New Issue!

0715cover--for-blogOur July/August issue is out!  We have posted two articles:  our cover feature, an interview with Gerald Epstein of UMass-Amherst:  From Boring Banking to Roaring Banking; and John Miller’s “Up Against the Wall Street Journal” column, Trans-Pacific Partnership: Corporate Power Unbound.

Here is the issue’s p. 2 editorial note:

Are You Pulling My Leg?

Hearing some of the justifications offered for dominant economic policies and institutions today, readers of Dollars & Sense may wonder, “Do they really believe this? They must pulling my leg!”

Harvard economics professor Gregory Mankiw, writing in a recent New York Times “Economic View” article, for example, declares the case for “free trade” a “no brainer” among economists. Mankiw engages in the usual sleight of hand: slipping seamlessly from the benefits of international trade, to the desirability of “free trade” policies (deregulating international trade), to support for contemporary “free trade” agreements (which are primarily focused on deregulating international investment and finance, not trade in goods). We might agree that this is a “no brainer,” but not in the sense Mankiw means. The argument is convincing as long as you don’t actually think about it.

In this issue of Dollars & Sense, we have several examples of similar justifications.

Economists Anita Dancs and Helen Scharber take a look at the criticisms of the “local food” movement coming from mainstream economists. Here, the economists’ main case for a “10,000 mile diet” (as one recent book put it) is actually quite similar to the one for “free trade”—based on what Dancs and Scharber call the “CASTE paradigm.” Comparative Advantage, economies of Scale, and Trade, the mainstream economists claim, lead to greater Efficiency. While Dancs and Scharber don’t think that “locavores” have got it quite right, they emphasize that the existing food system is hardly the result of markets untouched by government intervention (subsidized water, anyone?) and that, in any case, unfettered markets would not lead to socially efficient or equitable results.

Gerald Epstein takes us into the world of high finance, and the transition from regulated “boring” banking (from the New Deal to the Reagan Revolution) to the terrifying “roaring” banking of the post-deregulation era. Again, economists claimed that financial deregulation and innovation (like new-fangled securities) were going to deliver vast benefits—fueling new productive investment, making it easier for people to save for retirement, helping families and businesses manage risk, and so on. (More than a few of the economists who made such arguments had undisclosed ties to the big financial firms themselves.) How did that work out for us?

In the “Economy in Numbers,” Raul Zelada Aprili and Gerald Friedman look at the consequences of so-called “Washington Consensus” economic policies (or “neoliberalism”) in Latin America. Mainstream economists and the politicians they advised took advantage of the Latin American debt crisis of the 1980s to discredit the government “import substitution industrialization” policies of the 1950s-1970s—and to push for a profound “free market” restructuring of the region’s economies. In fact, economic growth was significantly faster during the import substitution era than during the heyday of neoliberalism—and has accelerated in the last decade, as governments across the region have turned away from neoliberal policies.

The thing that we need to keep in mind is that, though “neoliberalism” may sound like a belief system—the word does end in “ism,” after all—it is really more than that. It describes a set of economic policies or institutions. The ideology of neoliberalism, the unflinching belief in “free markets” everywhere and for everything, lays atop the interests of global capital. Claims that financial deregulation would benefit us all—and the imperviousness of finance to significant reform in the wake of a disastrous crisis—reflect the political power of what Epstein calls the “bankers’ club.” The CASTE paradigm, likewise, is not just a set of fallacious arguments, but a defense of the existing distribution of power in the food system and in society more generally.

That’s what we need to realize. They’re not really pulling our leg. More like twisting our arm.

Also: Rob Larson explains how “Money Yells.” Part 1, in this issue, focuses on the political economy of the internet, and recent battles over “net neutrality.” Kristian Williams explores the race and class underpinnings of policing. And Steven Pressman reviews a defense of Social Security, just as we’re about to celebrate the program’s 80th anniversary.


Report from Greece; Links on Greece

Links to good pieces on tomorrow’s Yes/No referendum in Greece:

A report about tomorrow’s referendum from our author Mike-Frank Epitropoulos (see his Greece as a Demonstration Project and A Second Demonstration Project for Greece), who is now in Greece:

On the Front Lines of Class Warfare

By Mike-Frank Epitropoulos

I am writing from the epicenter of the global class war which aims to trounce sovereignty, democracy, and all vestiges of the social state and social justice.  These are truly historic times in Greece and the world as we are living the exercise of open political economic battle that is leaving much collateral damage.

Since Greek Prime Minister, Alexis Tsipras, and his Syriza party called for a referendum on whether or not to accept further debilitating austerity and increasing, rather than decreasing debt, I have been witness to a “shock and awe” barrage of propaganda from private Greek media outlets (the worst enemies of Greece in my opinion), the opposition parties (especially those from the governments who escorted Greece to this point), and the  Troika — global capital and its neoliberal project.

The fear-mongering, confusion, and terror that has been unleashed on the Greek public and the world is overwhelming to live through.  The ‘YES’ / ‘NO’ referendum on whether or not to accept the Troika’s punitive offer that flatly rejects and disregards the platform upon which Syriza was elected in January has been reframed multiple times — by EU and European Central Bank (ECB) officials, opposition parties, private media demagogues and others.

Add to this the capital controls that were put into place as the ECB cut off cash flows to Greece — another blow from the outside — and we have a situation where multiple interpretations of a YES/NO referendum have led to a tired, confused, but yet resilient population.

It is clear that global capital, and especially European capital did (and does) not want another ‘demonstration effect’ of popular democratic will — the referendum — to take place; and if it is to take place they want Greeks to sign off on an even more savage set of austerity terms — they’ve said it openly!  The IMF has once again taken the position that Greek debt is unsustainable and the program will not work to free Greece from debt peonage.

And yet… the mantra that echoes through the mainstream, private media and the halls of Brussels and the opposition parties of Greece is this:  There Is No Alternative!  (TINA!)

This summer, here, on the island of Karpathos, long known as one of the areas of Greece with the highest repatriation of capital from its diaspora abroad, the class interests are reflected as well, with the wealthier and vested interests speaking in doomsday terms about resisting the Troika and the younger and poorer taking on a more defiant tone since they have less (or nothing) to lose.  What is clear to both camps is that there is no easy way out.

For the first time, I have also heard wealthier, and business people, use the term, “American communists” in referencing President Obama, Paul Krugman, Joseph Stiglitz, Greek diaspora from the US, and anyone from Keynesian persuasion or leftward who dares to be critical of the Euro and its project!  These people are not only apologists for the hardline neoliberal free-marketeers, but they also reject the importance of sovereignty, democracy, autonomy and self-determination.  They claim that those of us who speak of these ideals are out of touch, and that all that matters is cash.  (More than a few have asked me if I’ve heard about the end of history!)

Yet, sovereignty and power is what this demonstration project is all about.  It’s totally a political battle, and that is why I do not have faith in the European Union.

European Parliament president, Martin Schulz, said that his faith in the Greek government had hit “rock bottom” and went on to openly suggest that a technocratic government be appointed to bridge the time between Syriza resigns and new elections could be held to a new Memorandum of austerity and loans done.  This is further proof that the main goals are to prevent democratically-elected governments that do not adhere to free-market orthodoxy from taking power and now — with the referendum — to scar the notion of a tool of democracies — the referendum.  There is clear indication that they don’t want the voice of the people — anywhere — to be heard.

One high school teacher / activist said he gives Angela Merkel credit for saying she and the German government would not negotiate until after the referendum this Sunday (July 5th, 2015), interpreting her decision as some level of respect for the referendum process in Greece.  He also stressed that Greeks of all political persuasions in this referendum have been civil “opponents”, but not “enemies” — and this further highlights the premium on democracy and hearing the will of the people.

From inside Syriza, momentum and optimism characterize the climate.   They are encouraged and emboldened the more people actually debate the issues and become problematized.  This problematization is what has been lacking with previous governments and hard core capitalists.

It’s time for all freedom-loving people to support the Greek people in this class-based battle.  This is ultimately NOT simply a Greek crisis, but a global capitalist crisis and it’s not over yet!