We’ve embedded the text of the so-called Powell Memo, named for its author Lewis Powell, later a Nixon Administration Supreme Court appointment, It set forth a roadmap for an open ended war to roll back New Deal protections and make America more deferential to the pet needs of businesses. It’s been an astonishingly successful campaign. The corporate profit share of GDP has risen to a level nearly twice the level that Warren Buffett deemed to be unsustainable and has remained there. The Supreme Court has deemed corporations to be persons and has given corporate speech the same privileges in campaigns as personal speech. Class action lawyers, one of the important means for preventing big companies from engaging in small-ticket but large scale pilfering, have been neutered. Unions represent a much lower proportion of workers than they did in the 1960s and 1970s, and have vastly less respect and political clout.
One can go on, but you get the idea.
If you read the memo, you’ll see how lawyers like Ralph Nader and William Kunstler are held up as the sort of foe that must be cut down to size because they have the temerity to say bad things about the way businesses work.
Let me hoist the sections of ECONNED that discussed the impact of the Powell Memo and the conservative war against social safety nets:
Two loose but ideologically aligned efforts strove mightily to pursue a number of big business objectives, including reducing regulation. Starting in the early 1970s, some far right wingers began systematically to market their ideas and discredit the Left. While politics is a realm of hard-fought ideas, the ambition of these extremist conservatives was to reframe popular opinion to conform
to their line of thinking. To a remarkable degree, they succeeded.For instance, wealthy conservative lawyer and later Supreme Court justice Lewis Powell wrote a memo to the U.S. Chamber of Commerce in 1971 that galvanized the right wing. He argued that corporations needed to launch a coordinated and sustained attack to discredit liberals. Among the key elements was the creation of a well-funded effort that looked like a “movement” to press its cause with the media. Generously financed “scholars, writers, and thinkers” would demand fair treatment and “equal time” as the wedge for forcing the press to treat them seriously. In turn, they would recast issues, with the aim of reshaping opinion from the elite to the mass level.
Another blueprint came from former Nixon Treasury Secretary William E. Simon, in his 1978 book, A Time for Truth. Disillusioned conservative journalist David Brock describes its program:
The ideology of Barry Goldwater and Phyllis Schlafly and William Buckley would now be dry cleaned for mass consumption, and along with it came a neolexicon— a language reinvented by conservative practitioners trained in the use of manipulative, often Orwellian, rhetoric. Agenda items like gutting Social Security, rolling back civil rights protection, and slashing taxes inequitably would be smoothed out with deceptive Madison-Avenue-type branding slogans of the type used to sell commercial products: “privatization,” “the new federalism,” the “flat tax” and so on . . . funds would go exclusively to right wing ideologues, with no capitulation to “soft-minded pleas for the support of ‘dissent’” . . . ensuring conservatives would have the unwavering message discipline, ideological uniformity, and seeming unity of purpose that seemed to go missing in liberalism. The work would carry an air of academic independence and authority, but it would be subject to no peer review or conflict-of-interest safeguards.48
Another conservative dismayed by the tactics of the New Right similarly described the new corporate lobbying efforts of the 1970s as “militant.”
In economics, the spear carriers were the think tanks such as the American Enterprise Institute (AEI), the Heritage Foundation, the Hoover Institution, and the Cato Institute. For instance, the AEI funded a series of publications, studies, and has endowed faculty chairs; Heritage prepared a 3,000-page blueprint for the incoming Reagan administration and then, a year in, scored its progress (61% of 1,270 recommendations implemented).
A not-well-recognized issue is that the think tanks moved into a vacuum created by the orientation of economics in the 1950s through the 1980s toward theoretical work. Papers in top academic journals were increasingly inaccessible to the laity. These institutes could thus pick those theories (or simply aspects of theories) that were congenial to their world view. They also provided highly paid employment to economists who did not have a future in academia. For instance, Arthur Laffer, a proponent of supply side economics, said, “I knew there was no way in God’s earth I could make it in the profession. So I went other routes— the press, the political press, consulting.”
What is troubling about these organizations is that their role is seldom evident to the public. Media reports often fail to disclose the affiliation of a researcher with a think tank that has as its sole purpose the promotion of a particular set of policies and ideas. And even when they do, many readers fail to recognize that the economists in the employ of these advocacy groups are lobbyists. Most people have learned not to trust industry-funded drug research. Why should ndustry-funded economic research be any different?
On the other side of the ledger is the cost of this “success”. Paul Krugman pointed out in the 2000s that Europeans didn’t much mind their higher taxes, apparently because they saw they were getting public services they valued. Krugman further posited that Europeans were better at running government bureaucracies than we were. That’s hardly a natural outcome. Starving government bodies makes them less competent, which then serves as an excuse for cutting budgets further. Look, for instance, at the decline of the SEC, once a respected and feared agency, which has been beaten back into not-very-aggressive regulation of retail products due to Congresscritters, particularly back in the day Joe Lieberman, threatening funding cuts if the SEC didn’t come to heel, as well as the appointment of corporate-friendly SEC chairs.
In other words, the neoliberal have succeeded both in making government unduly deferential to business and often incompetent. Even in the Reagan era, the government was interested in and capable of getting to the bottom of bad developments quickly. Ten days after the 1987 crash, Reagan established the so-called Brady Commission to investigate the its causes. It delivered an extensive, detailed report in less than two months (mind you, with the Thanksgiving and Christmas-New Year holidays intervening). I have a copy. It also recommended two reforms, one of which was implemented quickly, automated stock market circuit breakers when markets move rapidly, which have been widely copied in other financial markets. By contrast, as we and others have written, the Financial Crisis Inquiry Commission was a pathetic joke. From one of our many critical posts:
From the very outset, the Financial Crisis Inquiry Commission was set up to fail. Its leadership, particularly its chairman, Phil Angelides, was seen as insufficiently experienced in sophisticated finance. The timetable was unrealistic for a thorough investigation of a crisis this complex, let alone one international in scope. Its budget and staffing were too small. The investigations were further hampered by the requirement that subpoenas have bi-partisan approval along with Its decision to hold hearings with high profile individuals, including top Wall Street executives, before much in the way of lower-level investigation had been completed. The usual way to get meaningful disclosure from a top executive is to confront him with hard-to-defend material or actions; interrogations under bright lights, while a fun bit of theater, generally yield little in the absence of adequate prep.
So with expectations for the FCIC low, recent reports that the panel urged various prosecutors to launch criminal probes were a hopeful sign that the commission might nevertheless come out with some important findings. But correspondence from insiders in the last few days suggests otherwise. One, for instance, wrote, “I’m still in the process of getting the stink out of my clothes.”
In other words, the obsession with appearance management has resulted in seeing post mortems as a yet another means to spin-doctor, as opposed to trying to prevent the recurrence of disasters. And we’ve lurched from one to another: Iraq. Afghanistan. The 2008 crisis. The not-widely recognized knock-on crisis of mass foreclosures and legal fraud, which led to a second financial bailout via a “Get out of jail nearly free” liability waiver to banks. The opioid crisis. Student debt servitude. The gross mismanagement of the Covid pandemic. And our inaction in the face of global warming and mass species dieoff.
By design, neolibearlism has weakened community ties and social cohesion and left us even more poorly equipped to handle the problems bearing down on all of us. I wish I could be optimistic. And I wish even more the perps could be held to account.
00 PowellMemorandumTypescript
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One thing that strikes me about the memo is that to some extent its still essentially traditionally conservative rather than neo-lliberal in its approach. It emphasises ‘saving the system that works for business’ rather than destroying the fabric of socio-economic structures in favour of short term gains.
I’ve always felt that the distinction between neoliberals and traditional conservatives is that the former are dedicated entirely to short and medium term gains for the wealthy or aspiring wealthy. Traditional conservatives, such as represented by mainstream Christian Democracy parties in Europe, always recognised the need to preserve a balance of society, even if it meant short term losses for its core constituency – preserving some element of noblesse oblige, for purely pragmatic reasons (keeping the pitchforks from the door). Neoliberalism is, in effect, a type of ponzi scheme with the ‘winners’ being the ones who grab most of the wealth first. I wonder if the attractiveness of neoliberalism is due to the internationalisation of capital. Old style conservatives wanted their home countries to prosper, neoliberals don’t care so long as somewhere there is a bolthole for them to retreat to.
That’s a fair point, but the fetishization of “free markets” and the creation of a huge apparatus all marching generally in the same direction developed a life of its own.
But the Brady Commission does confirm your view. The old-school conservative response is to preserve the system, and that means having a decent idea of what to patch up.
yeah. this is evident in microcosm in my anecdata and feral anthropology of this place.
since everyone knows everybody, and a great many are related, Shame and Shunning are often effective tools against elite shenanigans
But does it scale?
I know that the originally neo-con adage goes; “All politics is local.” However, nations go to war, not necessarily individual neighborhoods. (If ‘things’ ever do get that granular, then it has been “Game Over” for some time and the corpse hasn’t realized that it is one yet.)
i doubt that it could scale much above this level….which is one of the reasons that this place is such an anomaly….a “gem”, as it were.
the rule of thumb in anthropology is around 150 people for close kinship/social ties…and a max of around 3500.
hard to “know” many more than that.
my county contains around 4500…3000 or so in the one town.
so even though i will forever be a foreigner, and have been here for going on 30 years, i either know…or am at least acquainted with…practically everyone.
wife, and her mom and aunts, all know…rather intimately…a lot more than that…but this is one of their functions in the society out here…as a collective memory…who married who, who’s related, who ran off, who came back, and on and on and on.
i sit and listen to them performing this function…like breathing…just whenever they’re together or on the phone.
so those rule of thumb numbers are likely averages, and likely at the lower end of possibility.
i’ve said many times in these pages that the world would be a much better place if everyone knew their banker…where he lived, who his daughter was screwing, who his wife was screwing, and so on…it’s a check on bad behavior by people with power.
so, in short(lol)….the way our civilisation is currently configured, no…this can not scale.
but splice in some kind of robust subsidiarity, with polities firmly rooted in a neighborhood, or part of town…then yes, it sure could scale.
but we’d hafta root out all the other policies that “encourage” our population to be uprooted, rootless and ephemeral, first.
‘i will forever be a foreigner, and have been here for going on 30 years’
Could be worse. There is a valley in the eastern seaboard of the United States whose inhabitants living there go back centuries. So one guy was saying that his family were known as the newcomers, in spite of the fact that his family had moved to that valley a century ago.
I remember when I was a young teen in southeastern Pennsylvania, a place and time where there were still people who voted Republican because of Lincoln, watching as abortion and homosexuality were added to the mix and, together with rumors of the death of our defacto Jim Crow, successfully used to conflate capitalist extremism with ‘traditional’ conservatism, dislodging the remaining genuinely traditional conservatives from power.
In effect the Invisible Hand was deified. I don’t think this would have been possible if ‘Traditional Conservatism’ of the sort Plutonium Kun speaks of hadn’t itself been fetishized, as it still seems to be. Perhaps mostly in the guise of Centrism nowadays?
Since the whole thing seems destined to go smash, I wonder what (if anything) will replace it?
Yeah,lol….we better get to work on that.
i’ve been the obnoxious evangelist for local ag and general autarky around here for a long time.
but people…while they may be in agreement that that would be cool, nice or even much, much better than the way we import literally everything…cannot justify to themselves the sort of sacrifice that would take…taking food as my example: fresh tomatoes in january, with my rinkydink greenhouse built from liberated trash being one of only 2 greenhouses in the whole county.
but there they are, mounded up on a table in the little local grocery store, without fail…and right next to the ever present avocados.
people may be aware that these out of season impossible tomatoes are provided by slave labor in a third world country…that they get here by the burning of lots of hydrocarbons…and that they are more or less flavorless because the variety was bred for shelf life, and that they’re picked green and “ripened” at the produce terminal by application of rarefied ethylene gas.
but they’ll buy them without thinking.
expand the unwillingness to forgo tomatoes for yer thanksgiving spread into most areas of modern life…the problem is too enormous and multifold for people to be able to do anything about it.
i have long held that peak resource, peak economics and peak climate will one day force the issue…most people i know willing to have a beer with me in a pasture would readily agree with that. but when i go further, and say, “well…shouldn’t we be building a better way now for that eventuality?”…it gets too real…it will effect them, right now…where will the beer come from? the gasolene? and an hundred other things we rely on every day
The Jackpot, of course. (Search NC if that term doesn’t ring a bell.)
I find it deeply ironic that the Hoover Institute published “How FDR Saved Capitalism” in 2001.
https://www.hoover.org/research/how-fdr-saved-capitalism
So well said, thank you.
Because we do not want him to bounce back
Although it would be more powerful were the author MMT aware*, Nancy MacLean’s 2017 book Democracy in Chains is a very important related read.
(*She unfortunately buys the argument that taxes pay for stuff at the national level – that the national government is essentially just another currency user – which is the primary justification used by these super-wealthy predators for what they’ve done and want to do.)
P.S. To be direct and public: After several years of using “aliteralmind”, I’ve decided to change my NC username to Activist #MMT, which is also the name of my podcast. MMT-related topics comprises the majority of what I comment on and write about anyway.
This socialist sees MMT as just another means to preserve capitalism by means of state funding of the poor to keep buying stuff from corporations. There’s nothing to stop a state with full MMT from privatising everything. Socialism means to reduce the use of money to the minimum, public services free at the point of delivery, not giving a minimum to everyone so that we can all keep corporations going.
https://www.jacobinmag.com/2019/02/modern-monetary-theory-isnt-helping
That Jacobin post is by self-described “sound finance socialist” Doug Henwood. Here are three responses by MMTers to his so-called critique:
– Pavlina Tcherneva: “Henwood is tethered to the wealthy by an imaginary umbilical cord. Time to cut the cord. MMT has a profound emancipatory power.”
– Co-authored by Scott Ferguson, Nathan Tankus, Rohan Grey, and Raul Carrillo: “For Henwood, the left’s role is merely to argue extra hard for corporations and the wealthy to pay their ‘fair share’ of taxes.”
– L. Randall Wray: “Henwood’s posted a critique that amounts to little more than a character assassination. It is what I’d expect of him in his reincarnation as a Neoliberal critic of progressive thought.”
Henwood should also be very proud to be included in a list of so-called progressives quoted by the March 2021 very-Republican resolution to “abandon Modern Monetary Theory”.
Ad hominems and guilt by association in this venue? I would think that the proper response to Henwood would be to show that he is wrong about MMT, not insist that he is a bad person or is associated with bad people.
I take back the sarcasm (“should also be very proud”).
Being quoted in a Republican resolution as he is, and the nonsense of the quote itself (below) is indeed quite a red flag for me.
Far too many readers apparently do not know what “ad hominem” means and therefore sling the phrase around to make bogus attacks. It is the reverse of argument from authority. “Oh, that’s bunk, you can’t believe anything Kamala Harris says, except maybe related to blow jobs.”
Attacking an argument in cutting terms is not ad hominem. Saying that a person repeatedly makes a certain type of bad argument is also not ad hominem.
The only one of the three listed quotes that might conceivably be mistaken for ad hom is Wray. But is its NOT ad home for Wray to call out Henwood for engaging in ad hom. It is also not ad hom to describe Henwood’s work as neoliberal, which having been on panels with Henwood and read some of his overheated and wildly off base attacks on MMT, is accurate.
I’ve known Doug Henwood for many years, and have appeared on podiums with him. (He was nice enough not to cite me in his attacks on MMTrs.)
The general critique by the 1990s was that he felt very insecure around academics. This was clear at his Left Forum appearances in New York. He feels threatened. And all us MMTrs are academics.
But there’s a deeper problem with the left. MMT is neither left nor right-wing. It simply explains the monetary, financial and tax system. So it’s quite true that MMT’s leading exponent, Donald Trump, is a right-winger, as you saw with his tax cuts.
The problem is that the left focuses on just one problem: employer exploitation of wage labor.
OK, all us MMTrs agree with that. But we see that there are OTHER forms of exploitation as well — and ways to avoid these other exploitative forms.
Again and again, we run up against the criticism: “You’re not talking about OUR problem: wage labor.” They imagine themselves to be Marxists, but have not even opened Vols. II and III of Capital.
By the way, David Harvey and I have experienced the same problem in China. When Randy calls us “heterodox,” he really means more heterodox than tunnel visioned.
You would be wrong to think that what you think is MMT’s main objective is what you say it is. Its objective is to describe, correctly, the way the national economic system works. It isn’t socialist; it isn’t right-wing; it isn’t left wing. It is simply an empirically correct way of characterizing the nation’s economic system. Hence, it is not ‘just another means to preserve capitalism’. This is an exceedingly misleading, if not completely false, way of characterizing MMT. It is clear you know little or nothing about the theory. One misleading Jacobiin artcle is not sufficient to turn you into a responsble critic. Socialists can use MMT to their benefit also. There is nothing inherent in MMT to stop them.
MMT is based on maxims which are generally agreed upon in economics. Even by those that disagree with the MMT approach. What really MMT says is that the economists apply the maxims in the wrong order. People then believe that MMT is advocating for policy makers to adopt this new order of maxims . Which is not the case. MMT says that policy makers are already using MMT processes.
Agreed. I don’t understand Henwood’s objections. However, even as a fan of MMT, I don’t think it provides an answer to everything. For instance, it does appear to be true that everything could be privatized under MMT, although that’s such a far-fetched outcome that it amounts to a strawman argument.
But when it comes to reducing income inequality, wouldn’t the capacity for that under MMT be rather limited? If we suddenly — by whatever means — distributed more money to the middle and lower classes, wouldn’t it tend to be inflationary? And taxing more money away from the fabulously wealthy is not something that MMT would require, as I see it, since those guys by and large are not spending in a way that contributes much to inflation.
On the plus side, MMT grants much wider scope for public investment than we currently have. What’s unclear to me, however, is how that spending might have to be balanced against taxing more from the middle and lower classes to keep inflation in check, even though these taxes don’t pay for public investment. Perhaps taxes wouldn’t need to be raised much, if at all, since people could be hired away from the private sector to perform useful public service rather than, say, flipping burgers to generate more cases of heart disease and Type 2 diabetes.
Doug Henwood used to publish a newsletter called Left Business Observer. In 2008 he became a cheerleader for Obama’s bank bailout. He never defended it coherently – just kept publishing the same pucture of a naked man in a barrel. We gave up on him at that point. Whatever Henwood is, he ain’t a leftist.
“If we suddenly — by whatever means — distributed more money to the middle and lower classes, wouldn’t it tend to be inflationary? And taxing more money away from the fabulously wealthy is not something that MMT would require, as I see it, since those guys by and large are not spending in a way that contributes much to inflation. ”
near as i can tell, the spending habits of the superrich is not the point…removing excess money from the economy is.
taxing $ out of existence is how MMT handles inflation…and if that pool of excess $ is in rich bank accounts in the caymans, that’s where the taxperson must go with their annihilation wand.
the point is having enough $ distributed around so as to maintain productivity…by definition, rich folks’ excess cash is non-productive*, and should rightly be annihilated.
(*i don’t remember the numbers…but it was very, very large…of all that superfluous money, held by our betters, just sitting there, doing nothing…because they already have everything they need, and everything they want, and can’t think of a way to spend all that excess…and don’t want to give it away, for whatever reason…so there it lies, in hidden lockers, unbalancing the whole global economy. to my knowledge, the uberrich don’t even get to go roll around in it, like a certain greedy duck…because it doesn’t really exist, after all)
i consider the very existence of “Billionaires” to be an insult to Humanity.
Absolutely true that MMT does not provide the answer to everything
But trying to develop policies while believing systems work differently than they really work may result in unexpected consequences…
I second your recommendation of MacLean’s book. Democracy in Chains and Evil Geniuses by Kurt Andersen are required reading for anyone who wants to understand how we got to today’s socio-economic reality. Evil Geniuses does discuss the Powell memo and its spawn, and how the (corporate) empire fought back, and won.
no doubt about it, there is plenty of blame to go around. but here is where the real damage came from, and why we can never recover till those polices have been reversed.
the failure of clintonism: what we face today is 100% traceable to bill clintons disastrous policies: Bill Clinton ratified reaganism long before Newt Gingrich led the GOP to victory in the 1994 congressional rout or Clinton sought to triangulate with his opponents in 1995 and after.
basically this is a blow by blow coverage on how bill clinton turned americas largest political party into a disastrous shell of its former self. as well as how he ruined america
Globalization has made the financial elite who donate to politicians very wealthy. But it has left millions of our workers with nothing but poverty and heartache. America became the world’s dominant economy by becoming the world’s dominant producer … creating the biggest middle class the world has ever known. But then America changed its policy. … We allowed foreign countries to subsidize their goods, devalue their currencies, violate their agreements, and cheat in every way imaginable
robert reich supported the nordic model to as a utopia against the inevitable race to the bottom free trade creates, of course today the nordic model is in smoldering ruins:)
bill clinton created the bomb, lit the fuse, and exploded the bomb that would engulf the world in a economic fire storm in 2008.
https://prospect.org/health/fabulous-failure-clinton-s-1990s-origins-times/
A Fabulous Failure: Clinton’s 1990s and the Origins of Our Times
by Nelson Lichtenstein
January 29, 2018
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While I agree that Clinton represents the abject betrayal of labour by the Democrats (as does Blair for Britain’s Labour Party) the process began much earlier — see Judith Stein’s “Pivotal Decade.”
yet the start of the counter revolution against the new deal could be the construction of the mount perlin society, the McCarthy witch hunts were clearly aimed at truman to try to get the new deal over turned, and getting Gatt amended because truman would not, into a across the board free trade corporate rule vs. democratic control.
the constant drum beat i heard as a boy that protectionism keeps rearing its ugly head, the assassinations of the kennedys. than the fraudulent nobel prize for economics.
the powell memo is important. but not the linch pin that started this.
carter, reagan, and bush all did incredible damage, but that damage was small time compared to what bill clinton did. ask yourself, did he ever sleep.
2008 and beyond, that was nafta billy clintons making. he took a meat ax to americas civil society, standard of living and middle class.
something that his predecessors including powell could never accomplish.
he went beyond the betrayal of labor, the massive dereglations, free trade, privatizations, tax cuts for wealthy parasites and the jim crow laws affected just about everyone but a chosen few.
if you want the real neo-liberal icon, it was bill clinton.
If you’re going to read Anderson’s Evil Geniuses – and you should – I’d recommend you start with his earlier work Fantasyland.
Among other things, it’s the best attempt I’ve seen at explaining how crazy ideas can sell so well in the US and last so long in the face of evidence.
Highly recommended.
the resurrection of the charlatan Frederick Hayek by the koch brothers.
Cas, Lance, and Pwelder, thanks for the links to the American Prospect piece and Kurt Andersen’s books. I can make a third vote for Democracy in Chains as well.
you are welcome. and thanks for tip on the book.
Hi Yves, would it be possible to get a citation on the below quote? Sounds very interesting and I’d like to read further. Unless I’m just blind and missed it in the above article…
The quote was from ECONNED.
In Canada we have our own vile entities of this sort (invariably sponsored by Big Oil) — the Fraser Institute and the Montreal Economic Institute (MEI) being the most egregious. A less disgraceful example is CD Howe, though it’s no prize either. The University of Calgary is also disgraceful.
One of my recent reads was a book on Nader and General Motors. The gist is that Nader’s crusade was a PR disaster for GM which went from America’s most respected company in polls to a laughing stock for, among other things, sicking private detectives on the bachelor Nader to follow him, dig through his past and try to entice him into sexual compromising situations. The book claims that the Corvair wasn’t as bad as Nader claimed but that seems hard to argue since the early versions would flip out their tails on hard turns if the owners didn’t maintain the recommended tire pressure.
So it was decided that PR disaster needed PR counterattack against the rise of environmental and public interest NGOs that didn’t seem part of the usual bribable politics. This didn’t really save the US auto industry dominance, as we now see, but perhaps did change everything else.
Or, one could argue, that the triumphant post WW2 American capitalism had simply run its course and we are now in the decadent last stages. Trying to decide which is above my pay grade for sure.
I have been studying MMT for about four years. I read Bill Mitchell’s blogposts daily, bought his two textbooks and ‘Reclaiming The State.’ Attended his recent global classroom introduction to MMT principles. I’m familiar with a list of MMT academics, including Michael Hudson, Stephanie Kelton, L. Randall Wray, and Mariana Mazzucato (The Entrepreneurial State) among others. I’ve read ECONNED and I read ‘naked capitalism’ daily. I am an autodidact. It’s been a breathtaking journey for me. But also frustrating in that although MMT is vastly superior to the neo-liberal macro it is replacing, the pace is far too slow. The dominant macro is, I believe, the largest impediment to our progress–in just about every endeavor you can imagine. It is hemlock to all nations. We do not have the time to await change ‘one funeral at a time.’
Exactly. I share those sentiments and the path you’ve traveled. The thing that puzzles me most is that the decision makers at every level seem so utterly oblivious to MMT, including Bernie Sanders who was advised for a time by Stephanie Kelton.
My suspicion is that at some level these elites do understand MMT, or at least its implications, given their proclivity to “deficit spend” to extravagant degrees at certain junctures. But they also feel the need to maintain the “pay for” fiction, perhaps as a “noble lie” to help keep the masses in check and, more than that, preserve vast fields of opportunity for waste and grift in the private sector to be exploited by their mega-backers.
One funeral at a time, or maybe one mass grave at a time in the neo-liberal world. Those obits are programmed to disappear after the 72 hour news cycle. :(
About that Powell Memo: an opening salvo that led, among other things, to Economic Value Added. What got left out was the rest of the calculation where there was material Economic Value Subtracted, meaning your choices, options, flexibility, potential and liberty. You got accountability, as in zero sum calculations, but your ability to exercise responsibility got reduced.
Visualize the shares to capital and labor graph and that big wedge that extracted the value from labor. Now ask if any politicians are really serious about addressing that or just mouthing slogans and platitudes to get re-elected.
The best critique of the Financial Crisis of 2008 was the 650-page Senate report from the Permanent Subcommittee on Investigations compiled and written by Levin and Coburn. I have read the entire section on Goldman Sachs and it is bang on. Meanwhile, the SEC was becoming a neutered organization that never intended to charge any bank with fraudulent activity and instead only required a payment of money for the bad deed which was far less than the windfall from the fraud. In my opinion, that report was probably “the last great report” that the Senate created up to the present day.
Carl Levin just died in July of this year.
I read about the Powell memo recently in Sarah Chayes’s book – “On Corruption in America And What Is at Stake”
The book starts with the 2015 decision by SCOTUS (unanimous) on McDonnell case, that gave free reign to bribery of politicians…
So, the neoliberals have won. It’s a incredibly hollow victory, very similar to burning the village in Vietnam to the ground in order to “save” it.
Yeah for the elites! You won, you wrecked the whole planet, but you saved us all from the hippies which was what apparently drove you to this madness. And unfortunately, I guess I helped by just trying to live the American dream of having a moderately successful life for my family, but even I could see by the 2000 election that the country was going seriously in the wrong direction.
“saved us from all from the hippies”
Agreed, it was the 1968 demonstrations in USA and Europe that focused conservative minds. Then came 50 years of neoliberal reaction.
When becoming educated enough from readings in economics that led me to MMT I was looking for what financial system engineering would work for a brand new nation. My model has been specifically of a nation of airports. I had invented a currency based on combining the insurance for citizens with the treasury. I see that my thinking was hemmed in by either zero territory or very little. What I want is what Fraport has. We might all benefit from seeing who was the victor of the Econ War against Greece. It was Fraport. While I can tell that the management company Fraport was the victor, exact details of how they were the ones that ended up with territory. It was the ECB that got Greek money and assets. Fraport must have been encouraged by insiders there to buy up the leases for these 14 Greek airports. What is of interest is also has it been a good Victory or in some way bad? If one is anti war as we normally think of it with Econ War as an alternative to that blood gore and destruction then could well be Econ Wars are superior. What could Greece have done to defend itself? MMT would counsel them to have issued their own currency for starters. The targets of Econ War are Puerto Rico and France. France is in a strong position because of colonial possessions in Northern Africa. The assaults on Puerto Rico come from more of the American banking characters in a roil of piracy. Bitcoin magnates converting to dollars collect private deeds and show off with untaxed wealth since deeded property in the PR is not subject to property taxes. As the Reaganites want government is neutered excepting as it is used to prop up property rights. Wealth is for rockets or real estate these days aye?
What States need to know is that great wealth can escape them easily in the US. It is the states that ought be after some powers of taxation since it is the states that actually do need some of their money.
I would have liked to have seen Warren Mosler win in the Governor’s race in the US Virgin Islands just to see his victory in the Econ Wars. He knows what to do with currency. In the end of it we can see Econ Wars as great since they are won with intelligence about who has what and who wants what when the weapon is fiat currency.
I think the focus on the Powell memo as the start of the rightward shift in US politics ignores the Democrats, the dog that didn’t bark. The New Deal/Cold War empire that the Democratic Party had constructed depended on the competitive dominance of US multinational corporations, as Thomas Ferguson explains in his investment theory of politics. That global economic dominance was undermined by the cost of the Vietnam War and the maturing of Europe’s and Japan’s rebuilding after WWII. The Tet offensive in 1968 forced the recognition among the US ruling class (the Wise Men meeting with Johnson) that its Cold War regime could no longer be sustained in its original form. Gold outflows, dollar crisis, Nixon’s New Economic Policy, and recognition of China all followed as a result. Powell’s memo was just a summary of the economic implications of these larger political changes, changes that meant the Democratic Party would no longer defend New Deal policies or working class economic interests in the face of intensifying international economic competition.
Thomas Frank in The People, No dates the Democratic Party’s turn away from a progressive agenda precisely to the evening of July 20, 1944, when during the national convention the bourbon Democrats and the big city machine bosses teamed up to adjourn the session as it was on the verge of renominating Henry Wallace for vice president by acclamation. By the next day they’d gotten their ducks lined up to push through the nomination of Harry Truman instead. It’s been all downhill from there.
I came across that portentous moment in another source, which I cannot now cite. It makes sense especially with the benefit of 20-20 hindsight. That day was also when Von Stauffenberg placed the bomb that almost killed Hitler. … and it was my 8th birthday. Had I known these “presents” had arrived, they would have been meaningless. Ah, circumstance.
I would place the turn away from the New Deal’s progressive agenda in 1938 with the formation of conservative opposition to Roosevelt’s disingenuous Supreme Court packing scheme, a scheme which was sprung without preparing the necessary political groundwork. The unions and the working class in general were then integrated into a growing economy stimulated by increasing production for war. In general, the turns in direction of US politics are shaped much more by international military and economic policy than the internal domestic workings of party politics.
The American Far Right/Business mindset snapped to attention after Goldwater was defeated in 1964. You had the moneyed bunch like the Scaifes, Mellons, etc. They called a meeting with such creeps like Weyrich, etc. And they put a plan in place that has worked for centuries. They were very patient. They ran their candidates and pushed the Christian fundie crap. Raygun got elected in 11/1980. Talk about a cosmic curse. Their gang kept getting elected and the stupid mindset kept rising and controlling this country. I have a printed copy of the Powell memo. It reminds me that I am glad I am old and will die soon.
I seriously wonder if this whole conservative movement began as a generational movement. Let me explain. We have seen this with those ex-Cubans in Florida who will eternally hate the Cuban government to the point that this hatred has not only infected their children but their grand-children as well. They reckon the Cuban government owes them and they demand nothing less than the restoration of all that was lost to these families from over 60 years ago.
So lets go back to these business people who were galvanized by the Powell memo half a century ago. Thinking about their ages, I honestly wonder if they grew up as the kids of a generation of business elites that were extremely bitter over what they had lost to the policies of FDR and the high taxation levels that they had to work under. They never forgot and never forgave what FDR had done to them and embedded this resentment in their children.
Come the 60s and the breakdown of American society, they would have thought that this was a fulfillment of what ad been set in motion in the 30s and came to believe that what America needed was the discipline of business to make America pull out of itself. Perhaps I am wrong but I think that it is something to consider.
Ex-Cubans and Confederate flag wavers to the n-th generation. Similar species.
Powell memo same anniversary when Nixon went off gold standard, August 15, 1971.