Friday, May 25, 2012

The Triumph of the Lame

I recently watched a bit of the Intelligence² debate on the question of whether the US Congress should pass President Barack Obama's jobs legislation on PBS between Cecelia Rouse, Princeton economist and former member of the Clinton White House National Economic Council and Mark Zandi, chief economist at Moody's Analytics who argued for the affirmative and Richard Epstein, Law professor at NYU and Daniel Miller, a fellow at the Libertarian Cato Institute, yes the "think tank" owned, in part, by the infamous Koch Brothers, and former member of the George Bush-Dan Quayle transition team who argued that it shouldn't ( I have to say that it was one of the lamest debates I have ever witnessed.

A little background first. I am a trained historian, though some of my teachers and my History colleagues would probably disagree finding my interests in social theory, the sociology of knowledge, social movements, culture wars, and comparative sociological history, well beyond the traditional historical pale. What is really beyond the historical pale, in my not so humble opinion, however, is much of what passes for economics discourse these days.

There are a number of problems with the discourse of much contemporary Economics, and these limitations were on display in all the debaters on both sides of the issue in Intelligence². First, there is the belief of many economists that Economics is a science of the quantitative sort. Second, there is the belief of many economists that humans are rational and that markets are a reflection of human rationality. And third, there is the abstract and ahistorical character of much contemporary economics discourse. Several of these problems rear their ugly head in the debate over the Obama jobs bill on Intelligence².

One of the main contentions of Epstein and Miller, and others of their ideological ilk, is that governmental attempts to stimulate the economy have simply never worked. This contention is simply false. A few examples drawn from real rather than ideologically made history. In the early years of the nineteenth century the government of New York financed and built the Erie Canal stimulating economic development and job creation in upstate New York and beyond into Ohio and Illinois, an economic stimulus which helped make New York City even more the financial capital of the US than it already was and eventually made the City one of the financial capitals of the world. In the 1860s and 1870s the US federal government stimulated economic development, created jobs, and stimulated population growth in areas of the United States with limited settlement by giving railroad companies federal lands to sell in exchange for railroad construction, railroad construction that by the 1890s would tie the United States together and create, for the first time in American history, an American national economy. During the 1930s and 1940s FDR and his New Deal put Americans to work by creating jobs for the unemployed, jobs which provided new workers wages and which in turn stimulated consumption and stimulating the economy making the Great Depression of the 1930s and 1940s much less worse than it would have been otherwise and giving those without hope, hope.

As to Epstein's and Miller's other contention that high tax rates and economic growth have never gone together, that too is simply false. In the 1950s under Eisenhower the US had tax rates of 91% on the very wealthy while still experiencing significant economic growth, the expansion of the housing market, declining unemployment, increased productivity, and the expansion of education among other things.

By the way, the contemporary conservative argument, not all conservatives have historically mouthed the austerity mantra in dealing with budget deficits and debt, that austerity is the best way to deal with recessions and imbalanced budgets, is, empirically speaking, a problematic argument as well. US President Herbert Hoover tried austerity during the Great Depression in the 1930s with little success and eventually had to do an about face and, if limitedly, try to spend his way out of depression. It should also be remembered that in 1937 FDR, thinking that the Great Depression was under control, tried to balance the budget with disastrous effects, FDR after all was a balanced budget sort of guy. The economy almost immediately began to collapse and FDR was forced to resort once again to Keynesian deficit spending. The economy improved.

So why do Epstein and Miller and millions ideologically like them continue to believe in things that contradict the historical facts? The answer is actually quite simple. They really believe the ahistorical and ideological nonsense they utter. Their "reality" has been constructed not fully from empirical facts, in this instance, but out of their own ideological beliefs in much the same manner that ideology constructs the reality of the members of the Westboro Baptist Church. Social theorists and sociologists of knowledge, of course, have long known that culture and ideology constructs the reality of many if not most humans on this planet. Epstein's and Miller's polemical and apologetic rhetoric is simply more empirical proof of this simple empirical fact. It is a pity that these ideologically constructed hermeneutic circles or cages in which many, unconsciously, find themselves mentally imprisoned cannot be broken but that is not how human ways of seeing usually work, something that the continuing vitality of evangelical religion, fundamentalist religions, John Birchism, the belief that Obama is a Muslim, the belief that Obama is not an American, the belief that America is moving toward Muslim shari'a law (we are in Kansas evermore), and the belief that government stimulus never works, clearly shows.

Just so you don't get the wrong impression, I have seen debates on Intelligence² that I thoroughly enjoyed and was stimulated by. I enjoyed the debate over whether men are finshed between Dan Abrams and Hanna Rosin on the yes side and Christina Hoff Sommers and Dan Zinczenko on the no side and I enjoyed the debate over whether too many people are going to college between Peter Thiel and Charles Murray on the yes side and Vivek Wadha and Henry Bienen on the no side. I thought both sides in the debate on whether men are finished made some good points though I thought the Abrams and Rosin side underemphasised the impact of deindustrialisation on men in the US and I agreed with Thiel and Murray that too many people are matriculating into undergraduate programmes across America. Personally I think the US really does need to create a vocational and apprentice educational alternative to the bachelor's degree like they have in Germany and Switzerland. Perhaps if we had this alternative we could stem the black tide of the businessification and professionalisation of the academy and return colleges and universities to their true liberal arts roots.

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