Our May/June issue is out!

Our May/June issue is out!  Print subscribers should get their copies soon, and electronic subscribers just received their full-color pdfs. And we have posted the cover feature, an interview with economist Jayati Ghosh, The ‘Emerging’ Economies Today.  And here is this issue’s editorial note:

The Age of Misdirection

Name a problem, and someone in a position of power or privilege will have a diversionary explanation for it. One that is consistent with—or even redoubles—their power or privilege.

John Miller takes on one of these diversionary tactics in this issue’s “Up Against The Wall Street Journal.” Economist Lawrence Lindsey, erstwhile economic advisor to George W. Bush, says “progressives” are to blame for rising inequality in the United States. In fact, inequality of market incomes has risen under both Democratic and Republican administrations—thanks to the erosion of unions, weakening of the welfare state, adoption of pro-corporate “free trade” agreements, and the like. Redistributive tax and spending policy do some, but not enough, to reduce inequality.

Nor have government policymakers done what they could to spur economic recovery or restore full employment in the wake of the Great Recession. Gerald Friedman notes—in an ongoing debate with critics of his writings on Bernie Sanders’ economic program—that mainstream economists are telling us to just accept today’s stagnant economy as the new normal. That’s all well and good for large corporations and the very wealthy. The once-again-rising tide has lifted their boats. Not so for the majority, who are struggling to keep their heads above water.

We see more sleight-of-hand politics when it comes to taxes. To dodge taxes, U.S. corporations stash trillions in profits in fictitious overseas accounts. That’s still not enough for some of them, Roger Bybee points out, so they engage in “inversions”— their legal takeover by companies headquartered in lower-tax countries. Confronted with this spectacle, government and corporate leaders say: We need to cut “punishing” corporate taxes! We need a “tax holiday” for corporations to repatriate profits “trapped” abroad! The mainstream press has responded to the “Panama Papers” scandal—which revealed details about tens of thousands of offshore bank accounts, likely used to dodge taxes—in much the same vein. The Wall Street Journal, Bill Black points out in his “Comment,” argues that the rampant concealment of private wealth is nothing more than a “distraction” (and that we should focus instead on government corruption).

Privilege may be concentrated at the very top (in the United States today, increasingly so). But, as Jeannette Wicks-Lim argues in “It Pays to Be White,” the story is much more complex than just “the 1%” against everyone else. In particular, the U.S. racial caste system stacks the deck, in a multitude of ways, in favor of whites and against African Americans. The attachment to white privilege is deeply ingrained, buttressed by the belief that “White people tend to get more because they deserve more, while Black people get less because they deserve less.” That creates a deep divide within the ranks of the “99%.” And it gives today’s racist demagogues, in the ultimate misdirection, scapegoats on whom to blame society’s ills.

One way to read all this, with some justification, is that the powerful and privileged will stop at nothing to hold on to their positions. Another, however, is that they are desperately improvising as their hold on society becomes more tenuous. Elites try to shift the blame for income inequality, economic stagnation, corporate tax dodging, and so on because they understand that more and more people see these as blameworthy. It’s not just in the United States where those in power are facing challenges to their authority and legitimacy. Jayati Ghosh points out that three sectors of the capitalist world—rich “core” capitalist countries, “emerging” economies that export manufactured goods to the core, and suppliers of raw-material and intermediate inputs for emerging-economy manufacturing—are tied together by trade and finance. Stagnation in the core has undermined export-oriented manufacturing and, with it, the raw-material commodities boom. The elites in these countries will have to move towards more inclusive, demand-driven growth, or face rising protest.

Here in the United States, we may not see mass protests right now, but we do see profound mass disillusionment with private and government elites. Even when those in power have steered society into a crisis, the existing order is likely to persist so long as people believe that those who created the mess will … somehow, some way … be able to fix it. When that belief no longer holds, change can occur quite dramatically.

But change in what direction? That is not preordained.

Friday Links

Quick links–some new, some long overdue:

(1) On the so-called “CRomnibus” and the provision that would “add numerous additional exemptions to the section’s ban on Federal government bailouts of large derivatives dealers”:

(2) On the Bad Grand Jury Decisions:

Speaking of “offending” the cops, here’s The New York Times‘ fail on this topic: New Twist in Lynch’s Confirmation After New York Grand Jury Decision, about how the confirmation hearings for nominee to replace Eric Holder will supposedly be complicated by the fact that she’s heading up the civil rights investigation of Eric Garner’s choking death. The Times tells us: “One Democratic official, who spoke on the condition of anonymity because he is involved in advancing the nomination, said Ms. Lynch would have to carefully navigate community demands for action, in New York and Missouri, and the sensibilities of the law enforcement officers she would represent if confirmed to lead the Justice Department.” Come again? I guess maybe there’s some sense in which the Attorney General, the chief law enforcement official of the United States, “represents” law enforcement officers (though it makes more sense to think of her as their (future) boss); in the context of allegations of illegal police conduct (murder), this is a pretty outrageous framing. (I’ll pass over the usual outrage of the Times‘ use of anonymous sources (usually leakers trying to use the Times reporter to shape the story).

(3) Antonio Weiss nomination: 

The Yves Smith piece, and various recent Bill Black pieces criticizing Dealbook and Andrew Ross Sorkin’s shameless coziness with his Wall Street funders and sources inspired me to check in to see whether the Times‘ Public Editor has had anything critical to say about Sorkin. I found that the current Public Editor, Margaret Sullivan, seems to be easy on Sorkin (she brought up criticisms people have had of his coziness with sources here, but instead of actually investigating and assessing the charges, she just gets a quote from Sorkin: “The criticism of him as an insider is, Mr. Sorkin says, ‘an old meme,’ and simply untrue.” Her predecessor, Arthur Brisbane, seems to have been harder on Sorkin, e.g., here.

Ok, that’s it for now.

–Chris Sturr