“The Macro View of Economics and Time”

“The Macro View of Economics and Time”    Jan. 12, 2020   Dr. Roger Ray  

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George Monbiot writing in the Guardian    Nov 14, 2016     

The events that led to Donald Trump’s election started in England in 1975. At a meeting a few months after Margaret Thatcher became leader of the Conservative party, one of her colleagues, or so the story goes, was explaining what he saw as the core beliefs of conservatism. She snapped open her handbag, pulled out a dog-eared book, and slammed it on the table. “This is what we believe,” she said. A political revolution that would sweep the world had begun.

The book was The Constitution of Liberty by Frederick Hayek. Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism. It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone.

By way of a “save the date” notice, I am pleased to tell you that our guest speaker for our annual conference on the first weekend of August, August 1 and 2, of 2020, will be the producer of my favorite news podcast, The Best of the Left, Jay Thomlinson. Our conference will be about the future of the news media as we see print media rapidly going extinct and the explosion of cable news and internet based sources from podcasts and YouTube are growing in influence… some of which is good, and some of which is very very bad.

I consume a lot of news. Being well informed is crucial to my job, and so I pay attention to TV, radio, print, and internet news sources to the tune of several hours a day but the most useful of my news sources is this podcast that Jay and Amanda put together twice a week because, while most of my media diet is concerned with what has happened in the past 24 hours, Jay and Amanda will produce Best of the Left episodes that pull the camera lens back to take a wide angle view of an issue. You can learn a lot about the world by drilling down into the microscopic details but you can’t really grasp the flow of history by only thinking about this past week or the last day. I really appreciated an episode Jay and Amanda produced in November of last year that looked at the rise and fall of periods of economic history between the Civil War and our current election cycle. 

Because of the way most of us are fed the news, we tend to see the political battle lines as a constant, a struggle between liberals who want a more compassionate economy that provides services for the poor and the general population, vs a more conservative view which fuels the creation of wealth through industry and investment. 

But the truth is that there are economic eras. The line between what is a moderate view and what is a radical view slowly moves through the years. If I can ask you to consider the span of time from the end of the Civil War until the present. At the end of our nation’s practice of slavery, when the whole economy of labor and production was going to have to be recreated, there was a promise made to freed slaves that they would be allowed to claim a portion of the land where they had worked, not to exceed 40 acres, and to take a mule with which to work the land. This would have given black families a fair start in the American economy.

The assassination of Abraham Lincoln, and the subsequent inauguration of Andrew Johnson brought that plan to a halt. Johnson was a southern racist who was determined to keep black people in an inferior, secondary role in America and though the extremes of his racism resulted in him being the first American president to be impeached, he remained in office just long enough to reverse much of the progress that had been won on the battle fields of the Civil War.

Slaves who had built this nation’s churches, government buildings, and agriculture were freed but left penniless, inheriting a destiny marked by poverty and violence that lasted for more than a century and the shadow of that time continues today. I am not going to talk about reparations today but if you consider the value of 40 acres and a mule, compounded by 160 years of accumulated interest, you see what the rational price tag of reparations would be. 

The industrial revolution that followed the Civil War created a lot of wealth, but it went to the owners of the industries while most Americans remained locked into poverty, especially the decedents of freed slaves. So, the “Great Depression” saw the crash of an old economic era of exploitation and deprivation. With the nation economically on its knees, we saw a new era ushered in with President Franklin Roosevelt’s “New Deal” which was furthered by war time spending in WWII. It was wartime demand that created a manufacturing base in urban areas which  allowed for the emergence of  stronger middle class that largely included communities of color. 

It was the rise of a black middle class, with its related increase in access to education, that fueled the Civil Rights movement, giving it educated and articulate leadership that changed the world. So, from the Civil War to the Great Depression was one economic era, then from FDR’s New Deal through the Johnson “Great Society” measures of the early 70’s was another economic era. 

It ended with two large events: the massive inflation during the Carter years and the election of Ronald Regan. The Regan Revolution brought in an era that cut taxes on the wealthy and services to the poor under a neo-liberal Keynesian economic system that rolled back regulations and began a world changing transfer of wealth from the poor and the middle class to the top of the economic pile . . . a trend that has now continued for two generations. 

All of you here can likely remember that families in the 50’s, 60’s, and 70’s often had only one bread winner and they were able to own a home and live a middle-class lifestyle. Neither of my parents had a college education and while we did not live as well as my cousins whose parents were professionals, we lived in a 4 bedroom, two bath, home in the suburbs and my dad retired at the age of 62. That was normal during the progressive tax structure in the decades following the New Deal. Since the Regan tax era, that life has disappeared and now it takes two incomes, home ownership is often a dream and retirement just about doesn’t exist.

We have reason to believe that this current economic era is dying and has been dying for a decade or more. The last throes of their death rattle is evident in the fact that this draconian world view is no longer shared by the majority of American voters. Conservative, neo-liberals have only been able to maintain elected seats in the past few years by appealing to prejudice, blowing dog whistles of racism, homophobia, xenophobia, and by ginning up fear of terrorists and immigrants. 

That coupled with seeking assistance from foreign totalitarian governments such as Russia and Saudi Arabia, while suppressing votes among the poor by Gerrymandering, removing people from the voting rolls, and making it increasingly difficult for the poor to vote. In short, Republicans have only held the White House or majorities in the legislature over the past generation by cheating. . . which would be a horrible thing for me to say in a pulpit were it not so obviously true. 

What it means to be a conservative, and what it means to be a progressive or a liberal, changes with time, as the political pendulum swings back and forth. Those of you who have studied Political Science will remember the concept of the Overton Window:  What it means to be a moderate is to be in the middle of where ever that window is in any particular time but the window is always moving, albeit slowly.

Consider this, I was born in 1956, a dozen years after the flourishing of the post-war manufacturing boom. In that year, Republican President, Dwight Eisenhower was running for re-election. This was his campaign platform:

I don’t want to take the time to read this word for word, but look at Eisenhower’s political priorities . . . as a former military general and Republican president:  worker safety, employment protections for the handicapped and elderly, unemployment insurance, pension protections, equal pay for men and women, extending minimum wage laws, fighting employment discrimination against race, gender, or immigration status, and vigorous protections of labor unions.

In 1956, Dwight Eisenhour was more progressive as a Republican than Bernie Sanders is today as a Democratic Socialist. You see how the Overton Window moves to the left and the right through various economic eras.

We see it playing out in this year’s presidential primary season. Just four years ago, the ideas that got Sanders labeled as being crazy: tuition free higher education, universal healthcare, taxing the rich, and guaranteeing a living wage, are all now mainstream ideas. They were considered to be fringe ideas just four years ago and now the same issues have gone mainstream and seem to be imperative. 

Four years ago, the Democratic Party was still locked into Regan era economic beliefs and could hardly imagine anything else as being electable . . . and maybe they were right, to a certain degree . . . I’m just saying that times have changed. 

As religious people, we have always been concerned about social and economic justice. We have always been advocates for the poor and we have done what we could to provide direct aid. We started this church 12 years ago and before we paid a dime in salaries or so much as bought a hymnal, our first project was to build a $50,000 playground for the kids who lived in a homeless shelter. Every single week and month of our existence, we have tried to raise necessary supplies for the local homeless. We have served tens of thousands of meals and distributed untold numbers of coats, sleeping bags, hats and gloves.

But folks, we always knew that this is not a solution to poverty. These efforts were always symbolic . . . momentarily meaningful to hundreds of people . . . but this is not a solution to poverty. We don’t need to raise 500 tents and a thousand sleeping bags for Springfield’s homeless. We need to change the economic system that keeps creating poverty. 

All of our years of making hamburgers and cakes, all of our efforts at feeding the hungry and getting helpful resources for the homeless was not a solution . . . no, these were exercises to foster compassion in us as much as it was to put a short term band aid on hunger and homelessness. We practiced compassion to make it part of who we are, a part of our faith, our religion, and now we come to a time when we will accept nothing less of our society, our government, our economy. 

I realize that if you just watch the news over the past few months as environmental protections have been rolled back on air and water pollution, protections for endangered species, and fuel efficiency standards, and if you just look at the micro movements of a seriously evil administration, you can feel like we have lost the moral battle for the soul of America. And I know that you may find it hard to believe me on this point, but when I step back and look at the arc of my own lifetime, the change from the era of the New Deal, to the Regan era of economic cannibalism, I see these draconian steps that Trump is taking as the last gasps of a dying empire built on Keynesian economics and a savage lack of compassion. 

There are those, especially the talking heads on network news channels and the billionaires who pay them millions of dollars to keep spewing propaganda at the voting public, who keep saying that the only way to beat Trump is to run a candidate against him who is almost like him in terms of economic policy, but who has more class and who doesn’t Tweet as much. They warn constantly that the left is in danger of wanting to go too far.

I will defer to the political insight of the smartest man alive in the world today, Noam Chomsky, who has lately said: I find it psychologically impossible to discuss the 2020 election without emphasizing, as strongly as possible, what is at stake: survival, nothing less.  Four more years of Trump may spell the end of much of life on Earth, including organized human society in any recognizable form. Strong words, but not strong enough. . . he added, The Democratic Party, in its apparent determination to kill the left wing, may very well end up ensuring a Trump electoral victory for a second time.

https://truthout.org/articles/noam-chomsky-democratic-party-centrism-risks-handing-election-to-trump/?utm_source=sharebuttons&utm_medium=facebook&utm_campaign=mashshare&fbclid=IwAR0wk4zlB8K3IQYd7HEMaNZgGFCWqGB3E-O3noVhwrmM34JijgvZCZl1VwQ

If you will indulge me a moment to wade into the weeds once more for just a moment. Economics is a kind of theology that requires more faith than most of what you would read in the Bible. But Keynesian economics is being replaced by the Modern Monetary Theory. That is, while the money supply is, in as much as it is based on available wealth, not unlimited. But it is limited only by full capacity production.

As long as we have idle manufacturing plants and unemployed people, we have not reached the maximum of wealth creation. We have more empty houses in America than we have homeless people . . . we don’t have a limit of wealth, we have a limit of compassion . . . and that is why churches exist. 

We have the resources, in terms of farmland, clay, sand, stone, cement, and labor, for everyone to eat well, be housed, educated and be medically taken care of. What we lack is sufficient political leadership and moral courage to do it. What I am trying to tell you today, in between the Overton Window,  Keynesian economics and Modern Monetary Theory, is that it is time for the economic era to turn the page of the calendar. I’m saying that the evil corruption of cannibalistic capitalism can go no further. It cannot be allowed to eat another generation. 

In the years after the Great War, J. R. R. Tolkien wrote his “Ring Trilogy,” a classic work of fiction, which, like all great fictions, symbolically told the story of the epic battle between good and evil. And as a great work of fiction telling that story, it is full of symbolism and inspiration. 

The good people of Middle Earth were threatened by the rising power of a Dark Lord who had to be stopped. The fellowship of Hobbits, a dwarf, and elf, a wizard, and a couple of brave men, set out on a treacherous journey to keep the Dark Lord from acquiring the power he needed to bring Middle Earth to an end.

In a desperate move, the fellowship took to an underground passage that took them through the deserted mines of Moria. There they came face to face with a fiery  demon of ancient days. The wizard Gandalf explained that the dwarves, in their greed, had gouged the earth too deeply, awakening an evil they could not survive.

Well, that doesn’t take a lot of excruciating interpretation does it? This economic era of capitalist cannibalism has eroded the middle class, increased the suffering of the poor, and even turned to spoil our lakes, rivers, our air, and our land, in a fairy tale of continuous economic exploitation. 

Those of us who have lived for three generations and more . . . we know how morally bankrupt this economic system is. And we know that it cannot go on any longer. 

In Tolkien’s masterful tale, the seemingly fragile old wizard makes a heroic and self-sacrificing stand on the last bridge leading out of Moria, and there he tells the Balrog that he shall not pass. 

Yes, we too face a demon resurrected from the days of the Civil War, a demon based on greed, racism, violence, war profiteering, and spoiling of the earth. And
Gandalf gives us our line . . . this year, this cycle, as this economic era comes to an end, we say to that demon, “You shall not pass.”