The “sequester,” a Washington-made $85 billion package of brutal public spending cuts to hit the economy over the next few years, is expected to destroy nearly one million jobs and wreak havoc on working families and neighborhoods. This austerity tsunami comes on top of the calamities of the Great Recession and subsequent economic stagnation, also made possible by a political establishment and an economy largely unresponsive to the needs of the 99 percent. Adding it all together, the near-future outlook for working people is grim, especially for the most vulnerable. This is, of course, if we do not resist and fight back with all our passion and resources.
I find dynamic general equilibrium models — from the Ramsey-Cass-Koopmans versions to the Lucas-Chari-Prescott-Kydland or, if you prefer, to the Woodford-Mankiw versions — very thought-provoking; helpful to one’s critical understanding of social life. They are not necessarily accurate in their “predictions” in a numerical or even algebraic-sign sense, but asking them to bear those fruits is expecting too much from them.
Back in 2001, I read in the New Yorker a Jon Lee Anderson’s piece profiling Hugo Chávez. (You can google it.) Knowing what I know about U.S. society, it stroke me immediately as an influential piece of (perhaps unwitting) propaganda. Anderson, who as a journalist for the New York Times and other outlets has followed Cuba and Venezuela for a long time, offers reports that — by the dismal standards here — one may even view as “progressive.” In any case, it always seems to me, Anderson’s pieces eloquently say much more about his own deep-seated liberal prejudices than about the concrete realities he is supposed to be depicting. As a result, I believe, his journalistic career owes much to the fact that his liberal prejudices conveniently rationalize the global imperial ambitions of the 1% that rules this land.
Hat tip to Robert Naiman for sharing this editorial piece by Bloomberg praising the bottom-up approach followed by Iceland in dealing with the financial and economic crisis and, by contrast, blasting the U.S. and EU approaches:
This is how this country’s economy policy should proceed:
- Military spending should be reduced drastically. The grounds for this are sanity and good international karma (which does work, cf. Cuba’s solid international support at the United Nations).
- The tax cuts for the wealthy should be left to expire. Not only that, but tax rates for the wealthy should go up. The grounds for this is equity, which — as Stiglitz and others imply — will wind up in the medium and long term increasing macro efficiency.
- Taxes should be reduced for everybody else. The grounds for that are both equity and short-term macro efficiency.
- Public spending should increase drastically not only to offset the reduction in military spending and the tax cuts for the wealthy (although the latter is a tiny thing, as the spending by the wealthy is barely affected by tax changes), but more importantly to hit full employment. The grounds for all this is macro efficiency.
How are Marxists to approach electoral politics in the United States? This is a hot question for us to ponder in the aftermath of Obama’s reelection. I would like to pose it in the most general way. But, before I get to it, let me explain more precisely what I regard as the specific essence of Marxism, so I make myself clear.
At first, I thought I’d devote my blog to commentary on politics and economics, mostly driven by news. At some point, I started sharing some of my notes on socialism. But then I stopped doing that, as I realized that many of the notes were rather unintelligible to readers.
An addendum to my previous post on incentives and ownership. This is Marx’s take on the section of Hegel’s Philosophy of History (1837, http://bit.ly/97F6dv) that I quoted (and on the portions that follow it). It is drawn from Marx’s Capital (1863-1883, vol. 3, ch. 37, http://bit.ly/X3OlQS):