New Issue!

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Our January/February issue is finally out–sent to e-subscribers a couple of days ago, and in the mail to print subscribers.  We most recently posted David Bacon’s contribution to the issue, What Trump Can and Can’t Do to Immigrants, especially timely given Trump’s recent executive orders.

Here is the issue’s editorial note:

Arise!

If you’ve just awakened from a Rip Van Winkle-like sleep, you should probably stay lying down for a little while. You’re in for a shock.

A presidential candidate who slandered Mexican immigrants as criminals and rapists, claimed a Mexican-American judge was inherently biased against him, called for a ban on Muslims coming to the United States, called for compulsory registration of Muslims in the country, boasted of sexually assaulting women, insinuated that gun advocates might assassinate his opponent, and pledged to abide by the election result “if I win” … was elected president.

Here’s another shocker. Who among us expected to hear the Republican nominee for president—just four years after the party’s nominee was private-equity mogul Mitt Romney—say the following, as Donald Trump did in a October 2016 speech? “The establishment has trillions of dollars at stake in this election. For those who control the levers of power in Washington and for the global special interests. They partner with these people who don’t have your good in mind. … It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.”

The leading figures in the mainstream of the Democratic Party certainly did not expect an adversary raging against corporate globalization (even with the anti-Semitic dog whistles audible in Trump’s denunciations of the “global elite”). For decades, leading Democrats had bought into the neoliberal economic agenda, steering away from policies that could get them branded as “anti-business.” They derided criticism from the left as juvenile and quixotic, not dreaming that they would be outflanked on the right by a populism like Trump’s.

The analysis by liberal and progressive commentators since the election has focused largely on why Trump won and what it says about the country. We have to remember, however, that election results are not revelations of the national soul—especially not under the United States’ non-majoritarian presidential election system. The overt racism, nativism, and misogyny of Trump, his allies, and supporters are important facts about the United States today, but they are not the singular truth about the country or its people.

Yet there is nothing to be gained by minimizing what Trump has conjured. He tapped into widespread sentiments of grievance in a manner typical of right-wing populists: simultaneously directing his supporters’ ire at (some of) the wealthy and powerful and (some of) the poor and marginalized—blaming both, jointly, for the ruin of the country. The people Trump speaks to and claims to speak for are overwhelmingly white, predominantly male, and the grievances to which he gives voice are not simply those of workers and poor people in general. They are, rather, the particular grievances of those who recoil at gradually sinking into a mass they see as beneath them.

The articles in this issue attempt to dig deeply into both what has gotten us to this point, and what are possible ways forward.

Our cover article for the issue, by political scientist Sasha Breger Bush, argues that what we’re seeing is not the end of neoliberalism, but rather its transformation, from globalized neoliberalism into “national neoliberalism,” and its culmination: a corporate capture of government now more complete than ever.

Steve Pressman and Gerald Friedman both add depth to our understanding of Trump and what he represents. Pressman explains Trump in light of the squeeze on “middle class” incomes and the rise of economic inequality. Friedman adds to his previous analysis of American nativism (the November/December 2016 cover story) an “Economy in Numbers” on U.S. immigration in the current era.

David Bacon and Frank Ackerman, meanwhile, turn from retrospect to prospect. What does the coming period hold in store? Bacon focuses on immigration policy, noting the constraints under which a Trump administration will operate. Even in an era of increased border enforcement and deportations nationwide, Bacon argues, immigration policy will continue to be driven by employers’ need for a cheap and controllable labor force.

Meanwhile, Ackerman looks at the prospect for meaningful climate action, even with the Denier-in-Chief in the White House. He argues for a consortium of U.S. state and local governments—a “Green-State America”—committing to meet the emissions-reduction goals set down in the Paris climate agreement. “And this could be a model for other issues,” he concludes. “Green-State America might also want to support international treaties on the rights of women, the treatment of migrants, the rights of indigenous peoples, and more.”

To be sure, there will be many struggles ahead. Time to arise.

Krugman’s Failure to Speak Truth to Power about Austerity

By William K. Black

Cross-posted at New Economic Perspectives

In the first column in this series I explained how Hillary Clinton, during the closing 40 days of her campaign, showcased repeatedly her promise to assault the working class with continuous austerity.  I explained that her threat represented economic malpractice – and was insane politics.  I showed that the assault on the working class via austerity was such a core belief of the New Democrats that their candidate highlighted that assault even as the polls showed massive, intense rejection of her candidacy by the white working class.  I also noted that in this second series in the column I would discuss the failure of her campaign team, and her de facto surrogate, Paul Krugman to speak truth to power about the dual idiocy of her campaign promise to wage continuous war on the working class through austerity forever.

The broader point is the one made so often and so well by Tom Frank – it is morally wrong, economically illiterate, and politically suicidal for the New Democrats to continue to assault the working class via austerity, “free trade” (sic) deals, and financial deregulation.  The only thing worse is to then insult the working class for reacting “badly” to being pummeled for decades by the Party that once defined itself as the party of working people.  The New Democrats decided to insult the white working class in response to polls showing that the white working class was enraged at Hillary Clinton.  Arrogance and self-blindness are boon companions.

I grew up in the Detroit-area and saw George Wallace win the Democratic Party primary for the presidential nomination, so none of this is new to me.  We all know that the New Democrats are never going to listen to my warnings or Tom Frank’s warnings.  But the leaks show that Hillary had many competent staff who raised difficult questions.  Why wasn’t any senior campaign staffer willing to tell her that her austerity threats were economically illiterate and politically suicidal?  Krugman warned President Obama several times that austerity was a terrible economic policy.

John Boehner, March 2009:

It’s time for government to tighten their belts and show the American people that we ‘get’ it

Barack Obama, yesterday:

“At a time when so many families are tightening their belts, he’s going to make sure that the government continues to tighten its own,” Obama said. “

We’ll never know how differently the politics would have played if Obama, instead of systematically echoing and giving credibility to all the arguments of the people who want to destroy him, had actually stood up for a different economic philosophy. But we do know how his actual strategy has worked, and it hasn’t been a success

Why did he cease speaking truth to power as the election came down to the wire?

The New Democrats Were Locked Into Austerity

Ever since the birth of the New Democrats, their adherents have embraced austerity.  This act of mutual economic and political self-destruction has become so core to their identity that Hillary unhesitatingly made it one her most important closing pitches during the last 40 days of her campaign against Trump.  At the very moment when her pollsters were warning her that she could lose due to working class hostility, she chose to showcase her hostility to the working class by promising to inflict eight more years of austerity on them.  In your face working class!  This is a political strategy that has no upside, but a toxic downside.  Despite intense criticism from progressives of her austerity threats, Paul Krugman never urged her publicly to promise to end austerity’s assault on the working class.  Similarly, no one on her official campaign team had the courage and strength to tell her to stop and reverse her position.

Part of Krugman’s problem was that while he has come some distance from his long-held support for austerity, his reflexes are still wrong because he does not understand sovereign money.  A November 14, 2016 Krugman column revealed the hold his past dogmas still had on him.

Eight years ago, as the world was plunging into financial crisis, I argued that we’d entered an economic realm in which “virtue is vice, caution is risky, and prudence is folly.” Specifically, we’d stumbled into a situation in which bigger deficits and higher inflation were good things, not bad. And we’re still in that situation — not as strongly as we were, but we could still very much use more deficit spending.

Many economists have known this all along. But they have been ignored, partly because much of the political establishment has been obsessed with the evils of debt, partly because Republicans have been against anything the Obama administration proposes.

Krugman still does not understand sovereign money.  A budget deficit for a government with a sovereign currency is not a moral issue.  Budget surpluses are not a “virtue” and deficits are not a “vice.”  The economic issue is strictly pragmatic – what size budget deficit or surplus is best for the overall economy?  The political issue is the one Krugman made in his criticism of President Obama’s embrace of the self-inflicted wound of adopting your opponents’ economic illiteracy.

But notice that even though he was writing after the 2016 elections, Krugman could not bring himself to be candid about the identity of “much of the political establishment.”  Yes, Republicans always said they favored austerity (except when they held the presidency and had to deal with a recession).  But New Democrats believed in the same terrible economics and, unlike the Republicans, Hillary’s embrace of continuous austerity as a means of waging a unceasing onslaught on the working class was so passionate that she highlighted that embrace during the last 40 days of her disastrous campaign even as ever poll and pundit warned her that she was enraging the white working class.  Krugman cannot identify Hillary and the New Democrats as the most prominent leader of “the political establishment [that] has been obsessed with the evil of debt” without raising the obvious question – why didn’t he speak truth to power?  Why didn’t he advise her to end her obsession with sovereign debt and her economic policies that made war on the working class?

Of course, Krugman did something worse than simply fail to speak truth to power.  He joined in the reprehensible effort to trash the reputation of a well-respected economics scholar, Professor Gerald Friedman.  Friedman had donated to Hillary’s campaign, who dared to point out that Bernie Sanders’ economic stimulus proposals were far superior to her proposals.  On what basis did Krugman seek to destroy the scholar?  Krugman complaint was that the economist was insufficiently “obsessed with the evils of debt.”  Friedman’s study made a point that Krugman had long made (and I quoted above).  The 2009 fiscal stimulus was far too small and that the federal government had made a dire mistake in moving toward austerity in 2010 rather than increasing substantially the size of the stimulus package.

What was really going on, of course, is that Krugman was out to defeat Bernie’s candidacy for the nomination.  Had Bernie won that nomination he would now be President-elect.  Sanders was the one candidate for the nomination that embodied what Krugman said the Democratic Party desperately needed – ending the hold of “the political establishment obsessed with the evils of debt.”  Krugman simply viewed truth and Friedman as collateral damage in his zealous fight to defeat Bernie.  Krugman has been unable yet to summon the integrity and courage to admit how badly he served the Nation and the millions of Americans that rejected that “political establishment.”  I hope he will reach out to Friedman and begin to offer his apologies.