Santa Growth is not coming to town…
By JM Hamilton (11-15-2020)
We can all rejoice that vaccines appear to be on the way. Vaccines that Western governments will, likely, overpay Big Pharma for, and will, probably, save countless lives. The plague is certainly nothing to celebrate, but we should pause a moment and tip our collective hat to COVID. Namely, for all the truths the disease has revealed, about the state of the American economy and the political process. Without COVID, the United States might have traveled on down the neoliberal path… never questioning, semi-comatose, somnolent, morbidly obese, sleepwalking, and narcotized on American exceptionalism, consumerism, & social media.
Without COVID, would Trump have won a second term?
As you chew on that, please note, the pandemic highlights and presents an opportunity to question the false narratives Americans are fed every day. Among the aforementioned revelations: tax cuts for the rich lead to economic stagnation and catastrophic national debt, just as exorbitant corporate debt crushes companies & industries; the trickledown myth (fiscal & monetary) is just that, a fable that nobody credible believes in anymore; and it doesn’t matter how many tens of thousands of Main Street businesses fail, if you pump enough taxpayer money into debt and stock markets, the markets will completely divorce themselves from reality.
But perhaps the greatest fiction to be laid out for burial, by COVID, is the story that the economic growth fairy - for today’s purposes, Santa Growth - will slide down the nation’s chimney and save the United States, laissez faire economics, and eradicate nearly $30 trillion in national debt.
The financial news media - and the fresh and saltwater schools of economics – are all in agreement, growth is the path forward, in: eliminating inequality, addressing stagnant wages, as a solution for economic malaise, and in addressing catastrophic national debt.
Even before the plague came along, the US had enjoyed economic growth in, nearly, every year, from Reagan forward. (Albeit, growth – from 2000 forward, arguably - was significantly mitigated by colossal national debt, endless austerity, budget draining wars w/out end, Wall Street bailouts, & rent seeking utilities that have come to dominate the US economy.) And yet, during the last forty years of economic growth, wages stagnated, the number of millionaires & billionaires soared, the national debt shot to the moon, and social mobility has been all but eliminated. Most detrimentally, the economy has become financialized… thanks largely, to Federal Reserve policy.
Moreover, the insistence upon growth - as an economic panacea for what ails America, indeed, The West - holds out false hope and doubles down on the failure that led us to a divided and impoverished nation. Relying on economic growth, to solve the nation’s ills, is little more than an avoidance strategy, relied upon by the privileged … essentially, kicking the can down the road. Lancing & removing growth dogma that infects America’s economy, academia, and C-suites is the key to moving beyond late-stage neoliberalism and adopting an economy that works for everyone.
For in the ultimate twist of economic fate, it is Wall Street’s & Corporate C-Suites’ myopic view of growth – quarter to quarter – that leads to greatly diminished aggregate growth for the nation. Specifically, what happens when an industry doesn’t see growth? Well, the elites would have us believe that’s cause for industry consolidation. And while M&A may take care of management and ownership concerns, in the short run… when this behavior is engaged in across the entire economy, the ultimate outcome is clearly antigrowth & anti-jobs. (Not unlike multinationals exporting jobs offshore, in favor of cheaper labor, and then dumping foreign manufactured goods on US soil… a single company can get away with it, but when everybody does it, aggregate demand and the economy takes a hit.).
To be clear, M&A, monopoly & monopsony, leads to layoffs, lost jobs, stagnating wages, a significant loss of innovation & opportunity (and diseconomies of scale) … in short, significantly less growth. Moreover, cartel & monopolies extract taxes or rents from the consumer, that a normally functioning mixed economy – or rational government - would never permit.
This too, crushes growth and opportunity.
The FED enables all this by suppressing interest rates, keeping investors desperate, and making money - for the connected & powerful - nearly free to borrow. All this feeds consolidation, M&A, and paradoxically, an anti-growth outcome (aka a doom loop). Hence, reinforcing the obvious… that those who sing loudest w/in the cult of growth – the business community, academics, & the neoliberal elites w/in government – are often the very same people, who destroy growth, opportunity, jobs and the economy. Meanwhile, the national debt soars, commercial debt soars, and entire segments of the economy – see American retail – are all but eliminated. Let’s hear it for GDP, one more time. No thanks.
Moreover, if possible, is unlimited growth even desirable?
Think about what the cult of growth requires: an ever-growing population, increasingly impoverished by failed neoliberal dogma & the lack of well-paying jobs; an overburdened planet, which – given plague, famine, disease, endless war, and climate change – appears to have reached its limits with humanity; and finally, a captured & subservient US government, perfectly willing to sacrifice half the population, in favor of a handful of oligarchs. In short, unrestrained growth is not only unachievable, but it is also undesirable.
So you better not pout, you better not cry… Santa Growth is not coming to town, to save us from our failure to ask hard questions, like why has neoliberalism – and the cult of growth - been such a catastrophic failure for nearly half of all Americans?
That alone, should cause Americans to withdraw the cookies, milk, and kick our Santa Growth habit, once and for all.
Copyright JM Hamilton Publishing 2020
No comments:
Post a Comment