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(Mainstream) Economists On The Run

by ARGeezer Sat Oct 24th, 2020 at 08:49:18 PM EST

Que Schadenfreund

Economists on the Run - Michael Hirsh, Foreign Policy


 Paul Krugman has never suffered fools gladly.... In a series of books and articles beginning in the 1990s, Krugman branded just about everybody who questioned the rapid pace of globalization a fool who didn't understand economics very well. "Silly" was a word Krugman used a lot to describe pundits who raised fears of economic competition from other nations, especially China. Don't worry about it, he said: Free trade will have only minor impact on your prosperity.

Frontpaged with minor edit - Bernard


Now Krugman has come out and admitted, offhandedly, that his own understanding of economics has been seriously deficient as well. In a recent essay titled "What Economists (Including Me) Got Wrong About Globalization," adapted from a forthcoming book on inequality, Krugman writes that he and other mainstream economists "missed a crucial part of the story" in failing to realize that globalization would lead to "hyperglobalization" and huge economic and social upheaval, particularly of the industrial middle class in America. And many of these working-class communities have been hit hard by Chinese competition, which economists made a "major mistake" in underestimating, Krugman says.

It was quite a "whoops" moment, considering all the ruined American communities and displaced millions of workers we've seen in the interim. And a newly humbled Krugman must consider an even more disturbing idea: Did he and other mainstream economists help put a protectionist populist, Donald Trump, in the White House with a lot of bad advice about free markets?

Invented just for the occasion "hyperglobalization" is the new fig leaf behind which to hide all of the sins of his and 'Mainstream Economic's past three or four decades. Who knew 'globalization' could cause so much harm? And Larry Summers has now come around to supporting much more deficit spending. Perhaps the prevailing winds of 'Mainstream Economics', especially as expressed in media article, will be blowing in a helpful direction - for a change.

Of course there were dissenters to the 'globalization is good' consensus. But meanwhile great damage has been done.

Dani Rodrik, a Harvard University economist who in 1997 published a then-heretical book called Has Globalization Gone Too Far?, said last week that he wrote it precisely because he believed that "the profession was so blasé about globalization." Now his views are mainstream, and Rodrik is president-elect of the International Economic Association. But the economists have barely begun to clean up the mess they left behind, as a recent conference on inequality at the Peterson Institute for International Economics in Washington, organized by Rodrik and former International Monetary Fund (IMF) chief economist Olivier Blanchard, made clear. And now in some ways it's too late because, as Rodrik says, it's not even possible to have a reasonable discussion under Trump. The U.S. president has effectively discarded modern economics, reembraced crude protectionism, and, like the mercantilists of the pre-Adam Smith era, appears to see trade as a zero-sum game in which surpluses are in effect profits and deficits are losses. His ignorance of basic economics "is without parallel among modern American presidents," Appelbaum writes in The Economists' Hour.

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Who knew 'globalization' could cause so much harm?

Anyone with a functioning brain and basic Critical Thinking Skills?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Oct 25th, 2020 at 03:20:12 PM EST
Hell, Ross Perot had it figured out in the 1992 election, and everyone just laughed at him.
by rifek on Fri Nov 13th, 2020 at 09:35:13 PM EST
[ Parent ]
The other area of mainstream economics that has changed utterly is the issue of deficit spending at a time of recession. We are all Keynesians now, apparently, with the Chicago school v. Passé.

In Ireland, deficit spending is almost 10% of GDP compared to the Masstrict Treaty maimum of 3%, and we have a Finance Minister who has read and favourably reviewed Piketty's Capital in the Twenty-First Century.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Oct 25th, 2020 at 04:34:35 PM EST
We're not structural Keynesians though. The money is being spent to keep the economy from imploding, not to grow it for the future with spending on education, services, and infrastructure.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Oct 25th, 2020 at 05:13:41 PM EST
[ Parent ]
In the case of Ireland, its both, with much of the increased expenditure being in health and education which will be ongoing.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Oct 25th, 2020 at 05:38:31 PM EST
[ Parent ]
That's reassuring for Ireland, but unfortunately doesn't seem to be common elsewhere.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Oct 25th, 2020 at 08:42:30 PM EST
[ Parent ]
In the US it's effectively all going to keeping the pump-and-dump FIRE economy going to siphon all assets to the 1% and their minions.
by rifek on Fri Nov 13th, 2020 at 09:39:42 PM EST
[ Parent ]
Maybe a contributing factor was nationalist unions: AMERICAN Federation of Labor, GERMAN Federation of Trade Unions, FRENCH Democratic Confederation of Labour, etc. Maybe there should have been some thought about how, in an environment of global corporations and global banking and global trade, the labor union movement also needed to be global.
by asdf on Sun Oct 25th, 2020 at 04:44:23 PM EST
There you go:

Inside Amazon's global worker movement

But the real challenge to Amazon management isn't from publicity stunts. It's coming from a new, digitized, international labor movement that is borrowing from the e-commerce giant's own playbook to press for higher pay and better working conditions around the world.

Known as the Amazon Workers International, the informal network of mostly warehouse workers brings together dozens of worker groups from the United States and six EU countries. With hundreds of participants, it is growing fast. Instead of gathering in person or joining picket lines, the AWI's key organizers do most of their work in videoconference sessions where "comrades" from multiple countries Zoom in to plot strategy on how to press their demands to Amazon management.

"Can you hear me?" Polish warehouse worker Agnieszka Mróz said late last month as she connected from her hometown of Poznań with French and Italian colleagues gathered a thousand kilometers away, at the office of French union Sud Solidaires in an old railway factory in Lille, northern France. Other workers from Poland, Germany and the United States had also joined the call, AWI's annual gathering, to discuss Amazon's response to the pandemic and upcoming actions.

The network's online-first approach -- and the emphasis on international coordination -- underscores a lesson that these workers have absorbed over the last decade: They have little chance of winning concessions from management if they pitch demands locally, via traditional union methods.

by Bernard on Sun Oct 25th, 2020 at 06:30:31 PM EST
[ Parent ]
Is Amazon in China or India or Brazil?
by asdf on Sun Oct 25th, 2020 at 07:43:37 PM EST
[ Parent ]
Amazon China (Chinese: 亚马逊中国), formerly known as Joyo.com (Chinese: 卓越网) is an online shopping website.[2] Joyo.com was founded in early 2000 by Chinese entrepreneur, Lei Jun in Beijing, China.[3] The company primarily sold books and other media goods, shipping to customers nationwide. Joyo.com was renamed to "Amazon China" when sold to Amazon Inc. in 2004 for US$75 Million.[2] Amazon China closed its domestic business in China in June 2019,[4] offering only products from sellers located overseas.
- from Wiki.

The company's largest campus outside the United States was inaugurated in Hyderabad, India in September 2019.
- from Wiki

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 26th, 2020 at 02:11:39 AM EST
[ Parent ]
Money is like water in that it can wear through the hardest of rocks. That is mostly the reason for this debacle. The Democrats abandoned the working class: 1), because they had so little money, 2), because those who did have a lot of money disdained the interests and needs of the working class and it became easier to get money from them if you didn't bring up issues about the less well off, and, 3) because the actual politicians and their associates much preferred to think of themselves as representatives of the middle class. They wanted to be part of 'The Elite'!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Oct 25th, 2020 at 05:12:00 PM EST
Plus, the education of most economists serves to inculcate ideas acceptable to the wealthy, because the wealthy are who economists are intended to serve.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Oct 25th, 2020 at 05:13:49 PM EST
[ Parent ]
Not only do Unions have to go global, to avoid being played off against each other, but governance has to go global, if it is a global economy you really want.

At the moment - contra Trump - globalisation has overwhelmingly favoured the USA, as the vast majority of global corporations are USA controlled. They manage to avoid global taatio almost complete, using various ta shelters and encouraging a race to the bottom in global taxation -thus severely disadvantaging their smaller national competitors, who already have the disadvantage of smaller scale and less ability to avail of tax shelters.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Oct 25th, 2020 at 05:36:23 PM EST
[ Parent ]
Sorry, this comment meant to be in response to ASDF above.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Oct 25th, 2020 at 05:42:32 PM EST
[ Parent ]
As evidence, just look at the horror the phrase "socialised medicine" evokes in the USA, when that is the norm almost everywhere else (and in the armed forces and vets admin in the USA).

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Oct 25th, 2020 at 05:41:38 PM EST
[ Parent ]
What Americans Know About Socialism

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sun Oct 25th, 2020 at 05:53:50 PM EST
[ Parent ]
A very thin book.
by rifek on Fri Nov 13th, 2020 at 09:42:37 PM EST
[ Parent ]
What I find most telling about Economics and the people working in Economics is the fact they instituted their very own fake Nobel Prize.  The accurate name "The Annual Economic Prize Awarded by the Sveriges Riksbank" doesn't have the same cachet.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sun Oct 25th, 2020 at 05:59:17 PM EST
The Sveriges Riksbank prize in Economics in honor of Alfred Nobel must be the ORIGINAL IgNobel Prize.


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 26th, 2020 at 01:49:54 AM EST
[ Parent ]
Reading The Folklore of Capitalism by Thurman Arnold now, a Yale law professor who published the book in 1938.  Extremely clear-eyed.  Even in the midst of the Depression, he focuses on the absurdity of the corporation as a person and I just finished the chapter where he explains how USA anti-monopoly laws backfired.

I wonder if Krugman ever read Arnold and realizes how far, far back the "zombie lies" go.  I will have a lot of notes from this book.

Solar IS Civil Defense

by gmoke on Wed Oct 28th, 2020 at 08:03:53 PM EST
by Oui on Wed Oct 28th, 2020 at 08:52:56 PM EST
[ Parent ]
by gmoke on Thu Oct 29th, 2020 at 09:01:25 PM EST
[ Parent ]
PDF The Folklore of Capitalism, 424 pp
HTML The Folklore of Capitalism

What?! No data visualization?!

by Cat on Wed Oct 28th, 2020 at 09:45:17 PM EST
[ Parent ]
 Marriner S. Eccles is another figure to check out. His memoirs, Beckoning Frontiers, is a bit pricy on Amazon but may be available at a library to which you have access.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 29th, 2020 at 02:58:45 AM EST
[ Parent ]
Feel free to post a book review here!

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Oct 29th, 2020 at 11:44:32 AM EST
[ Parent ]
Next best thing:
Marriner Stoddard Eccles (September 9, 1890 - December 18, 1977) was an American banker, economist, and member and chairman of the Federal Reserve Board.

Eccles was known during his lifetime chiefly as having been the Chairman of the Federal Reserve under President Franklin D. Roosevelt. He has been remembered for having anticipated and supporting the theories of John Maynard Keynes relative to "inadequate aggregate spending" in the economy which appeared during his tenure.[2] As Eccles wrote in his memoir Beckoning Frontiers (1951):

   As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth ... to provide men with buying power. ... Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. ... The other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

Wealth today is more concentrated than it was in 1929.


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 29th, 2020 at 01:58:11 PM EST
[ Parent ]
The differences between today and 1929 include the mass availability of credit cards, which provide some cushion for the average worker, a vastly higher total wealth and the existence of some degree of social safety net in the form of unemployment insurance . Thus, even with an equivalent mal-distribution of wealth, the bottom half can remain above total desolation for at least a few months. Their survival for a year or more now depends on extraordinary fiscal action by the federal government.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 29th, 2020 at 02:12:11 PM EST
[ Parent ]
I can't agree with any comparison in that remark.
by Cat on Thu Oct 29th, 2020 at 09:41:40 PM EST
[ Parent ]
If he wrote that now, the LDS authorities would call him on the carpet.
by rifek on Fri Nov 13th, 2020 at 09:49:36 PM EST
[ Parent ]
by Cat on Thu Oct 29th, 2020 at 04:40:27 PM EST
The not so invisible hand keeping the fairy of The Market afloat. A one girl Plunge Prevention Team!


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 29th, 2020 at 08:01:17 PM EST
[ Parent ]
I've been saying ever since The Blessed St. Ronnie Ray-gunz first said "Vote with your feet" that it was a recipe for disaster because capital can move ever so much easier than people.
by rifek on Fri Nov 13th, 2020 at 09:37:49 PM EST


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