James Kwak Thinks About Lessons from Steve Cohen’s and My “Concrete Economics”
James Kwak has, I think, an attack of pessimism of the will–declares that our current dysfunctional economic institutions and policies benefit the “financial institutions, financial professionals, corporate executives, and rich people” who “basically control the American political system”, and so “things are unlikely to change anytime soon”.
I disagree:
And the uninsured rate is likely to dip below 8% when the remaining nullification states finally expand their Medicaid programs.
James:
: Hamilton Everywhere, All the Time:
Alexander Hamilton is a big deal these days…. Stephen Cohen and Brad DeLong have titled their new book Concrete Economics: The Hamilton Approach to Economic Growth and Policy… about an overall attitude of which Hamilton cited as an exemplar: in short, a pragmatic rather than ideological approach to policymaking…. The best contrast is between the Republican Party c. 1955–which used state power to suburbanize the country, build up the military, and spin off the technologies that turbocharged productivity growth–and the Republican Party of the past 35 years….
The big question is why the we had this major transformation… [1] people suddenly started believing ‘neoclassical’ economic theories about the benefits of free markets (particularly for capital) and small government, and then acted on those beliefs… [2] financial institutions, financial professionals, corporate executives, and rich people generally all stood to gain…. Superstructure, base…. Both stories are true….
To turn the tide, it won’t be enough simply to tell people that they should be more practical and less ideological. Powerful interest groups have to decide that they would be better served by different policies based on different ideas…. But… the very wealthy–who basically control the American political system–seem to be happy with the way things are. Which is one indication that things are unlikely to change anytime soon…
James and the rest of us need to think harder about just how it is that “the very wealthy… basically control the American political system”–how it is that large chunks of the white working class votes for politicians like Mitt Romney who view them as losers:
Forty-seven percent of Americans pay no income tax. So our message of low taxes doesn’t connect. And he’ll be out there talking about tax cuts for the rich. I mean that’s what they sell every four years. And so my job is not to worry about those people–I’ll never convince them that they should take personal responsibility and care for their lives…
In my view, it used to be that there were conservatives and libertarians who believed in small government and low taxes. And it used to be the case that there was the Goldwater turn–that if one only made the jump to the position that the first and most important liberty was the liberty to discriminate against Black people, then you could build electoral majorities for conservative-libertarian economic policies. Maybe, then, with that alliance in place, James was correct
But now there is the new turn–ditching the conservative-libertarian economic policies and doubling down on discriminating not just against African-Americans but “Mexicans”, “Asians”, all Muslims.
And so things are once again in motion. And that is why I think–and Steve thinks–that pragmatic American technocracy may once again become possible.