maybe.

    Oh, Keynesian economics. I thought that was Kenyan. (If you go to a Tea Party rally, you’ll find out that “Keynesian” means “born in Kenya” [really] and Obama sleeps with the corpse of Saul Alinksy [nearly really].)

    But seriously, the MSM has been writing stories or items about growing income disparity for at least 15 years, probably longer. Yet during the Clinton, Bush, and Obama Administration, both the exeuctive and the Congress have only widened the gap.

    There was a “great moment” to reverse course, and you were there. It was Febuary 2009. But President Obama and the Senate let it pass. Indeed, Obama had decided even before he was sworn in to let it pass. He decided on a stimulus too small, and he got a stimulus too weighted on tax breaks (which most American didn’t even know they got) to make a difference. It is possible that if former Sen. Norm Coleman had not dragged out his challenge to Al Franken’s razor-thin win in Minnesota, the Administration could have got a slightly better stimulus bill passed. But I don’t think Obama ever had the “grand idea.” The little tick up in the minimum wage helped, but not much. Try to live on the minimum wage. As you well know, the Administration was cavalier about jobs for ordinary Americans. And now — we have a Tea Party House.

    My hero of the day is Rep. Jim Clyburn (D-S.C.), who says he will use his place on the super committee to “tackle the nation’s enormous wealth gap.” Good luck with talking fellow super committeeman Pat Toomey (RTP-Pa.) into that idea. But at least Clyburn has the “grand idea.” That’s more than I can say for President Obama.


    • Carl J says:

      Nope, the moment was the Supreme Court’s gift of the presidency to George W. Bush, allowing them to shout down any dissent as being unpatriotic or treasonous. GWB was the driver who took this nation to the brink, left Mr. Obama a mess, and the Tea Party/Roger Ailes crew continues to obfuscation and ‘do nothing’ philosophy until they can get the person elected who will turn over what;s left (after Bush) to the corporations and the wealthy.


  2. David Aron says:

    I’m curious: Do you include Obama among the winners and their representatives? (If ytou’ve already written about this question a thousand times I apologize–I’m coming to your web site for the first time on a link from Kevin Drum.)


  3. Sandwichman says:

    I’d suggest two reference points. First Russell Jacoby’s 1987 book, The Last Intellectuals about the decline of the public intellectual. Part of it has to do with the institutional incentive and reward systems. It’s not so much that there aren’t independent public intellectuals as that they are effectively drowned out by the tsunami of pseudo pundits cranked out by deep-pocketed institutions.

    The second reference point would be to one of the public intellectuals featured by Jacoby, C. Wright Mills, and his analysis of the “crackpot realism” of the salaried intellectuals.

    For those who would quietly attain modest goals in a short while, and who are acting within a main drift that is generally beneficent, crackpot realism is quite fitting. They need neither enduring means nor orienting programs of scope. But for those who are in the main drift toward World War III and who would stop that drift and attain a world condition of peace, opportunism is merely a series of cumulative defaults. Short-run pursuits are leading to long-run consequences that are not under the control of any program. The absence of an American program for peace is a major cause of the thrust and drift toward World War III. In the meantime, and in the absence of such a program, elites of political, military, and economic power are at the focal points of the economic, political, and military causes of war. By their decisions and their indecisions, by their defaults and their ignorance, they control the thrust of these causes. They are allowed to occupy such positions, and to use them in accordance with crackpot realism, because of the powerlessness, the apathy, the insensibility of publics and masses; they are able to do so, in part, because of the inactionary posture of intellectuals, scientists, and other cultural workmen.

    There is an outside, an underground that is usually devalued and ignored by the insiders — even the more progressive ones. Who does, say, Paul Krugman talk about when he addresses conflicting ideas? Why the economic establishment right or the moon-bat right. There is, in general, no cultivation of hitherto unassimilated views and opinions, only a perpetual refutation of opposing ones.


  4. Kevin Rica says:

    I’m not sure that we need big ideas. We need to be open to how the world is changing. We need both intellectual flexibility to adjust to new ideas and the intellectual discipline to reject meritless ideas that we wish were true.

    The Obama Administration is the most intellectually orthodox I could imagine. It accepts ideas from its base and the Democratic leadership wish were true and then compromises with the Republicans and rules from the center.

    It has rejected every idea that it didn’t inherit from the Clinton Administration. When things don’t work it just wants to try them again. The King obviously needs more stimulus to put Humpty Dumpty back together again. It takes ideological positions and then compromises. But it does not actually take positions based on whether or not they are factually and logically correct and consistent.

    Its position on China’s exchange rate is based on Robert Rubin’s strong dollar mantra.

    Its position on immigration is based on political calculus and “tradition;” Tradition was the intellectual justification for slavery and Jim Crow. The fact that the unemployment rate is near 10% is intellectually alien. The Democratic leadership wants to believe that people fleeing crushing unemployment will magically create jobs here. That’s what they want to believe, but its not true. No intellectual discipline.

    We are in a new world with old ideas.


  5. D. C. Sessions says:

    Santayana aside,the model today of FDR is of the “class traitor” (either for good or for evil, depending on whether you look at him from the left or from the right.) What we don’t see is FDR in the context of the Bonus March and Douglas MacArthur.

    Thus, I’m a bit less sanguine about the road that wealth concentration is taking us down. I’m enough of an optimist about the US public to doubt that we’ll line up for serfdom once we run out of slack, but I’d much rather the FDR solution than the less subtle solutions that are likely to come with the pendulum swinging back.


  6. Red Planet says:

    Oh Lawd, let Jared’s last paragraph be right!


  7. perplexed says:

    Thanks for a great post Dr. Bernstein! Remember its only a “dark version of reality” because so few are shining their spotlights on it. The more this reality is brought into the light, the more likely it is that it will be resolved. From what I read & hear it appears that very few really comprehend the magnitude and implications of this wealth concentration on our country and its economy. Having almost 75% of the nations wealth in the hands of 10% of the population (and 62% in the hands of the top 5%)(and this is before the full impact of the real estate crisis on the middle class is known) has tremendous implications that no one appears to be discussing. 90% of Americans combined direct the investment of only 25% of the country’s wealth. What are the implications for the objectives of these investments? What are the implications for the power over incomes and financial influence on government institutions?

    You point out that:
    “Such dynamics are self-reinforcing. The narrow slice of winners, enriched beyond imagination by these forces, use their wealth to insulate themselves from new ideas that threaten their position by purchasing not just political power but even “ideas,” through bogus think tanks and media operations.”

    But this contradicts the result that a truly representative democracy would produce. A minority, even a wealthy minority, would never be able to get this kind of power where the majority was indeed represented! (And this an idea well over 200 years old!) Radical campaign finance reform must be part of the solution to our ECONOMIC


  8. perplexed says:

    (continued)
    as well as political problems. They’re inseparable.

    I pulled this excellent quote from link you posted the other day to the Noble Eightfold Path:
    “The Buddha teaches that there is one defilement which gives rise to all the others, one root which holds them all in place. This root is ignorance (avijja). Ignorance is not mere absence of knowledge, a lack of knowing particular pieces of information. Ignorance can co-exist with a vast accumulation of itemized knowledge, and in its own way it can be tremendously shrewd and resourceful. As the basic root of dukkha, ignorance is a fundamental darkness shrouding the mind. Sometimes this ignorance operates in a passive manner, merely obscuring correct understanding. At other times it takes on an active role: it becomes the great deceiver, conjuring up a mass of distorted perceptions and conceptions which the mind grasps as attributes of the world, unaware that they are its own deluded constructs.
    In these erroneous perceptions and ideas we find the soil that nurtures the defilements. The mind catches sight of some possibility of pleasure, accepts it at face value, and the result is greed. Our hunger for gratification is thwarted, obstacles appear, and up spring anger and aversion. Or we struggle over ambiguities, our sight clouds, and we become lost in delusion. With this we discover the breeding ground of dukkha: ignorance issuing in the defilements, the defilements issuing in suffering. As long as this causal matrix stands we are not yet beyond danger. We might still find pleasure and enjoyment — sense pleasures, social pleasures, pleasures of the mind and heart. But no matter how much pleasure we might experience, no matter how successful we might be at dodging pain, the basic problem remains at the core of our being and we continue to move within the bounds of dukkha.”

    There is no doubt that ignorance and the internet can co-exist quite easily and can actually be be mutually-supportive, especially in the wrong hands. The ideas never have, and probably never will, come from technology. Its still up to us.


  9. Mary says:

    Excellent!

    This article addresses some interesting concepts and trends, and sometimes does so quite well, but at other times, it is too hyperbolic or reduced in its analysis. I agree with the general assessment of higher ed (overspecialization) and of social media (me, me, me, let me tell you about me; I don’t use Facebook mainly for this reason…). That said; I’m not clear on the other supposed distinctions; for example, to me, knowledge and thinking feed each other.

    And I would like to add that I feel writing is quite important. I turn things over in my mind often, but at some point, I have to start organizing those thoughts by laying them out on a document, and this process generates more ideas, clarity, questions, etc. I not only like writing, (because I get to play with words, images, etc. and that’s fun), but I need it. I completely agree with this: “For another, social networking sites engender habits of mind that are inimical to the kind of deliberate discourse that gives rise to ideas. Instead of theories, hypotheses and grand arguments, we get instant 140-character tweets about eating a sandwich or watching a TV show.” My process and needs are quite different from this, and I would argue, mine is healthier.

    But let’s return to the larger issue. The author says, “Bold ideas are almost passé. It is no secret, especially here in America, that we live in a post-Enlightenment age in which rationality, science, evidence, logical argument and debate have lost the battle in many sectors, and perhaps even in society generally, to superstition, faith, opinion and orthodoxy…Post-Enlightenment refers to a style of thinking that no longer deploys the techniques of rational thought. Post-idea refers to thinking that is no longer done, regardless of the style.”

    I don’t agree with this. I think that a great many ideas are being offered; some are based on the great thinkers of the past; some are variants of these ideas; and some break from them enough to be considered new ideas (bold?, history can decide that). You wrote, “Why did we squander the opportunity? Not because there’s so much information on the web. It is, at least in part, because the concentration of wealth and power blocked the new ideas from a fair hearing.” This is indisputably true. But I would like to lend a different perspective on this.

    When I think about these amazing figures in history, they have one consistent quality that I admire. It’s what makes them awesome. They know when to take (calculated) risks, and they do so boldly. By nature, I tend to go a bit against the grain, and it’s always annoyed me some to see most others routinely play it safe. I would say for the masses, this is probably fine, if a little tiring for someone with my disposition, but to see this quality in a leader, it’s more than annoying; it’s potentially antithetical to leadership. To state the obvious, leadership is about leading. And this may seem simplistic, but you can’t lead if you’re following. (And I have no idea what leading from behind means…. Perhaps I’m not leading so I’m going to engage in political spin…?) Going with the grain is about following. Forging a new path inherently requires a bit of divergence from the safe and the expected. It’s requires a bit of rebelliousness and risk.

    There has been this cultural shift (not to go back to blaming it on the boomers, but maybe a little) to compliance and conformity for the sake of expeditiousness, personal ambitions, etc. Because of the very reason you provide, the concentration of power and wealth, now more than ever, we need individuals who are willing to take risks, to take on the powers that be. It may be David versus Goliath, but this brings me to my next point.

    What makes a celebrity a celebrity? They are actually nothing more than mere (talented) mortals. It’s our perception of them. The masses make them who they are. It’s an illusion, but it can be a powerful one. If Obama can regain the imagination of the American people, we will throw our imaginative weight behind him and make him that larger than life figure he needs to be to beat these beasts of self-interest. But if he can’t believe in himself, in his potential to be a towering, formidable figure, then we can’t believe in him; we can’t help him be bigger, stronger, better than his limited corporeal being. We want to create great figures from mere mortals so let us, inspire us to do so.


  10. HenryEdward says:

    Just came over from Kevin’s, both of you are right and fit together well. The issue is actually pretty well demonstrated in the comments here. Red Planet and Sandwichman are the only ones really commenting or conversing in the tradition that has been lost. Everyone else, to varying degrees, is taking part in the small ball that has been supplanted real ideas. In other words, by focusing their time to comment and converse all about the political obnoxiousness, they suck the little bit of the remaining oxygen out of the discussion of new big ideas.

    The refreshing change would be: “Jared, tell us more about your thoughts on this, and who else is working on this angle too?” Then listen and talk about the ideas. It works. (Even on TV – Kevin’s partial explanation – it is possible. Compare Dick Cavett listening and asking to the sophist drool that pundits pass off as ideas.)

    So Jared, tell us more.


  11. Geoffrey Freedman says:

    This was an excellent blog.

    One thing that needs to be done is to let ALL the Bush tax cuts expire. If you look at after tax dollars and consider the the effect of the cost of government services and its impact on the lower income percentiles, the net result is that $113 billion in wealth was transferred to the top 20%, $35 billion to the top 1%.

    If you look at the tax cuts, the bottom 20% only got an average in $17.00 in tax cuts, while the top .1% (million dollar incomes) got over $145,000 in tax cuts. I don’t think people truly understand how incredibly regressive the effect of the tax cuts really were, otherwise there would be less insistance on only cutting for people over $200,000 (which I admit is preferrable to my proposal). It would really increase revenues and force the issue of Tax reform. All Obama has to do is veto any call to extend the tax cut next year.

    The link below explains it really well.

    http://faculty.lls.edu/workshops/documents/zelenak.pdf

    The other thing we need to do is to start scaling back defense. It is absolutly stifling our economic growth and studies showing the impact of defense spending on economic growth are at best, inconsistent.


    • perplexed says:

      Helpful, but probably not enough at this point. This billions/trillions thing is really confusing! Based on what I’ve seen (2007 data) the top 1% have almost $20 Trillion; the top 5%, $35 Trillion, and the top 10%, over $42 Trillion. (Our entire national debt is less than $15Trillion, pocket change to these folks). This, out of a total of less than $57 Trillion (Based on 2007 – before much of the impact of the real estate fraud disaster was accurately recorded). So looking at annual income/tax percentage data really minimizes the problem relative to the accumulation of wealth that has occurred from it. Just how many years would it take to really rectify the problem by tweaking a few billion here or there from tax revenue %’s? As Keynes said “In the long run …” (well, you know the rest).

      I don’t really see how we rectify the problem without wealth taxes (which would be especially timely given our “grave” deficit problems and need for additional stimulus now, or perhaps inheritance taxes (and writing off the next decade or two) to rectify it during our childrens’ lifetimes (they’ll need all the help they can get!).

      But, you’re right, there’s no need to add to the problem by continuing the tax breaks for the wealthiest. 100% of it goes into savings and counting any part of it as economic “stimulus” is, well, for lack of a more accurate adjective, fraud.

      Fortunately, this stuff is this easy part. The bigger issue is how do we fix the problems with our political representation that got us here? And, how we do that before considerably more damage is done?


      • Geoffrey Freedman says:

        I agree with you regarding my economic points, but we have to start somewhere and its something that could be done. Your question at the end is spot on; it’s the right question.

        The other big question; do we have the government we deserve because we ourselves do not wish to make tough choices necessary?

        It’s really an introspective question, I know, but it’s something we all need to ask ourselves, in my opinion.


        • perplexed says:

          Any questions asking how we got to this point will probably lead us in the right direction – I doubt we’re dealing with the chance occurrence of a stochastic process. If our government was truly “representative” as designed, we’d already know the answer: yes, its us and our choices. But when “big money” pre-screens our candidate pool through the campaign finance process, we don’t end up with a government that’s reflective of “us.” Candidates that would make choices that are in favor of the country as whole but counter to the interests of the wealthy must be put on equal footing and given a chance at being elected; currently they are “filtered” out. Current representatives should fear the wrath of their constituents, not their campaign financiers, and their constituents should have alternate choices in the event that they don’t, not just choices of others that fear the wrath of their own campaign financiers. Representatives should fear being seen with big money lobbyists who are trying to influence their votes to be other than what their constituents want; instead these lobbyists are actually writing the legislation as the representatives pursue funding for the next election. People can not, will not, and should not trust their government until this is addressed.

          This “popular election and control” idea is a pretty old one and some think a pretty good one – how we did and continue to allow it to be circumvented needs to be addressed because its so fundamental to our government actually being a democratic republic in more than name alone.


  12. Taryn H. says:

    This is an amazing post. I hope you say this more (seems like I see you on MSNBC every night).

    I feel like I’m drowning in propaganda. It’s everywhere in the mainstream media.

    I won’t read the Economist in print anymore because I don’t know who is writing (online there are at least initials). I really need to know when a person who is telling me inequality isn’t all that bad that he worked his entire career for Koch-funded think tanks, which is what Will Wilkinson routinely does for the Economist.

    Here he is criticizing Joseph Stiglitz (He has an MA in philosophy or something – sidenote: he was studying Ayn Rand, of course):

    http://www.economist.com/blogs/democracyinamerica/2011/04/inequality_and_politics

    Here he is arguing that the New Gilded Age is improved – so, you know, not to worry:

    http://www.economist.com/node/10328935

    Basically, this guy has spent his entire career (such as it is, given that he’s in his 30s) in Koch-funded institutions – specifically, Mercatus Center and the Cato Institute. This is his job – convincing people inequality shouldn’t be an issue (he also really hates unions). He’s like the global warming denialists over at Cato. It’s flat-out propaganda. And this is the Economist!

    I think one of the really bad effects of the press getting hammered so badly by the internet is that think tankers are really stepping into that void. There are a lot of bloggers with think tank affiliations – and they post all over without necessarily disclosing those affiliations (that’s what W.W. does). I think the amount of pseudo science and propaganda that we hear and read daily is staggering. I seriously won’t believe anything if I don’t know the source.

    By the way, if you think that was just a couple of posts by Will Wilkinson, I’ve included a few more below. He generally argues either: 1) inequality isn’t as bad as people lead you to believe; 2) even if it is in terms of dollars, it’s not in terms of how people experience it (everyone’s got a TV); 3) we’re not measuring it properly; 4) anyone who says it’s bad is sloppy, lazy or partisan; or 5) there’s nothing we can do about inequality (much as we’d like to).

    It’s just straight-up propaganda in the pages of the Economist. Note that he’ll occasionally cite another propagandist of common cause over at the Orwellian-named Pew’s Economic Mobility Project:

    http://www.economist.com/blogs/democracyinamerica/2011/03/inequality_and_policy

    http://www.economist.com/blogs/democracyinamerica/2010/12/inequality_instability_and_finance

    http://www.economist.com/blogs/democracyinamerica/2010/11/inequality_and_plutocracy

    http://www.economist.com/blogs/democracyinamerica/2010/09/inequality_myth

    http://www.economist.com/blogs/democracyinamerica/2010/09/measuring_inequality

    http://www.economist.com/blogs/democracyinamerica/2010/09/hacker_and_pierson_inequality

    http://www.economist.com/blogs/democracyinamerica/2010/08/inequality_and_crash_0

    http://www.economist.com/blogs/democracyinamerica/2010/08/inequality_and_crash

    http://www.economist.com/blogs/democracyinamerica/2010/11/inequality_and_executive_pay

    http://www.cato.org/pub_display.php?pub_id=10351


  13. Hugh Akston says:

    Maybe today’s big thinkers are interested in more important things than politics.


  14. John says:

    One of your better posts, Dr. Bernstein – maybe the best of your’s that I’ve ever seen; and an excellent article by Gabler as well.

    I don’t know how much input you get from folks who have studied the issue of information overload directly; I have, years since. Gabler’s article, and most of what I’ve written here and elsewhere, are the tip of the iceberg. I have long since envisioned an intelligence pyramid, that information technology is shrinking; the population is moving to the bottom of that pyramid, including many who might otherwise be considered more intelligent in conventional terms.

    In 1974, the year pocket calculators first appeared as retail items, I was taking an undergrad physics class. The prof let students who had calculators use them for tests, as an experiment; there was only one such student. The prof had put a trick question on the test that required a simple multiplication: 10×1=10. The guy with the calculator used it, and got it wrong.

    I don’t think you’re wrong, I think both you and Gabler are right, and neither of you see the whole picture – like seeing an elephant from different sides. The thing is, it’s a really big elephant.

    What bugs me most about macroeconomics is that because your ideas aren’t directly and empirically testable, you far too often stop short, at symptoms instead of causes. Good software developers don’t have that problem: we create the information worlds we inhabit, and they’re like a god that tests our ideas for us. So we’ve learned intellectual methods, both algorithmic and heuristic, for keeping on past symptoms in search of causes. It’s not science, but really good developers all do pretty much the same things. Economists could learn from us on that score, if no other.

    Point of data – lack of aggregate demand, financial crisis, housing bubble… None of those are root cause. If people simply had more money, none of them would have reached crisis level. You folks aren’t wrong, you just have stopped short in your analyses.

    Another point about the culture of information. The “size” of problems is often – if not usually – entirely unrelated to the “size” of its potential solutions. Because a problem looks huge, doesn’t mean that its solutions are huge, and because a problem looks small, doesn’t mean that it’s easily solved. That insight is a primary reason I disagree with your “should vs. could” idea – you don’t know enough to judge difficulty of solutions from what you know about problems.

    And there’s nondeterminism. You folks call it uncertainty. It’s a mathematical subdiscipline of computer science. We know it very well.

    Otherwise, the single biggest thing software developers have learned (and don’t forget – software developers are the ultimate source of this information explosion – we made it happen) – is that the greatest challenge is managing complexity. Out of that flows what seems almost a spiritual truth – that the best ideas have an aesthestic simplicity. Edsgar Dijkstra wrote most about this, but others have as well. And beyond that, the best mathematicians will tell you that the best expressions of ideas are the most “abstract” in the mathematical sense. “Abstract” doesn’t mean vague and ambiguous in that sense – it means as complete as possible while as simple as possible.

    “Socialism” and “capitalism”, generally, are abstractions in that sense. Or at least they can be.

    Language is thus fundamentally important – what mathematics calls “domains of discourse” – people have to agree on understandings of language in order to communicate, and the more complex an idea, the more important good abstractions are that express them. Orwell made the point at length in 1984, that an idea for which there isn’t good language to describe it, is an idea that becomes impossible even to think.

    Now for why I’ve been commenting here. You have power you’re not using, sir, with all due respect. Earlier this weekend I saw a picture of the original Obama economic advisory team. There were 5 people – you were one of them. Even if they threw you out on your ear, you still have access that, e.g., I don’t have and may never have. Whatever you think is more important than that access, trust me, you’re wrong about.

    You, Jared Bernstein, are more important that you might realize. You job isn’t educating the public; your job is influencing the President. And it’s not too late for you to do that job.

    I suspect you might be a Buddhist; that’s fine; but I would recommmend you read the book of Jonah in the Old Testament. The biggest problem with prophets is their own reluctance and reticence, and understandably so – it’s not an easy thing to be a prophet.


  15. Duncan Hare says:

    History is rarely about points. Generally it requires people who believe in a bad idea to have to die off before a new idea is acceptable.


  16. No Big Ideas | Just Above Sunset says:

    [...] And Drum points to the economist Jared Bernstein, who thinks Gabler is right about the inability of big ideas to gain any sort of foothold any longer, but says Gabler has it all wrong, as the real issue here is, as it always is, folks with big money protecting their money: [...]


  17. Taryn H. says:

    To add to your list: Winner-Take-All Politics – here is the article that was published before the book:

    http://pas.sagepub.com/content/38/2/152.full.pdf+html

    Makes the same point you make in this post – policy is beings influenced by and for the benefit of those at the very top.


    • perplexed says:

      Great article! Thanks for the link. Actually, its more of a “how to guide;” they should have called it “Government Capture for Dummy’s.” Really makes you wonder where the press was while all of this was going down; oh, yeah, they own them too don’t they, I guess everyone knows that’s the first institution to capture or they start causing all kinds of problems. This movie’s getting really hard to keep watching.


  18. Scott Baker says:

    Jared – you have to expand your reading circle!
    Why are these so-called new economic thinkers still thinking so in-the-box?
    I gave an interview to out-of-the-box thinker Max Keiser in which I suggested 2 out-of-the-box, but thoroughly researched and proven options that would completely turn the economy around and still be within our Free Market ideals:
    – Greenbacker Money: debt-free United States Notes that Congress is enpowered to create anytime, for any reason, and DID create under Lincoln ($450 million) to defeat the South under the Civil War. This money would not have to be borrowed, taxed to pay for, or backed by Gold. It would NOT be inflationary if dedicated towards those areas of society which actually need stimulus (i.e. are in deflation), such as Infrastructure. It is, as Max Keiser put it to me, a “Public Option for Money.”
    – Land Value Taxation, aka the Single Tax. This Georgist idea (I am a third year Georgist student, having completed 10 classes at the Henry George school of Social Science), would end the private collection of resource and locational rent and speculation thereon, thereby curing Land-based booms and busts like the one we are living through, forever. Furthermore, by taxing the 33%-40% of GDP that is “Rent” on location and natural resources, you could untax production, thereby vastly simplifying the tax code, freeing up the vast productive capacity of the United States, and uncorrupting the whole political process by removing the opportunities (as long as the assessors are honest, there’ll be no corruption; this is much easier to check).
    See the video interview here:
    http://www.opednews.com/Diary/Max-Keiser–On-The-Edge–by-Scott-Baker-100320-741.html
    – Another possibility which I didn’t discuss in this interview, but which I’ve written about many times in articles for Huffington Post and op Ed News, is creating a series of State Banks like the wildly successful Bank of North Dakota (est. 1919) to force state tax revenues to be invested in state needs, and not in Wall Street speculative exercises – money which then has to be borrowed BACK, at interest rates of 4, 5, 6%! The pension funds of most states are invested in risky, often underperforming mutual fund type investments. Why not put THOSE into a State Bank, with more reliable, possibly even higher, returns, that could create jobs IN STATE, instead of being invested in everything from China to short positions (I’ve seen the CAFRs and they are shocking)?

    Interview ME!

    – Scott Baker, president of Common Ground-NYC, New York State Coordinator for Public Banking


  19. Misaki says:

    Bad ideas, that do not correctly link to objectives or between concepts, will not spread. It’s that simple.

    There are many “ideas” of different ways for the government to spend money. But in the end, they are all just ways for the government to spend money, and when people do NOT want the government to spend more money all of those ideas become less relevant to a discussion.

    Is the total amount of work going to stay the same (and either have riots or welfare), or will it go up even by introducing inefficiency, or will it go down by sharing work.

    This dichotomy can easily be described in basic terms, but most “paradigms” do not even address this point. All “paradigms” that involve introducing inefficiency can ‘solve’ the jobs crisis and artificially reduce income inequality, but all of these paradigms are also unpopular with the public. One can declare by fiat that a certain idea is clearly visionary and would introduce a brave new paradigm, but no one feels it would advance their goals, that intellectual victory resides only in your head.

    Now, the same argument would apply to ‘ideas’ that involve one of the other options, of reducing the total amount of work done: http://pastebin.com/Wy8B0hK9

    …but in contrast to “paradigms” that involve more spending, that would does not seem like it should be unpopular with the public for any reason. Unpopular with economists, perhaps, because it does not make the magic GDP number go up, but perhaps supporting it would hurt them professionally somehow so it isn’t so important if no economists support something that would fix unemployment.


  20. Gabriel Cole says:

    Astonishingly revealing bless you, There’s no doubt that your trusty subscribers would probably want a whole lot more posts along these lines continue the good effort.


  21. Betty Schier says:

    WHAT’S GOING ON HERE IS “SHOCK THERAPY”

    What’s going on here is “Shock Therapy”, and if you don’t know what that is, you had better find out now, because it is directing our very lives, and the direction it is taking leads only to further disaster.

    To thoroughly understand our political/economic position in our country today, either you must be one of a few elite Disaster Capitalists who seek to erase and remake the world for their own enrichment, or you need seriously to read Naomi Klein’s THE SHOCK DOCTRINE: THE RISE OF DISASTER CAPITALISM, [Copyright 2007, published by Picador, 175 Fifth Avenue, New York, N.Y. 10010.]

    Klein chronicles over three decades of imposition of the Shock Doctrine upon many countries around the world, from Chile and other South American countries, to Russia, to Iraq and more. She sheds a light on the economic doctrine of Milton Friedman (1912-2006), “grand guru of the movement for unfettered capitalism. . . credited with writing the rulebook for the contemporary, hyper mobile global economy.” He called New Orleans’ Katrina tragedy “an opportunity for a permanent reform”, beginning with privatization of public institutions and services. Klein calls these “raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities, ‘disaster capitalism‘.”

    For more than three decades, Friedman and his powerful followers had been “perfecting the strategy of a fundamentalist version of capitalism: waiting for a major crisis, then selling off pieces of the state to private players [for pennies on the dollar] while citizens were still reeling from the shock, then quickly making the ‘reforms’ permanent.”

    The shock doctrine asserts, “only a crisis–actual or perceived–produces real change.” First, free-market ideas are stockpiled. Then “when crisis has struck, act swiftly to impose rapid and irreversible change before the crisis-racked society slips back into the ‘tyranny of the status quo‘.” It gives new meaning to Rahm Emanuel’s remark, “You never want a serious crisis go to waste.”

    Beginning in the mid-seventies, Friedman advised Chilean dictator Pinochet, following his violent coup, “to impose rapid-fire transformation of the economy–tax cuts, free trade, privatized services, cuts to social spending and deregulation.” Sound familiar? “This extreme capitalist makeover became known as a “Chicago School” revolution, since so many of Pinochet’s economists had studied under Friedman at the University of Chicago. Friedman predicted that the speed and scope of the economic shifts would provoke psychological reactions in the public that ‘facilitate the adjustment’, an all-at-once tactic he called economic ‘shock treatment‘, or ‘shock therapy‘, to which were added economic shocks that impoverished millions and an epidemic of torture that punished hundreds of thousands of people.”

    Shock doctrine was imposed in many countries throughout the world for the following thirty years, “the formula reemerging with far greater violence in Iraq, starting with the ’Shock and Awe’ military doctrine“, followed by “radical economic shock therapy–mass privatization, complete free trade, a 15% flat tax, a dramatically downsized government.”

    Amidst these decades of crises–whether natural or created–while the “nexus of Republican politicians, think tanks and land developers started talking about ‘clean sheets’ and exciting opportunities, it became clear that the preferred method of advancing corporate goals [profits] was to use moments of collective trauma to engage in radical social and economic engineering.”

    Through 587 pages of text accompanied by 74 pages of exhaustive documentation, Klein vividly details how, for decades, the right-wing followers of Milton Friedman Chicago School’s Shock Doctrine exploited economic, social and human crises via the strategy of Disaster Capitalism’s shock therapy–enriching the few powerful super-rich at the expense, torture and disempowerment of the many.

    What are the Republicans supporting and calling for in America today? Lower taxes; privatization of government services; free trade; reduction or elimination of so-called entitlements and programs benefiting the needy; reducing the size of government while maintaining the military industrial complex and endless war-profiteering; using “safety” to justify torture, loss of freedoms, and extension of the Patriot act; financing and bailing out banks which hoard enormous amounts of capital that could be used to start new businesses and create countless desperately-needed jobs; and deregulation of financial institutions so that they can continue the same policies that created the economical disaster we are trying to deal with today. Is this not shock doctrine, shock therapy and Disaster Capitalism at work–here and now? I submit that it is.

    Congress is controlled by and dances to the tune of the powerful corporations that finance their election campaigns. The recent Supreme Court decision in the Citizens United vs. FEC (Federal Elections Committee) case, stating that corporations are people, having the same rights as people, and the right to spend unlimited amounts of money to control elections, must not be allowed to stand. To overturn the Supreme Court’s decision, a Constitutional amendment stating that corporations are not people is imperative and urgent. Support the party and progressive candidates which pledge to enact this amendment.

    I respectfully urge you to consider supporting candidates from the Green Party, the only party which is supported by and serves ONLY the people.

    Betty Schier


  22. Jim says:

    A “Big Idea” would be to focus on power instead of money. I applaud this article for pointing out power at all. However, the challenge is that people don’t like to talk about power. Power is often unpleasant and often intangible, so it’s hard to think and talk about. That leaves the entire territory of power open to the people with power, who are very happy that it is not analyzed or discussed.

    But power is just capability. We all have it and need it. The problem is over-concentration of power.

    The potential vehicle for change is moral outrage about the over-concentration of power. The over-concentration of power is immoral because:
    1) When the few hoard privilege and resources, they constrain the many from having rights and capabilities to reduce their suffering (from housing, environmental, health, reproductive rights, same-sex marriage and other issues)
    2) It is very often used to limit the distribution of power, adding to 1)
    3) It is very often used to further concentrate power, adding to 1) and 2)

    The big idea is for the secular progressive think tanks to provide the analysis of the network of “1%” power influences and the actual suffering that that causes, and then can distribute that information to the liberal and progressive media, who in turn can feed that information to the Christian left, who are highly motivated right now behind the “occupy wall street” movement.

    This initiative, the application of moral judgment to the over-concentration of power, can be summarized in the slogan “Question the morality of power”.


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