If you step back a bit, though, all of the players look more like pieces in a board game, whose rules and layout are predetermined. As Karl Marx famously remarked, in “The Eighteenth Brumaire of Louis Napoleon,” “Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past.”
Going into the 2016 Presidential election, our economic inheritance is forty years of income stagnation and rising inequality, which culminated, in 2007 and 2008, in a global financial crisis and a government rescue of bankers and other financial interests. Yes, this bailout has been followed by half a decade of modest G.D.P. growth and strong job growth, but the narrative of inequity, unfairness, and frustrated expectations remains fixed in the public consciousness.
As the Financial Times commentator Martin Wolf pointed out on Wednesday, Latin American-style income distribution leads to Latin American-style politics—populism of the left and the right.
.. In a January poll of likely voters in the Iowa Democratic primary, forty-three per cent of respondents described themselves as “socialist.” And it isn’t just Iowa. A 2011 study by the Pew Research Center found that forty-nine per cent of millennials—defined as Americans between the ages of eighteen and twenty-nine—view socialism favorably, compared to forty-three per cent who view it unfavorably.
.. To my mind, the most striking thing about the Iowa poll wasn’t that virtually half of likely Democratic voters embraced the designation “socialist.” It was that eighty-eight per cent agreed that the word “optimist” described them.
.. In voting for Syriza and Podemos, the Greeks and Spanish weren’t indicating that they wanted to nationalize the means of production or bring back the Comintern. They were rejecting austerity policies imposed by a political system that seemed beholden to bureaucrats in Brussels and bankers in Frankfurt, and they were calling for a return to the Enlightenment ideals of popular sovereignty and popular participation.
.. For all his crankiness, Sanders is tapping into this optimism and providing an outlet for it.
.. If you look at the rise of populism in other countries, you will find that urging people to be realistic is a common reaction from establishment politicians and their supporters. It is a risky response, though. Trotted out too often, or too vehemently, it can make those who rely on it sound suspiciously like one of the “mothers and fathers” that Bob Dylan addressed back in 1964 ..
Patrick J. Buchanan The Civil War on the Right
Millions of conservatives and independents believe it was the Republican policies of the recent past that also failed America.
The Bush-Clinton-Obama trade policies produced the $12 trillion in trade deficits, which measures the net export of U.S. factories and manufacturing jobs, which explain the wage stagnation.
.. In short, it will be difficult for populists to unite with Beltway conservatives in 2016, when the former see the latter as part of the problem, not the solution.
Larry Summers: Will our children really not know economic growth?
Gordon lines up with Silicon Valley entrepreneur Peter Thiel, who has said that, “We wanted flying cars, instead we got 140 characters.” Despite all the hype coming out of Silicon Valley, Gordon believes we are in a period of modest progress. Whereas many observers worry that because of technology there will no longer be work for an increasing share of able-bodied adults, he thinks there will be work for all, but very little increase in productivity. Disturbingly, his reading of history and his assessment of a variety of factors in the current environment that he calls “headwinds” lead him to the judgement that, “headwinds are sufficiently strong to leave virtually no room for growth over the next 25 years in median disposable real income per person.”
Memo To Larry Summers; Middle Class Stagnation Is The Outcome Of The Most Successful Economic Policy Ever
Larry Summers has one of those prelude to Davos OpEds out today. The basic claim is that middle class stagnation is the largest economic problem we face and one about which something must be done. It’s possible, as I do, to argue with the premise, the analysis and the conclusion. As far as I am concerned the major economic problem we face today is that billions of people on the planet are dirt poor, still stuck in peasant destitution. Further, that the rich world middle class stagnation that is being complained about isn’t in fact a problem at all. It’s the result of the most successful economic policy anyone has ever implemented anywhere. And far from us having to do something about it we should carry on exactly as we are, following exactly that most successful economic policy ever, that of neoliberal globalisation.
.. Well, my argument would be and is that that middle class stagnation is actually because of the success we’re having in meeting that moral imperative to help the world’s poor.
.. Third, if it is to benefit the middle class, prosperity must be inclusive and in the current environment this is far from assured. If the US had the same income distribution it had in 1979, the bottom 80 per cent of the population would have $1tn — or $11,000 per family — more. The top 1 per cent $1tn — or $750,000 — less. There is little prospect for maintaining international integration and co-operation if it continues to be seen as leading to local disintegration while benefiting a mobile global elite.
If I’m honest about it I have to say that I just don’t care. Those global poor are much more important.
.. It is there — between the 50th and 60th percentile of global income distribution, which in 2008 included people with annual after-tax per capita incomes between 1,200 and 1,800 international dollars — that we find some 200 million Chinese and 90 million Indians, as well as about 30 million each in Indonesia, Brazil, Egypt and Mexico. These 400 million people are among the biggest gainers in the global income distribution.
.. We set out to make the global poor richer and it was always obvious that this would be somewhat at the expense of the rich world working classes. We have made those global poor richer and it has been somewhat at the expense of those rich world working class people. Well?
Me, I’d say an unfortunate casualty of the most successful economic policy ever. And we certainly don’t want to reverse this because, as Summers says, aiding those global poor really is an imperative.