Economaton

The Economist’s weekly repartee arrived with an article on “Obamanomics” entitled “ Hope and fear: Democratic economic policy sounds worryingly populist“. It’s unfortunate (though not exactly surprising, given the source) that policies construed as “populist” — that is, for the benefit of the populace at large, as opposed to in the interests of the elite — are condemned on that account.

The majority of The Economist’s well-heeled readership lives in a bubble world of trust funds and investment banks, prestigious degrees from ancient universities and well-paying jobs arranged by Daddy’s friends. They, and the similarly fortunate friends and relatives they surround themselves with socially, evidently have little concept of what it’s like to live from paycheck to paycheck without any safety net, to live in constant fear that one’s very livelihood will one day be outsourced overseas or obsoleted by technology. Though this grim reality applies to the bulk of the country’s population, it is but a foggy and distant concept in their minds and worldviews, vaguely liked with dirty words like “liberalism” and its even more depraved cousin, “populism”; contemptible doctrines that despise the hard work and self-reliance that they credit for their own positions in favor of a welfare nanny state that coddles work-shirkers — nevermind that the vast majority of those so fortunate to live in the upper echelons are not there by virtue of either hard work or self-reliance in any sense other than their own imaginations and politics.

Most troubling, though again not particularly surprising, is that The Economist doesn’t even bother to explain why one ought to consider bad such populist proposals as Obama and Clinton’s plans to renegotiate NAFTA and rein in the power of malicious megacorporations via government regulation. In the tradition of evil propaganda luminaries Joseph Goebbels and his spiritual protege Karl Rove, the article simply assumes as a given that these are all horribly misconceived proposals, without comment, and then launches into an analysis of whether Obama or Clinton is worse.

The fundamental question: whose interests ought the government serve? In the United States, we live in a democracy “of the people, by the people”; the founders of this country had grown sick of a government structure designed to serve the interests of faraway social elites. They overthrew it, and deliberately designed our new government to be accountable to the people, and to serve the interests of the people. Self-serving condemnation of populism is contrary to these very principles, upon which the United States was founded. Populism is and ought to be at the core of American values. It is only very recently that a certain segment of the monied elite (a minority, I hope), led by neoconservativism and catalyzed by Buckley, have developed the self-awareness and audacity to openly promote a self-serving agenda of greed that deliberately leaves most people in the cold.

I am not against wealth per se, nor inheriting it; I am against deliberately designing social policy solely to advance the position of those fortunate enough to have it still further at the expense of the rest of us.

The Economist says that Barack Obama is “pretty darned depressing”; that “the front-runner’s speeches have begun to paint a world in which laid-off parents compete with their children for minimum-wage jobs while corporate fat-cats mis-sell dodgy mortgages and ship jobs off to Mexico.” Unfortunately, though not all rainbows and sunshine, this characterization of the United States today is pretty spot-on accurate. Taking another page from the Goering/Rove playbook, The Economist simply neglects to mention that this summation is, in fact, true. This is the world that I observe around me. The position of the middle class has never been more precarious. My generation is the first that can expect to have a worse standard of living than our parents. This is the way it is, and it would be refreshing to have a President who will finally acknowledge this and do something about it.

This course is not inevitable, and it’s not too late to change it, but that won’t happen if we have more Republicans and “centrist” DLC Democrats in charge, and with them expanded “free trade” agreements that outsource our economy for the further benefit of the monied elite while the rest of us fight over the same minimum wage job at Wal-Mart. I don’t believe that the Republicans and centrist Democrats are deliberately setting out to economically marginalize the bulk of the population. They are generally well educated, well positioned socially, and by virtue of their social position, largely isolated from any firsthand reports of the conditions the bulk of the country experiences. They’re not evil, not most of them; they just drink their own Kool-Aid. They genuinely believe that, despite some short term shocks from outsourcing, free trade is good because the United States will become a sort of nerve center for the global economy, a nation of accountants and lawyers oiling the wheels of the global economy. But it isn’t working out that way.

Not everyone is capable of being an accountant or a lawyer or a stockbroker; not everyone wants to be, and these people are on the whole not realigning into nice middle class jobs, but moving into the service sector. Thus, consumer spending now accounts for over 70% of our GDP. This is astonishing — and horrifying. Less than 50 years ago, the US was the world leader in industrial output, real production, and just about everything else. Now, a few of us are benefitting immensely from globalization while the rest of us live by cutting each other’s hair, and on credit that we won’t be able to pay back as more and more economic output is drained out of the country and sent overseas to places without pesky labor and environmental standards to drive manufacturing costs up.

The one sentence devoted to actual rebuttal of Obama’s position: “What is missing from Mr Obama’s speeches is any hint that this is not the whole story: that globalisation brings down prices and increases consumer choice; that unemployment is low by historical standards; that American companies are still the world’s most dynamic and creative; and that Americans still, on the whole, live lives of astonishing affluence.”

Prices are indeed brought down by globalization, but so is decent middle class employment. The lower prices themselves are achieved by exporting production jobs to places where work conditions are so horribly atrocious that the managers would be thrown in jail if they attempted to run such an operation in the United States. Unemployment is indeed low by historical standards, but it’s rising as a result of job outsourcing. Moreover, the quality of employment available to the average American has fallen quite significantly. 30 or 40 years ago, when the United States still had a significant industrial base and things were still manufactured here, the average person with no special skills could get a good middle class job in a factory or as a laborer. They could buy a house, own a car, and go on vacation with the money they made. Now, such people are scrambling just to survive and living on credit cards. Not everyone can be a doctor or a lawyer.

The “dynamism and creativity” of American companies is a rather vague concept that is impossible to measure, much less compare with other countries; these words were probably selected out of a thesaurus for their positive connotations, to provide contrast with the grim shades of grey that the author openly wishes to associate with the Democrats. In any case, the huge, growing net capital outflow from the United States will increasingly and severely constrain any such advantage that American companies may have over foreign ones, particularly Chinese and eastern European companies.

Finally, Americans do indeed live lives of astonishing affluence relative to most places — but this is precisely what is in danger. This is exactly what is threatened by these ill thought out globalization policies; this is exactly what has already been significantly harmed by globalization.

The Economist condemns the Democrats’ presumed “economic miserabilism”: “How can he not be all smiles and sunshine! My Euro-denominated bonds are holding up nicely, and my emerging market ETFs are doing fine.” Not everyone is fortunate enough to be as well positioned as most of The Economist’s readers (and all of its writers and editors) are. Fortunately, it’s not too late to save the American middle class. It’s not too late to save America’s premiere position in the world. And, as evinced by his bold refusal to take the easy, feel-good path of certain other politicians and merely spout absurd head-in-the-sand Pollyanna platitudes about how the USA is doing just great and everything will be fine if we just stay the course; by his very willingness to confront the unpleasant realities of the economic situation head-on and address them now with real solutions, and yes, to embrace populism, Barack Obama is the man to do it.