illsofourownmaking

Amateur social science, poorly written polemic and misguided social commentary

Month: November, 2013

An Over-leveraged World

When this figure was presented before me by a Mark Blyth lecture on the sovereign debt crisis, I was reminded that the public sector is the only bastion of responsibility left in our increasingly privatized world. Without the guiding hand of democratic governance, the private sector has proven unable to govern itself responsibility: its debt loads are equivalent to multiple domestic economies. Although debt is necessary and is the foundation of our economic system, these levels are unsustainable. It’s time the public reigned in the private and ended the global, largely laissez faire paradigm of economics.

Defending Social Democracy

“To abandon the labors of a century is to betray those who came before us as well as generations yet to come. It would be pleasing – but misleading – to promise that social democracy, or something like it, represents the future that we would pain for ourselves in an ideal world. But this would be to return to discredited story-telling. Social democracy does not represent an ideal future; it does not even represent the ideal past. But among the options available to us today, it is better than anything else to hand.”  – Tony Judt, Ill Fares The Land

Tony Judt is right: social democracy wasn’t and isn’t ideal but rather a pragmatic compromise between capitalism and democracy. History has taught us that incremental reforms don’t accumulate to create Marx’s socialists utopia but it is possible to use capitalism as an instrument to achieve Marx’s desire values instead. While it flourished, social democracy delivered prosperity, security and equality to millions. While social democracy has declined, the fruits of its laborers remain in the form of generous welfare programs, high union density and universal access to health care + secondary education. With the proper articulation, it may be possible to remind the public of the triumphs of social democracy and transform the meta-narrative of liberal progress into a meta-narrative of egalitarian stability.

Being Greek and an Economist While Greece Burns: An intimate account – MGSA Keynote 2013

“We economists, independently of our intelligence or personal ethics, are no experts but that we belong to a sinister priesthood purveying thinly disguised, heavily mathematised superstition as… scientific economics.”

Yanis Varoufakis

(Gonda Van Steen introduced the audience to the MGSA 2013 Conference and Artemis Leontis introduced me. The talk begins at around 10′, when the audio becomes loud and clear)

The Modern Greek Studies Association (MGSA) kindly invited me to deliver its 2013 Keynote, at the MGSA biannual Conference held at Indiana University. I grabbed the opportunity to speak auto-biographically and to place the Greek and global crises in a broader context of the discursive battles raging within economics. You can listen to the talk below, click here for a pdf copy or read on for a web version of the text…

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“Class is defin…

“Class is defined by men as they live their own history, and, in the end, this is the only definition.” – E.P. Thompson

We should never allow the dogma of dead theorists to obfuscate the omnipresent and potent agency of the oppressed. All too often I find myself lamenting the powerlessness of many individuals in American society. This is because I view them as disaggregated data points rather than human beings with their own free will. Every day, both through mundane actions and bombastic statements, they resist the ingrained hierarchies they operate in. They wage battles through the radical musical expression of hip-hop and punk rock. They transform vile, disgusting slurs into terms of affection. They live colorful lives full of hope, optimism, love and sometimes when we attempt to quantify them in order to produce potent conjecture, we forget this. Henceforth, I will try to eschew this tendency and constantly remind myself that I am involved in the social sciences because I care about humans as ends rather than means to an abstract utopia. Rest in power, E.P. Thompson. Your insights certainly won’t be forgotten.

“Talking like a…

“Talking like a macroeconomics professor always leads to trouble.” – David Plouffe

I don’t mean to beat the horse killed by Paul Krugman but there is nothing more impolite than beginning a conversation using the vocabulary of an economist. Economics is called the dismal science for a reason. At its foundation is the assumption that mankind is inherently selfish and willing to do anything for individual interest given the right incentive structure. As the field has progressed, this assumption has become more nuanced: mankind is inherently selfish but is prone to the irrational desicion-making of a beast rather than the cool calculation of a utility maximizer. The endless list of econ 101 jargon used to describe commonplace human errors that fall outside of the rational actor model compels us to believe we were better off as hunter-gatherers where the consequences of our insatiable yet stupid greed could be properly contained. Yet for all of the jeers economics receives due to its microfoundational assumptions, it manages to be the titan of the social sciences because of its macroeconomic insights. Economics strength lies in its assertion that man’s vice may be systematized into virtue. This is the very essence of capitalism: a counter-intuitive notion. This is why the prescriptions of macroeconomic theory are so easily maligned: the objective of maximizing the collective good is apparently at odds with the market system. Thus macroeconomists are doomed to be ignored to the peril of society. Perhaps if economists were more normative and less positive, their policy prescriptions would be taken more seriously. The reality is that economists like markets because they’re efficient and maximize collective utility, not because of the inherent superiority of capitalism rooted in the morality of productive property ownership. Once economists actively discard the false notion that markets are the optimal mechanism for societal decision-making, their logic will be more easily diffused throughout society. Economists will then cease to be perceived as the useful idiots of the financial sector and gain respect as something greater than mere social scientists. With the right dose of openly normative viewpoints that advocate in favor of a just society defined by tolerance, equity and democratic deliberation, economists have the potential to be viewed as the benevolent architects of civilization rather than the theorem-wielding shills of hedge fund managers. Isn’t wish fulfillment a therapeutic exercise?

An Opening Salvo to a Fiscal Firebombing

Years of gridlock on Capital Hill, economic stagnation, and increasing amounts of public debt and lingering levels of high unemployment have all worked in conjunction to give the public the sense that America faces a crisis. Whether the public thinks this crisis is economic, fiscal or social is irrelevant, as the beltway has successfully framed America’s problems in fiscal terms. Publications on the left and right argue in favor of ideological solutions to eliminate America’s budget deficit and reduce our obligations to debtors: liberals argue for tax increases, conservatives argue in favor of entitlement reform. The paradigm of debate is shockingly misguided: while America’s rising levels of debt certainly poses a problem, the simplistic fiscal arithmetic proposed by ideologues poses a larger dilemma of a double-dip recession that actually increases our debt rather than a quick fix.  By learning from the experiences of European countries facing so-called “debt crises”, a route out of America’s current languid budgetary and fiscal state may be discovered. In doing so, America’s global standing will be dramatically strengthened and China’s ascendance may be stymied.

While the content of the three quotes at the beginning of our proposal appear to share little in common, they form the foundational basis for our policy prescriptions. As Erskine Bowles aptly stated, America global stance is imperiled by fierce competition. The blossoming economies of India, China, Brazil and many others threaten America’s superpower status and its virtual monopoly on technological innovation. The problem is that our nation is currently enslaved to the dead ideas of economists. Instead of introducing a massive fiscal stimulus, according to classic counter-cyclical Keynesian theory, to engender rapid recovery, our nation settled on a minimal fiscal stimulus that was later walked back by spending cuts and sequestration. At the moment, our nation has the ability to accrue mountains of debt: the interest rate for a 10-year bond is currently 1.59%1. While accumulated mountains of debt would be a long-term liability, it would be a present-day asset: dilapidated infrastructure could be repaired, struggling school districts would be able to hire desperately needed teachers, a green technological revolution could transform the global response to climate change and our economy could be put back on track. Ultimately, the economic recovery reaped by our nation’s increased debt load would allow us to pay it off in short order and with little cost: tax revenues would skyrocket without tax increases and discretionary expenditures would plummet as poverty and unemployment decreased. The mountain of fiscal obligations owed to bondholders would appear to be a molehill compared to our surging GDP. With the addition of necessary structural reforms to our economy, we could achieve both material prosperity and a balanced budget sheet. Contrary to the chorus of voices stating that fiscal responsibility requires sacrifice, we say that fiscal responsibility requires following instructions derived from tried and true economic theory.

Paul Ryan: King of the Dumbfucks or Facetious Randian?

As I was working on a research project on the federal government’s budgetary and macroeconomic policy, I discovered a conversation between Congressman Paul Ryan and OMB Director Jack Lew that shouldn’t go unnoticed: Paul Ryan questioned whether the Obama administration’s fiscal policy leaves tax rates for the middle class unchanged, Jack Lew responded that it’s clear that this is the case as marginal tax rates remain at levels set by the Bush administration. At this moment, economic wizard and policy wonk Paul Ryan knew he had lieberal Jack Lew in a headlock: wut about Obamacare!?!?!

I’m just trying to say, first of all, the Supreme Court says that the health insurance mandate is a tax that obviously hits everybody.The 2.3 percent tax on medical devices, that hits everybody, including people making less than $200,000. The cigarette tax, smokers do not just make about $250,000..The point I am trying to make is, you are already kind of reneging on this promise, and the biggest tax increase proposal you have in your budget does that as well. It taxes families below your definition of middle-income thresholds.

Paul Ryan clearly got ’em. Obama’s politburo is out to destroy the middle class by establishing secret fees against salt of the earth Americans who just want to smoke their cigarettes while being hooked up to advanced medical equipment.

My response to Paul Ryan: shut the fuck up, simpleton. Fees designed to incentivize behavior that promotes the public health are not taxes. You are either a moron who is unable to understand this or a sociopathic liar who wants to present a misleading narrative that protect the welfare of oppressed “job creators” aka hedge fund managers and wealthy businessowners. Frankly, I’m not sure what to believe at this point. My question for reading audience: is Paul Ryan a moron or a sociopathic Randian? The past three years of debate have left me puzzled.

“The ideas of e…

“The ideas of economists and political philosophers, both when they are
right and when they are wrong, are more powerful than is commonly
understood. Indeed the world is ruled by little else. Practical men, who
believe themselves to be quite exempt from any intellectual influences,
are usually the slaves of some defunct economist. Madmen in authority,
who hear voices in the air are distilling their frenzy from some academic
scribbler of a few years back.” – John Maynard Keynes

My hope is that this blog will not only elucidate the chief concerns of our time but also advance revolutionary ideas. This hope is delusional but so is the idea of an American President with black skin or a political union which contains France, Britain and Germany.

More practically, I’d like to use this blog to strengthen my academic writing skills and flex my cognitive muscles: keynesian dreams within an undergraduate reality.