If we dont control our economy, someone else will. (me ranting)

[K-W]

Im so utterly sick of hearing about the economy as if it was some magical fairy that floats above us. It is a completely artificial man made system. It exists to serve us, yet somehow we have managed to reach a point where many americans feel it is our job to serve it.

Economies should exist for one reason and one reason only, to provide a system by which labor and resources can be utilized to provide for the people of the society. Economies should never be judged to be good or bad by any other standpoint. The stockmarket does not tell us if the economy is good, no economic measures do. The economy is not some seperate entity from our society. An economy is good when the individuals in the society are provided for. That is the only possible measure of whether an economy is good.

But of course that isnt profitable. That doesnt feed the unending greed of corporations and the rich who get addicted to watching numbers go up with no regard to what those numbers actually mean. It also doesnt feed the 'American Dream' where we all play the economic lottery and even though there are more losers than winners we keep playing the game because that big prize is always in our minds. We could be rich, we could be famous, we could be like those people on TV. These are addictions, addiction is a situations where the behavioral investment is more than is justified by the reward. That is why addictions are bad, you put way too much in, and dont get nearly enough in return. In our current economy we have created one massive casino, some people are playing the slots, some are playing high stakes poker, but everyone is losing value. There are the few that win, we hear about them, we love them, we want to be them, but most of us lose. And there are, of course the casino owners. The people who own the resources, property, and processes.

We have been convinced that the economy is something magical. We look upon economists as if the trade isnt as much fortune telling as it is anything resembling science. We stare at numbers, thier elegance intrigues us and lulls into a false sense that what we are seeing is something magical. We have been convinced that the economy is something that we can only hope to exercise a very little amount of control over.

This is all one big honking lie. The economy is not magical. It is complicated, but not magical. It doesnt have to be this way. If the economy doesnt produce enough food, change it, take some food and give it to the people who need it. If the economy isnt harnessing people and thier labor, change it, put those people to work doing something that is needed. If the economy isnt getting people health care, change it, get doctors in the same room as patients. If the economy isnt getting something built that needs to be built, change it.

I have been reading about the economic factors in WW1 and WW2, particularly the shady dealings with US corporations. The point is, the economy is an artificial system. It can be controlled, and there are plenty of people who fully understand that. At the best these people are industrialists who feed thier greed, but keep a liberal enough system to keep most people lightly satisified with the system. At the worst these people are reckless industrialists who grab power and weild it selfishly and stupidly, or these people are foriengers who weild the power to the detriment of our nation. Germany did it once, now I watch as the Saudi Arabians do the very same thing.

How long can we continue to accept that we can have a democracit society where we allow the economy to be controlled by a small minority of people. There is a reason governments controlled by a small minority of people dont work, and that is the very same reason that such economies do not work. Will our limited democracy last long enough for people to realize this? Or will these people use the immense economic power we allow them to have to destroy it?

I have a deep respect for our constitution and its ideals. It was an amazing point in history when people started to look at society and realize that societal organizations are not natural, they are artificial and we must design them to serve us, not serve them. That a government should exist by and for the people. That we are all individuals with an equal right to live, to be free, and the one we have all but abandoned, to persue happiness. When will we similarly realize that economies are not natural, they artificial and should exist to serve the people. They should be of and for the people and they should be designed with ideal that all people have the rights to equal opportunities.

I know I am much more likely to see facism in my lifetime than anything resembling economic democracy, but sometimes I need to ramble and vent, thanks to anyone who indulges me.

[loudsue]

1. One of the most important "rants" I've ever read on DU

K-W...that was awesome. You've hit on something that is very basic here, and I totally agree. I wish this post could stay "up there" for a week or so, so that more people could read it.

I'm bookmarking it to read it and kick it again tomorrow. My thoughts/feelings exactly!!

:kick::kick::kick:

[undergroundpanther]

2. Wonderful RAnt!!!!!

Needs to be put out everywhere!

[mhr]

3. Your Rant Stated Succinctly

Do We Want A Society That Supports An Economy

Or An Economy That Supports A Society?

[Veggie Meathead]

4. In the short space of your rant you have made more sense than

many so called economists.Unless the economy,like the political system behind it,is made to serve the people, it will never ever be
good or bad;it will simply be totalitarian.

In the casino economy that you correctly call it,each one of us is motivated by our own greed to hit the jackpot so we too can be like the ones before us who has hit the jackpot.The steady slogging work required to build a family,educate and take care of our children's health and provide for our families' future needs become unimportant
even though we pay lip service to those ideals.This breaks down our sense of community and so we become less caring of the people in need.

Now how do we cure our addiction as you have correctly diagnosed it? When this greed and the need to hit the jackpot to satisfy the greed is restricted to a few it may have been curable;but when it permeates our entire society what can we do about it? I would like to hear your thoughts on this.

This reminds me of something I read in one of Lewis Lapham's essays about money occupying such a central position in our society that anything we do is measured by whether that activity makes tons of money for us or is able to save similar amounts for us and not whether it helps improve our community,or roads or sewers or healthcare or the education of our children.If this idea of a cost effectiveness does not bring in the idea of community betterment we will forever be locked into measuring everything by money alone.

Lastly, you can see the effects of our addiction very clearly in the constant resistance to taxes to take care of public services but the same population seems to have no reluctance to spending hundreds if not thousands at the gambling tables in the real casinos that have sprouted nationwide.

Thank you K-W.It is invigorating to wake up to such an excellent post that makes you think.

[rman]

5. Economy is governed by man-made laws.

In the form of, amongst others, WTO, trade-agreements, deregulation, privitization etc.

There is no "invisible hand", there's just the hand of the rich men behind the scenes who rig the system to their own benefit. Of course as long as we don't pay attention to the men behind the curtain, it appears as though that hand is indeed invisible.


"The *fist* of the economy jammed squarely up granma Mini's ass, as some of our Enron friends would say."

[sendero]

6. Well said....

... and many good points. To me, Bush* takes advantage of the general public's complete ignorance about things economic to push his disastrous agenda while claiming (and way too many people buy it) that his policies will work. "My voodoo is good voodoo, just give it X more years to work" :))

The only saving grace here is that people know when the economy sucks regardless of what Wall Street or the statistics say. And this economy does indeed suck, and it has for a very long time.

[sadiesworld]

7. Keep ranting. Please.

:kick:

[ProfessorGAC]

8. Not Bad, But Three Things:

1) First, sound statistical analysis of econometric data is, indeed, a science, and not just astrological readings. The problem is that those of us in the economics community who are looking for causative bases for theoretical constructs are in the minority, and don't get asked to work for Treasury, Commerce, or Labor. And, we especially don't get asked to be on TV.

2) Look into the archives for my posts. I think you'll find that some of us have been decrying the claim of "recovery". There is no recovery. Modest nominal GDP growth at a time when gov't spending is skyrocketing, on borrowed money, is not a formula for sustainable real growth. It also doesn't create employment opportunities and salary growth. Since C is 70% of GDP, anything that doesn't promote an expansion of and enhance the viability of the middle class is doomed to failure. The data proves it.

3) You didn't need to insult ecomomists to make your point. Valid points, all! But, it was hard for me to get past the fact that you think i'm an idiot, just because 75% of economists actually are.
The Professor

[Strelnikov_]

9. I Think The Author Supports Your First Point

He states the case that our economy is being manipulated to benefit a few which could only be done by using a predictive, 'scientific' approach.

As for the third point, isn't one of the goals of the current administration to diminish the confidence the public have in science, thereby filling the void with political ideologues who 'know what is best'.

[ProfessorGAC]

10. My Reply

I don't agree with the basic approach that it's being manipulated. The causation factors aren't that easy to leverage. The NUMBERS are being manipulated to tell something other than the truth.

So, no, the poster isn't saying the same thing. The economy and the financial and capital markets aren't the same thing. The economy feeds those markets, and falsified data and conclusions are being manipulated to shade the fact that people are making a killing on the various markets while manufacturing and critical service companies are being squeezed and people are losing their jobs. That's not the same as manipulating the economy. Nobody is powerful enough to do that. That'd be almost as hard as manipulating the weather. The economy operates at a nearly chaotic state. (Although at a glacial pace, unlike the weather.)

You know the old line about a butterfly flapping its wings in Africa eventually affects the weather in Iowa. Economics is the same. Your decision to NOT buy a pack of gum yesterday may, or may not, effect the overall economy in the indeterminate future. With those kinds of variables, nobody can manipulate the economy.

We can do stupid things, pass bad fiscal policy, overcontrol monetary policy, underregulate, and sleep at the switch, and we can ruin it. But, it can't be manipulated to support some privileged few. The markets, however, can be.

Also, this administration, as little as i respect every single one of them, has nothing to do with the economics community problems. This has been going on for longer than i've been around in it. And, i'm no puppy, anymore. (I wrote my first published paper in 1983! 21 years ago! Sheesh!)
The Professor

[K-W]

15. You dont need to fully understand something to manipulate it.

Edit: To clarify something I am not suggesting a conspricy of elites. That elites understand and control the economy like a puppeteers. All I am saying is that control can be exerted over the system. And there are people who do so. They dont control the overall system, but they have enough influence to do certain things, and thier actions combined have a very large effect. Meanwhile the people, the masses refuse to even think about controlling the system. So we have a system where the elites are exerting thier minimal control, the people arent really exerting any control at all, and this steers the system in ways that tend to, in the short run at least, benefit elites.




All the person who wants to manipulate it needs is a general idea of what has worked in the past or what could work. Often these people fail. From a scientific approach, yes it is very hard to control. But scientists have higher standards than industrialists. They are often just happy with simply effecting the system.

The economy couldnt have been purposely designed to produce the current situation. I did, in my rant not accurately portray the history, which is that this kind of economic structure and approach to economy isnt an invention of our times, it is inherited. It all developed along with society and along with the nation state. During that time, during all times really, there was a ruling elite with political, social and economic power. It only makes sense that an economy would develop to reflect that.

I just dont agree that people do not manipulate the economy. I think it is very possible we are miscommunicating a bit, but what do you call cartel and monopoly creation? What do you call changing legislation to change the parameters of the system? What do you call a company that blackmails society with its labor in order to be bailed out? It is a misreading of chaos theory to think that a chaotic system can't be controlled. It is controlled by factors and many if not all of those factors can be controlled by people. We dont need to understand those factors in order for them to be used. Yes much of the control is done without any concious hand guiding it. The individual actions of people trying to do small things add up to produce effects that have great impact on the economy, but that is manipulation, and some people have the power that thier actions have a very large effect. And whether they know they are doing it or not, they are still manipulating it.

Another thing that bothers me is the comparison to the weather. The economy isnt like the weather, it isnt like the universe. It isnt a natural phenomenom that we should just sit back and study. "Oh thats how that works... interesting" We couldnt, as a society stop the weather, we couldnt as a society introduce a new structure to weather and see what happens. The economy isnt the weather, and while I know this wasnt what you meant in your example, so this is not neccessarily addressed to you, I think the economy is like weather comparison shows an attitude that is dangerous in society. The economy is a chaotic system of our own creation, we arent stuck with our current economy, like we are stuck with the weather. An economy should be no more chaotic than a game of basketball.

That is the problem, we approach it like the weather, not like a human system. We must be willing to change the conditions, to alter the rules, to coerce the actors to create a system that functions within acceptable limits.

If there is a sport and the players salaries are getting out of hand, they cap them. If scoring is too high they change the equipment or the rules to cut down scoring. Just because human interactions and actions are at this point in the realm of chaos does not mean we shouldnt tinker with the structures of society to produce a better system.

The problem is people would prefer to think of it as weather, people dont like to think of thier behavior, thier lives, as something that is controlled. They would rather be passive, under whatever illusion they cook up for why society has to be the way it is than to approach it as a system that could be made better. Meanwhile the system keeps running, badly, and it is our policy as a society that trying to control it is somehow a bad thing.

[loudsue]

11. I have to agree w/ K-W here, professor...

You argue that economics is "a science", and with that said, you support your profession of which, you claim, 75% of its members are idiots, and the other 25% (including yourself and a few others) aren't in positions of power. When you (in item #3) then take personal offense to K-W's post, you only personify the same "me" thinking that K-W is talking about...you're still not on "TV", being one of the people "we all want to be", that K-W was talking about. You still haven't won that lottery.

It's not about you. And trying not to "offend" economists (the 75% heavy majority you, yourself, claim are idiots) then begins to derail the very important discussion at hand. Until the bigger picture can be examined without the egocentric politics of "me, my, mine" interjecting itself into the discussion, minds will just keep slamming shut. We need to OPEN those minds, to look at the larger picture...which is what K-W is asking us to do.

I don't mean this as a personal slam to you. I have read your posts on DU for a long, long time, and respect your contributions. However, your personal offense taken to K-W's post is precisely symptomatic of the "me"-think that the current economic system has caused us all to buy into.

Ayn Rand would be proud. But she never lived long enough to see that the utopia she envisioned would ultimately lead right to fascism, NOT a flourishing Democracy. The current version of "capitalism" that we currently (do not!) enjoy, isn't working for the long-term good of the vast majority of the people; the economy is working for itself. And as K-W points out, way too much of it has ended up in the hands of foreigners and robber barons. Hence, the smoke & mirrors economy we find ourselves in that is nothing but a train wreck waiting to happen.

:kick::kick::kick:

[ProfessorGAC]

13. Sorry, But I Don't Buy It

I was objecting to the offense extended to an entire discipline and its people, not to ME!

I couldn't care less if someone thinks i'm wrong or not. Sometimes i will be wrong and i'll have to live with that. Sometimes, i'll still be right, even though they think otherwise, and they'll have to live with THAT!

So, your entire reply to me is rooted in a misinterpretation of my post. He is diminishing the entirety of the field of study based upon an opinion for which not one fact is given in support. If he wishes to point out the economic theorists (or posuers) at whom his picque is directed, then let's do that. But, he didn't say economist x, or y, he said "economists".

And, if YOU have one shred of data to support your "smoke and mirrors" comment, i'd sure like to see it. The economy is what the economy is. There can be no smoke and mirrors, aside from the absence of honesty in the reporting of what it is, and what the trends truly mean.

The ECONOMY IS NOT controlled (or even controllable) by extrinisic forces. It's intrinsically controlled by a large number of factors and interactions at a nearly chaotic state. Nobody has the power to control an $11 Trillion dollar GDP. All you have to do is look at the results of the Reagan fiscal policy to see that all those machinations accomplished nothing.

The notion that robber barons are controlling the overall economy is not only unsupportable by any known econometric models, but is awfully convenient to state. When no data or proof exists, it starts to sound more like a paranoid delusion than a statement of fact.

So, you agree with K-W based upon your misinterpretation of my first post. I don't care if I"M on TV. I care that people who have a more scientific point of view begin to give the american people the true economic message. So, how is that "me"? I'm interested in the TRUTH! Not in who gets to be the messenger. So, you're supporting K-W by adding to the insult? Huh? I don't get that.

I don't want to beat this to death, but you certainly didn't provide any valid excuse for the original rant to have included those who are trying to get the truth out there. (I suppose that is another "me" thing, huh?)

This is the surprising element. If someone says that native americans are insulted by certain mascots, and another says they shouldn't be, DU'ers run to the rescue of the offended party. The offended party is the one with the right to see the offense. That must not apply here. I get insulted. I take offense. It's my fault. Hmmmm?

Apparently, economists don't get to be offended. If they do, it's because of their own self-centeredness and selfishness. If only i got to be on TV, then i wouldn't be offended. Interesting take, indeed.
The Professor

[K-W]

12. My apologies, to clarify...

Economics isnt a science it is a field of study, biology isnt a science it is a field of study. You can approach any field of study scientifically. My backround is in psychology which has a similar problem. There are some amazing scientists in psychology, but there are alot of people who reject the scientific approach because they want to pretend they know more than the slow pace of a scientific appraoch will afford them in such a complex and unknown field.

I didnt mean to insult all economists, my point is that alot of things we are told about the economy by people with fancy positions are not based on facts learned through a scientific approach, but on unfalsifiable or yet untested theories. Its easy to make elegent theories that match data, its quite a bit harder to make falsifiable hypothesis, test them, and move forward.

So yes, I apologize, I was generalizing. I suppose it comes from the fact that I so rarely hear from grounded economists willing to stick to what they do in fact know scientifically rather than extending speculation under the guise of hard knowledge.

[ProfessorGAC]

14. Thanks

We actually agree. That's why i complimented your first post. There is too much obfuscation in the public side of economics. The local USE branch to which i belong is about 3:1 conventionalists vs. the analytical group. I think you know which one i'm in.

Also, remember, that many of the reports on the economy we hear aren't really from economists. They are those reports that have been sanitized by political appointees. (Say the deputy secretary of commerce). The "real" economists in that dept. are bought and paid for. With their civil service status, they don't want to rock the boat so they can keep moving up those pay grades. Someone sanitizes their analysis, and they keep their mouth shut. But, then what we're hearing isn't something from the economists. We're hearing what a political appointee wants us to hear.

The biggest problem, as i see it, is that too many people with political aspirations, use an economics degree as a launching pad. Then you have idiots like Larry Kudlow getting jobs in the Reagan and 41 administrations as an "economic" advisor. Then, he gets to tout his useless Ph.D. and background to pretend to be a sage on national television. All this when, in reality, my dog understands economics better than does he.

Thanks for your understanding. We'll talk again.
The Professor