Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
While I empathize with the basic desires of the “Occupy” movement (i.e. lift the poor), I repeatedly have criticized their lack of direction. Marching, chanting, camping in the park and bating police is not an economic proposal.
In this vein, here are excerpts from an article in COMMENTARY
The Class War Goes Hot
Abe Greenwald| @abegreenwald
There are two wellsprings of class warfare in America. There is Barack Obama, whose reelection strategy is to taunt Americans about their rich neighbors. And there are the indignant loiterers of the Occupy movement, who married aimlessness to anarchism and produced a half-witted crime spree that boomer liberals then declared “meaningful.”
The few existing articulate defenders of the Occupy movement note the peace-and-love vibe that abounds at protests. “I go down there every day, and I see sweet, compassionate, politically astute people,” said hippie businessman Russell Simmons about Occupy Wall Street. “I participate in their meditation daily. I see people who have high aspirations for America, who are idealistic. I see the most inclusive group that America has to offer.”
There is only one entry requirement for the Occupy movement: a consuming resentment of the guy who has more than you. It is a grudge cult, a movement created to ennoble mankind’s worst impulse, and it must inevitably lead to violence. The class war must go hot.
. . . it is the same corrosive idea behind the White House webpage urging Americans to “Just enter a few pieces of information about your taxes, and see how many millionaires pay a lower effective tax rate than you.”
The Obama campaign has the class-warfare brains, the credentialed thinkers (and the enlightened billionaire) who’ve drawn up a plan to make someone else pay for the fundamental unfairness of your life. If you think it’s a stretch to compare them to the class-warfare thugs of the Occupy movement just look at Europe, where the brains and thugs re-couple in strong political parties every time a bad-economy election is held.
In Greece, where the evil 1 percent du jour are immigrants, the fascist Golden Dawn party may enter parliament in a few days. In the current French elections, extremists on the right and left have ratcheted up nativist rhetoric. Hungary’s Nazi-nostalgic Jobbik party recently held an EU flag burning rally to protest their longtime scapegoats, the Gypsies.
Yes, it’s true, we’re not Europe. But that’s the point. We’re America, so why are we flirting with this garbage?
I agree, phony class warfare is obnoxious, except when there is a real class war. There is, and the poor are losing. As the gap between the rich and poor grows, are we to believe this merely is a result of hard work by the 1% and sloth by the 99%, or is it a bit more insidious than that?
Sadly, the author is mostly right about the “#Occupy” movement, not because they are evil, but because they don’t understand economics, don’t want to understand economics, and have no plan, other than “we’re angry, so do something about it.”
If they had read and understood Monetary Sovereignty, they would have proposed specific solutions to the growing gap — solutions such as: Eliminate FICA, provide Medicare to everyone, increase Social Security payments, annually increase the standard income tax deduction, etc. And they would be able to answer the typical, debt-hawk “inflation” concerns about social spending.
But no. #Occupy prefers protest-and-party to learn-and-propose. So “#Occupy” will fail the legitimacy test, the gap will grow, and Mr. Greenwald will continue to blame the class warfare on the victims.
If you happen to know any of the #Occupy leaders (are there any?), you might remind them that even the dopey Tea Party offered a specific agenda, wrongheaded as it was, and they didn’t need to break store windows to accomplish their goals.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports
60 thoughts on “–“Two views of the #Occupy movement,” or “These guys are a riot.””
On of the “leaders” of Occupy is David Graeber, author of Debt, The First 5000 Years, who is conversant with MMT.
It’s not Occupy’s purpose to present a proposal for reform. To think it is is to completely misunderstand the thrust of the movement as radical political activism. This is about mobilizing the world contra neoliberalism, neo-imperialism, and neo-colonialism and to provoke the creation of new world order based on social democratic principles rather than exploitation.
One may not like the objective or the strategy, but these people are very intelligent, know their history, and see themselves carrying on a tradition of social and political activism that extends back to the initial overthrowing of privilege in the West. They know that the powers that be are not interested in dialogue and are not in any mood to compromise their control.
This is a battle to the death for the future of globalization, and these people are seriously committed to winning through asymmetrical strategy and tactics, which is the only proven way to confront a vastly superior force. If Occupy goes down, they know another generation will pick up the torches and pitchforks.
Well said, Tom. The underlying theme of this post is that the Occupiers are just too stupid (maybe because they all don’t fully understand MS). I don’t agree. The characterizations and stereotypes of a vast array of people flocking to the streets just don’t hold water.
MS, and other “reformism” plans have great intentions but rely on the faith that a deeply corrupted system/status quo will magically reverse all of its well-evidenced designs… which is to drive the rest of the folks into neofuedal debt-serfdom. All policies (across the globe) are to push severe austerity measures, encourage more financial gimmickry to kick the speculative debt bomb down the road, provide racket protection for the crime syndicate that perpetuated massive financial fraud on the public, and to further consolidate all control via the fastly developing police state (in order to squash any and all real forms of dissent).
The people in the streets may not all be “economically literate” or congealed into a nicely identified ideology but they recognize a rigged system- with a 2nd set of rules for the 1% and a fraudulent dog & pony electoral system when they see one. I find it fascinating that the armchair journalists treat them with such contempt (most are corporate mouthpieces). Especially since they are the ones putting their asses on the line, risking batons, pepper spray, tear gas, and being put in cages for extended periods… even being sexually assaulted and labeled “terrorists”…
Nope. The time for politely asking for more scraps via “better eltes” on a non-rigged playing field has passed. These people should be praised for bringing this conversation to the forefront and actually attempting to do things about it via direct action. (Please look well beyond the encampments and street protests). They have exposed the rotted sytem for what it is. Please, let’s not try to bullshit them/ourselves. Fool me 17 times….
”It would be one thing if this was a country with a general, across-the-board tendency toward leniency for property crime. But we send tens of thousands of people to do real jail time in this country for non-violent offenses like theft. We routinely separate mothers from their children for relatively petty crimes like welfare fraud. For almost anyone who isn’t Jon Corzine, it’s no joke to get caught stealing in America.
But these people stole over a billion dollars, right out in the open, and nobody is doing anything about it. Instead, we get a lot of chin-scratching legislative hearings, and an almost academic-style public discussion about whether or not a crime even took place. If there aren’t arrests in this case soon, ordinary people will correctly deduce that it simply isn’t a crime to steal in America, if the thefts are executed with a computer by white people in suits.”
~ Matt Taibbi (on the Corzine hearing…)
Then what is the plan for a better America, and who will develop it? Or are you satisfied with a permanent state of riot?
What is the plan?
Perhaps, “The Invisible Hand” will guide one person to step up and become “The Leader”. In the times of crises history has produced one such person. Who will it be now in our hour of need.
Please,step forward. We need you NOW.
OWS, must find their own Gandi.
Yeah, and they are very mindful of what happened to Gandhi, Martin Luther King, and Jesus. Being leaderless and amorphous is integral to the asymmetrical strategy being pursued at the moment.
Never face of with the enemy in a pitched battle until you know you can win. That was Gen. Giap’s strategy right up to Dien Bien Phu when the Viet Cong defeated the French and forced their withdrawal from Indo-China, for example. This goes back to Sun Tzu’s Art of War.
You just put your finger on the problem.
The three people you mentioned were leaders, who offered specific proposals. They were not at all “amorphous.” You forgot to mention Lenin, who also had specific proposals. All four succeeded in changing the world.
#Occupy has no leader and no proposals. All it has are general complaints about the realities of the world. It expects the proposals to arise by magic.
Their “woe-is-me” philosophy is diametrically opposite to that of the great leaders.
I can’t figure out whether you think Gen. Giap was a leader or a non-leader. Did he have a plan or no plan, to reach a specific goal or no goal?
Agree that it would be better if Occupy had a constructive economic plan that lifts all boats, rather than fixating on pulling down the 1%.
That said, Occupy’s ignorance of MMT economics is in keeping with the rest of America.
When the French stormed the Bastille, they didn’t have a constructive plan, either.
When the American colonists rebelled against King George, it took them a while to come up with a list of grievances (the Declaration of Independence), let alone hammer out the details of their new government.
Rebellion and revolution are messy things.
MMT has inroads with Occupy, and Michael Hudson and Bill Black are kind of Occupy heroes.
That’s a start, but it might be even better if Warren Mosler and Randy Wray were added to their list of heroes.
Both have been involved already. Warren has contributed copies of his book to their libraries gratis, and Randy visited Zuccotti Park with a UMKC contingent rather early in the protests. They are on this.
Sorry to hear that, Tom. It means #Occupy, rather than wanting to learn and teach, is actively determined to not to have a plan.
Warren flew up to Zuccotti last fall, but it was cold and rainy that day and no one seemed interested in standing out in the rain to hear Warren talk, so it was a wasted trip.
I suggest there are a few constructive and simple economic policy positions that Occupiers might be able to get behind without learning MMT, such as
— $12 minimum wage, as suggested by Jamie Galbraith
— replace FICA with a financial transaction tax. Beowolf has pointed out that the Fed already has the authority to institute a transaction fee without congressional approval.
— using the platinum coin to circumvent the debt ceiling, pay off the national debt, and “pay for” social programs and debt forgiveness.
Some of the other MMT ideas, like eliminating FICA without regard to the deficit, giving everyone a $5000 tax credit, or the JG program, are going to be tougher sales because you do need to understand MMT to appreciate those policies.
How ’bout the post-Keynesian economists pen a letter to Occupy suggesting some simple, positive economic policies and have all the progressive economists and economics bloggers sign it ?
I’ll sign anything that proposes reducing federal taxes (especially taxes on businesses and lower income people), and/or increasing federal spending (especially on Medicare, Social Security, Medicaid and aid for the poor and middle classes.)
The minimum wage is a method by which the government asks the private sector to provide aid to the poor. Since this adds no dollars to the economy, I’d prefer the government take on that job, which would add dollars to the economy.
I appreciate that the minimum wage has no effect major effect on GDP, but it does alter distribution, and it is fairly popular, which is why Galbraith suggested it.
Likewise, I appreciate that replacing FICA with a FAT would have no major effect on GDP, but it does alter distribution, and it extracts wealth from a sector that doesn’t add much value, which is what taxes should do.
I like your economic proposals, Rodger, as well as Warren’s economics proposals, and Wray’s, and Hudson’s, and Keen’s, etc., but they’re each a little different, and they require overcoming the fear of deficits, which the public is simply not ready to do.
If left-of-center economists can’t agree on a plan, which is obviously the case, how do you expect Occupy to agree on a plan ? The general public does not trust economists, and you can’t blame them when economists don’t trust each other. 😉
I don’t have all the answers, just throwing out things to think about.
Tom and Dan,
Personally, I don’t agree with the “destroy-the-world-to-save-it” philosophy. It causes massive misery, and can lead to a dictatorship just as well as a democracy.
It’s a lazy thinker’s plan. (“Let’s just shake everything up and hope that somehow pieces fall in the right place.) It’s the kind of revolution plan that moved Russia from the Tsars to Stalin.
If they have a positive, beneficial plan, they should reveal it and not hope that battling police in the streets somehow will result in something good. That is just, plain stupid.
Rodger Malcolm Mitchell
totally agree with you, rodger. they just don’t get MS, but the problem is nobody does. looks what’s happening in egypt now.
what good does it do to go out and march and get the crap beaten out of you by the cops (or the military, depending on what country you are in) if you don’t have a plan to fix things??
the problem is that pratically nobody understands the monetary system and that, i believe, is by design, so you really can’t blame people, but it’s soooo frustrating when you try to explain things to them and you realize that their visceral rejection of what you are saying is, to a large extent, a conditioned response.
Rodger this is not a destroy the world to save it policy or strategy. It is a policy of the younger generation to prevent TPTB from destroying the world for them and their offspring. They fully get what is happening and they are determined to end it. Then, after ending de facto oligarchy, to build global sustainable community based on the will of the people through direct democracy. The rationale is clear and laid out in many places and has been for at least fifty years if people want to go and find it. I wrote a master’s thesis entitled “Revolution or evolution: Toward a theory of social change” (1972) that began with a paper for a grad class in social and political philosophy, summarizing a lot of the though up till then. This is not something new. It is reemerging to the fore.
If I recall from years past, you admire Marxism, but how will you prevent Stalin, not to mention the bloodshed that preceded him and coincided with him — and then there’s the whole series of brutes leading up to Putin?
What’s the plan for preventing that. Oh yeah, no plan. New “thinking,” so to speak.
Does “out of the frying pan into the fire” strike a chord?
in the case of stalin, i think he came to power as a result of the destabilization caused by, first, the invasion by the US, France and the UK right after WW1 and, second, the civil war that that invasion touched off between the “reds” and the “whites” (belarus). i believe that this civil war was the storyline in the background behind that movie from the 60s, “dr. zhivago.”
some believe that he assassinated lenin (or at least was involved), who was widely respected, by poisoning. the official story is that he died from syphilis.
I’d forgotten about that (I’m not that old). So I quickly checked Wikipedia, and here’s a funny sentence I found there:
Hmmm . . . sound like any other group you can think of?
Rodger and all,
Allied efforts were also hampered by the fact that most of the people hated the White Army, the West’s hoped-for proxy force, who stole donated supplies and clothing meant for rank-and-file soldiers, drank Vodka, gambled, and abused the population they were supposed to be “liberating”.
Another take on it is that the deal between Stalin and FDR was for Stalin to back down the CPUSA and have them rally behind Wall Street Democrats like FDR instead of genuine grassroots socialist struggle or a Socialist Party guy like Debs.
Stalin crushed and killed lots of genuine Leftists, and to read Joseph Stromberg (on Lew Rockwell) about Woodrow Wilson, the Wilson admin also did a fantastic job of crushing and exterminating or deporting the Left — called “anarchists” at the time, generally labeled “domestic terrorists” guilty of “treason” and “sedition” whether they were violent or simply political critics and anti-war activists.
By the 1930s, as the Great Depression dug in, the Elite scheme was to CO-OPT the Left rather than fight it openly. So the pre-existing “Corporate-Socialism” and “Military-Welfare-Statism” described in Kolko’s “Triumph of Conservatism” and by other Libertarians about the early 1900s, McKinley, Taft, etc., was augmented with “Social Democracy”, for the sake of “stability” and to end wildcat strikes and such trends. There was apparently concern that they would win.
The New Deal was a corporate Big capitalist program.
Notice that throughout the Cold War, despite hype and hysteria, the USA never attacked the USSR, it’s main enemy. Nixon even arranged financing to send the USSR grain from ADM corp during the Vietnam War.
Instead the US attacked peasant-led liberation struggles in the Third World, with the excuse that those battles and Op Phoenix terror campaigns were all proxies for fighting the USSR.
US & USSR even cooperated on some actions, like crushing the Left in Indonesia, where the rivers choked with bodies. “Our guys” were the Islamic Right Wing. The crony-communist President does not really sound like he was so much of a problem. He was a wheeler-dealer with various Euro colonialists, and a ladies man. The problem was THE PEOPLE of Indonesia.
Agree with the desire for a “positive, beneficial plan,” Roger, and I keep trying to steer my Occupy acquantances in that direction, without much success so far.
As a wise man once said, “Austerity = poverty and leads to civil disorder. “
but, i think (and fear) that, unlike in the past, the government of today is armed to the teeth and they’re ready to deal with the unrest this time around. in fact, i get the sense that that’s what they really want.
There’s a reason there no “positive, beneficial plan.” Who is going to write it up, speaking for the world? They whole point is bottom up, not top down. You don’t understand what this is about.
Understood. The solution somehow magically will appear. But then, who will approve it and who will implement it? Will that just happen, too?
Sounds like something that sounds great — when you are stoned.
I personally don’t like to do ANYTHING without a plan. However, without a charismatic leader, Occupy is attempting to rely on consensus rule, which is really no rule at all. Lots of luck getting Occupiers to reach a consensus on MMT economic solutions.
Agree that our state of civil disorder could easily take a wrong turn, similar to Europe in the 1930’s. But what is the alternative given that all mainstream political parties are determined to cut the deficit ? Rodger has taught us that austerity leads to civil disorder, and Rodger has been proven correct.
MLK recommended that protesters should focus on one issue at a time, instead of trying to solve all the problems at once. Occupy is not following Martin’s advice. http://www.ep.tc/mlk/14.html
I would suggest that Occupy adopt one simple economic policy issue, like a $12 minimum wage, and hold “Marches for the Minimum Wage.” And if they get that passed, then choose a 2nd policy issue and hold marches for that. Keep going down the line, one issue at a time, just like MLK and Ghandi did.
yeah, but that’s the rub–could you get consensus on that? i doubt it. that’s why there has been no concrete demands. cuz once they go there, the movement will break apart.
BTW, Occupy has a word for what Rodger, Dan Lynch and others are complaining about and asking for. It is “old thinking,” and will always get a thumbs down in an assembly, e.g., when folks from the Old Left try to manage things their (failed) way. This is a rejection of the Old Left and the birth of a New Left, whose character is being fashioned in the force of global revolt. This is going to be with us for a while so don’t get antsy.
If “old thinking” means proposing solutions to a problem, rather than complaining loudly and hoping the complaining itself will solve the problem, I plead guilty to “old thinking.”
Rodsger, there is room for “old thinking,” just not with Occupy. It’s center now is the 99 % movement. See http://www.the99declaration.org/
You said, ” . . . after ending de facto oligarchy, to build global sustainable community based on the will of the people through direct democracy.”
After? First you “end” (destroy?) the 1% by some unspecified means, then while the nation is in a state of incredible disaster (think Somalia), you begin to build a “sustainable” (whatever than means) global community (the whole world?) through direct democracy (meaning, no leaders??) over some unknown period of time.
So 7 billion people all will decide on how to do this. And of course, no plans allowed, because with no plans, who can criticize you? Perfect.
though i totally agree with your comments, rodger, i think the dilemma the Occupy movement has is that there are a whole lot of different people participating… or maybe a better way to say it would be “a whole lot of different ‘factions’.”
if one faction loudly proclaims a solution, like, for example, one based on an understanding of the monetary system that you or MMT’ers suggest, all the other factions will disagree and then the movement will splinter.
i think people like Tom understand this, at the very least on an intuitive level.
Rodger, I have an interpretation of Marx that is rather different than the convention one or even that of ‘Old Marxists,’ and certainly different from Marxist-Leninists.
Marx is outdated as an economist, which he really wasn’t anyway. He was an academic philosopher who wrote his PHD thesis on ancient Greek philosophy. He make some important contributions to Classical Economics and some of his economic insights are still contributions today.
But as a philosopher he is still of note. He was not only a liberal (advocate of expanding freedom) as a opposed to a conservative (advocate of perpetuating the status quo at the time under monarchy, aristocracy, and the remnants of the feudal order). In fact he was a libertarian of the left, advocating “anarchy” in the sense of ending top-down hierarchical authoritarian government based on using the state’s monopoly on violence to advance privilege. Most of what he advocated as a philosopher was radical at the time and earned one a death sentence in absentia, which is a reason he went to England, which was much more liberal than Europe at that time. What most people don’t grasp is that much of what Marx was trying to accomplish philosophically and even to some extent economically is accepted as matter of course today.
Moreover, I have friends who are immigrants from Iron Curtain countries who were educated in to Marxism. They complain that Marxism was never tried in their countries. In addition, they are appalled and a lot of things happening in the US, which they say they have seen before close up.
I am not advocating for Marxism and I don’t think that any of the current protestors are either. As I said, it is dated. However, it is one of the many inputs into “new thinking.” Go to a General Assembly in your area and listen and look with an open mind for a while. Admittedly, it’s crazy and even maddening to have to sit through some of the nonsense, but it’s a matter of principle with them that everyone who speaks in good faith deserves a hearing.
good points, tom. most of the people who make quips about marxists or marxism have never read marx and you’re totally right about marxism never coming to eastern europe despite all the propaganda to the contrary.
anyhow, i confess i haven’t read much Marx myself, apart from one of the myriad translations of the “Manifesto,” but the thing that sticks out for me from that, was, apart from all the bombastic language about revolution and the workers taking control over everything from the bourgeoisie, he basically was advocating increased government spending–a point not lost on even JFK in a princeton commencement speech back in ’62 or ’63 where he advocated “spending in peacetime as in war” and joked that there probably wouldn’t have even been a Marx had spending been higher in england back then.
What is happening now is an intense reaction to neoliberalism on a number of fronts. That Zeitgeist is coming to a close and it is uncertain what will replace it. There are a number of possibilities in the offing. TPTB of the West could emerge dominate and impose a neoliberal regime globally, which the intention. That could only happen if the Zeitgeist is not waning as it seems to be. The other is that the torch will pass to Asia and the emerging world, and coalitions are already forming. The other is that a shock will further exacerbate the situation and result in another rise of extremist populism. Another is that new generation will assert itself and its aspirations will be the basis for the next Zeitgeist. I would prefer to see the later, which is, of course, the intention of Occupy and similar movements. There isn’t homogeneity among these groups or even intra-group. This is still shaking out. The job now is mobilizing “youth” (you are only as old as you feel) to get on board with countercultural change, which would manifest as social, political and economic shifts as well. Only time will tell how this plays out.
Yes. We must get out of the central planners’ box of thinking which makes us all think we are dependent on the machine. It has us all so conditioned that any discussion of an alternative immediately triggers classic binary thinking….(if not Capitalism ‘good” then you must be advocating Totalitarian Stalinist Russia- Communist “evil”), nevermind that the current system is headed that way anyway via a Corporatocracy. Imagining and working on anything alternative to this machine must mean you are inhaling too much bong water. Yet, any modest amount of research shows that Big Banks, Big Ag, Big Energy, and Big War are DESTROYING the panet via full frontal assault on food, water, ecologies, and humans. So who is hitting the pipe too hard, someone who chooses to stop participating in such a mess or one who still clings to the rotting corpse?
The “woe is me” group down on the streets are looking out for way more than just themselves…. they understand that “rational self-interest” is a lie and what helped drive this mess.
“This is why, as we will see again in later posts, a crucial component of the transition has to be the deepening of decentralized, participatory, bottom-up decision processes that can be summarized under the heading of “participatory economics,” as spearheaded a.o. by Michael Albert and Robin Hahnel in several pathbreaking books in the 1990s and 2000s.”
4. Economic and Monetary Localization (Sacred Economics)
“Motivation: As community has disintegrated around the world, people yearn for a return to local economies where we know personally the people we depend on. We want to be connected to people and places, not adrift in an anonymous global monoculture. Moreover, global commodity production puts localities into competition with each other, fomenting a “race to the bottom” in wages and environmental regulations. Moreover, when production and economic exchange are local, the social and environmental effects of our actions are much more obvious, reinforcing our innate compassion.
Transition and policy: The trend toward local economy has already started. Spiking energy costs and ecological awareness prompt businesses to source more supplies locally, and millions of consumers are awakening to the health benefits of locally grown, fresh food. People everywhere show a strong desire to reconnect with community, and some city and regional governments have initiated “buy local” campaigns. Thousands of communities around the globe have launched local currencies, and although these occupy a tiny niche today, they get people used to the idea and provide a template for future local currencies backed by local governments.”
Dan’s point above that even MMT economists who agree about both the analysis of the problem and the theoretical solution, don’t see eye to eye on policy, strategy, and tactics is well taken.
Something similar may be said about Occupy and the 99% movement, which both agree at least generally about the analysis of the problem. However, there are theoretical, policy, strategy, and tactical difference among them that are the subject of much open discussion, pretty much everything is on the table except violence, although the black bloc does not accept that view.
There are some very savvy people in both groups, as well as similar groups globally. They meet and talk to each other. This is not the uncoordinated hippy-fest that the media are projecting it as. Moreover, the media submerged coverage of the May protests, giving the impression that the protest movement is dying. Don’t fall for it. It’s all part of the neoliberal (“capitalist”) propaganda machine at work.
Except these folks aren’t actually advocating capitalism at all but rather oligarchy based on socialism for the privileged (capitalize the gains and socialize the losses). Neoliberalism = neo-feudalism, neo-colonialism, and neo-imperialism. Poppy Bush when he was president to an international conference in 1995: “I will not do anything that reduces American standard of living.” Meaning it’s fine for 5% of the global population to use 50% of the resources, so butt out or get whacked.
But its’ not actually 5%, either, due to “distributional effects.” That’s nonsense about standard of living domestically, since standard of living is measured relative to productivity, while in the US worker share of gains from increased productivity has been falling since the Reagan administration. The rising standard of living is being distributed to the top.
The protesters not only of the US but the world get this loud and clear. That’s why they aren’t in a mood to negotiate for crumbs. They reject MMT’s policy formulations as a compromise with the status quo that settles for crumbs but still leaves labor, a factor of production at least as important as capital, being treated as a commodity rather than as a factor.
There are not all “kids” either. Many are accomplished professionals and professors, like David Graeber, who has been one of the leaders for years and has published extensively on this, which got him fired from his professorship at Yale. You may disagree with them, but don’t underestimate them.
Said more simply (without all the “neos”): “MMT and MS don’t agree on every detail, so there is no use coming up with an economic plan. We’ll just protest, and any changes that occur will be better for the poor of the world.”
curious, rodger, have there been any Occupy protests in your area? have you been to them (like warren and randy)?
now, what if you were to go? what would you say to them??
now, let’s suppose that you go and they elect you leader of their local Occupy chapter or whatever, what exactly would YOU do as the leader?
At my age? Yikes!
I’d find the five most intelligent, charismatic, motivated people I could, and teach them Monetary Sovereignty. We then would agree on one central idea (“Deficits increase my savings” or “Deficits create jobs” or “Medicare for everyone” or . . . )
Once they were at a point where they could debate with establishment types, I’d collect enough money to hire a good PR agency, to get them on talk shows, to argue that central idea.
I’d also send them to one area (NY? RI?) and have them form local groups, also indoctrinated with MS and the central idea.
Then begins the money collection, because at least one of them has to run for President (so the selection of the area is important), not that he/she need to win, but running for President collects lots of $ and gets ideas across. (remember 9-9-9?)
O.K., it took one old man about five minutes of thought to come up with the above. I’m sure a bunch of young men could do much better.
And it would be rejected by most as “old thinking,” not because the content is old thinking but due to the presentation. The strategy has to be to get them to discover it for themselves, rather than telling them how it is, top-down.
For example, Ron Paul’s thinking is very popular even on the left. How more “old thinking” can you get than that, but for whatever reason it has made solid inroads especially among younger people.
Sitting down as an equal and engaging with the assembly is a sine qua non of success in dealing with this process, which is their process.
When I first addresses the General Assembly around here, I told them how old I was and my story of how I had gone through the process in fifty years ago. Many there were my age then. I said that there were similarities but the situation was different now, as well the people. I told them that this was their process, and they had to go through it themselves to internalize it. Trust the process.
But when it came down to discussing specifics about economics, I was confronted by a lot of fixed ideas from the Paul types, for example, who are not stupid and know their stuff. They are not a push over by any means. The argument actually got pretty nuanced when the person I was interacting with turned out to have been employed by the Fed and knew quite a bit about it.
Might want to stop using the word “poor”. Perhaps “working people” or “debt slaves” might be more apt. Most people do live paycheck to paycheck and are one emgergency/accident/lost job away from losing everything but the shirt off their back but hey, “poor” is relative right… The majority of protesters (miraculously) still have some kind of “job”. It may come as some surprise that many of those taking a stand still have some layers of financial insulation from the ongoing economic crisis, but through simple powers of observation and dot connecting, they see the writing on the wall. You don’t have to be “poor” to recognize institutionalized, normalized crime when it has been exposed.
Occupy the SEC is certainly not a bunch of camping hippies and notice Occupy Homes successfully getting people back into useless vacant (fraudulantly foreclosed) homes. These are all forms of ‘direct action’ making a real impact.
This is slightly off-topic but relevant. It demonstrates a trend towards new thinking but at the same time, a clinging to the religion of “growth”.
“At the conference, Swami Atmapriyananda recited an old teaching story about a fisherman lounging at the wharf. A businessman comes up and asks why he isn’t out there fishing. “I already caught enough today to feed my family.”
“But if you fish more, you could sell the fish and make money.”
“Why would I want to do that?”
“With the money, you could buy more boats and hire other people to man them.”
“Why would I want to do that?”
“Well, then you could make even more money and retire.”
“Why would I want to do that?”
“Then you could spend your days lounging on the wharf and only fishing as much as you pleased.”
“But that’s what I’m doing right now.”
During the Q&A at the end of the conference I offered a variation to this story. The businessman tells the fisherman he could make more money. “Why would I want to do that?” Because if you don’t, you won’t be able to make your debt payments and I will seize your boat!”
That’s just a silly comparison, Rodger. And hopefully, MMT economists and supporters and MS, and MMR, etc.are working together to form a coalition based on what they agree on, even though they make bicker strongly about what the disagree over.
Occupy and the 99% movement in the US, as well as other such movements in the US and abroad are now doing this. It’s a crucible. Just because you haven’t taken the time to research it (as I have) you seem to think that this means it isn’t happening and that those people are a rag-tag bunch of dirty hippies, which is just what the propaganda machine wants you to think.
Moroever, let’s suppose that there was a well-worked out plan and strategy, do you really think that the mainstream media would report it accurately, if they reported it at all.
To get media attention, everyone know that it is necessary to use “street theater.” The right and left both do this continually, but it is mostly the right that gets the press because Fox promotes it and then the echo chamber picks it up. That doesn’t happen with the left.
BTW, the latest thing that some of the “top leadership” are floating is forming a third party along the lines of the Tea Party to try to influence (pressure) the Democratic Party, and like the Tea Party eventually take over from the Establishment.
Sounds good to me. I’m all for it. But if I have to reserach it, that’s a bad sign.
Since, as you say, the media won’t report it, and also, you have researched it, please let me know the moment the coalition arrives at a plan.
I immediately will post it on this blog, which will expose a couple thousand more people to the information. I’m sure Warren Mosler and Billy Mitchell and many others will do the same. I also will write to many newspapers.
Further, if all the marchers will carry signs with one uniform key message (i.e. “Lifting the poor lifts the whole economy”), I’m sure there will be plenty of press.
And hire a good PR agency to contact all the media.
See, that’s a plan.
I can hardly wait (truly). I’m on their side. Just a bit impatient for them to get their act together.
Will do, Rodger. BTW, I have participated in many consensus-based groups and organizations, and it is often tedious and messy, but it is worth it much of the time.
I put up a story at MNE from Inc. Magazine about an old acquaintance of mine who runs his business based on employee consensus. Take a look at it for a working example. This is how primitive tribes conducted their councils, and it is a model that was begun to be adopted back in the 60’s and 70’s.
Those used to a hierarchical organization find it difficult to appreciate how this model works at all. But it does. It just takes a lot more patience and openness to resolving differences dialectically rather than by fiat, which even majority vote is.
You really think this is consensus, out-with-the-old thing is new, unique and revolutionary? Hah. I believed the same kind of loose, we-all-are-equal, down-with-bosses, old-people-know-nothing crap when I was in high school — and that was a long, long time ago. Some things continue to be used, because they are proven to work.
The marchers describe themselves as being in a war against the ruling class. I wonder how a consensus-based system works in an army.
Frankly, I think its a pile of bullsh*t, devised by partying, grass-smoking oh-so-philosophical, pseudo intellectuals, who accomplish nothing, yet feel superior, and who quote authors they don’t understand, but use buzz words to pretend they do understand, and hate to be told to do anything, and don’t have jobs because they keep getting fired for not taking orders. And these are the saviors of our planet??
But hey, I’m ready, willing, able and hoping to see the light. Unlike the kids, I want to learn. But remember, I’m old, so tell them not to take too long with their consensus-based decision-making that doesn’t listen to anyone who knows something, because that’s “old thinking.”
Admittedly, it’s a generation thing, Rodger. Like your I grew up in the forties and fifties and was resigned either to lead a boring conventional life or a bohemian life (“beat” was “in,” then if you recall), or else leading a double life. I decided on the latter. Travelling in Europe in the early Sixties, I even decided to become an ex-pat living in Paris, like the “lost generation” of the twenties, whose art and lit I admired.
But I had to get my service obligation out of the way, so I went to OCS and became a naval officer and began my tour of active duty prior to Vietnam heating up. It during this time I got radicalized. I was assigned to ops where I got clued into what the war was really all about — not bringing democracy to Vietnam, not even the domino theory, but to secure vital resources of Indochina. I also saw how Americans and Vietnamese were being sacrificed to this “god.”
When I got out, I found the Sixties in full swing and I jumped with with both feet, then as grad student in D.C. I participated in the meeting, the rallies and the big demonstations, so I got to learn first hand what was going down. Moreover, I was doing a master’s thesis on it, too. At the same time, I was involved heavily in the intentional community movement and the countercultural revolution.
What I saw was a reversal in the cultural makeup of America, which over the Seventies and Eighties went mainstream and is now the pop culture. Call it “sex, drugs and roll and roll,” if you like, but there’s a lot more to it than than a bunch of dirty hippies turning on and carrying on. Moreover, it’s were subsequent generations started from.
What is happening is generational change and there’s no telling what directions it will take in any generation. But one thing I am pretty sure of is that we are now at another important culture turning point. We’ll see where it goes, or maybe not, since these things take years in the working out and neither of us have that many left, at least in this body. But some people on this blog will see it.
Rodger, there is a lot of truth in what you are saying, though you are being a bit harsh.
Tom, I’m not able to participate in Occupy, but I have some experience with management-by-group-consensus from working at a Japanese owned company, so I can guess what it’s like. It was popular with employees, but darned slow to get new ideas accepted, and no, it would never work during a war.
At first, I didn’t worry about Occupy’s lack of a constructive plan because they were succeeding at shifting the national conversation away from the deficit and on to the economy, instead. I was hoping the economists could take it from there.
But lately I have seen a growing number of Occupiers fixated on taxing the rich to pay down the deficit, probably because they’re picking up those talking points from the Democratic party organization and Neo-economists. Recently a couple of blogs have been pushing “studies” claiming to show that high tax rates don’t hurt the economy. I try to counter with MMT, but the fact that economists can’t agree among themselves does not lend credibility to the profession.
I don’t have an answer, other than to say that the economy may have to get much worse before people are willing to accept new ideas.
You are making a difference with your blog, because you have influenced my thinking. In turn, I try to spread it around. It just takes a long time for new ideas to spread — without a charismatic leader.
“Recently a couple of blogs have been pushing “studies” claiming to show that high tax rates don’t hurt the economy.”
Michael Hudson has marshaled evidence showing that high marginal tax rates actually improve economic performance by encouraging more investment and charitable giving. However, this comes with the cavat of closing loopholes that permit tax avoidance at the top. Nothing inconsistent here with MMT. There will be taxes. It’s better to tax just about anything but worker income in the middle and bottom, or what contributes to primary investment. Hoarding (excessive saving) at the top is therefore a good target for taxation, which should be used incentives what contributes to the economy and society and to disincentivize what detracts. The present tax code is distributing income and wealth to the top, as is easy to see from the US data.
Ironically, Beowolf blogged on this very subject of Occupy lacking a constructive plan. And suggested a financial transaction tax to be used to offset FICA dollar for dollar.
I appreciate that MMT/MS/MMR would prefer to boost deficit spending, but I don’t see public support for that — unless we do it sneakily by “paying for” it with platinum coins.
Public support shifts with the wind. All it needs is someone respected to come out and tell the facts about Monetary Sovereignty, and public support will change.
Remember, Monetary Sovereignty offers relief from taxes plus additional help with medical expenses, education, retirement and employment. Explain the facts and people would love to have those benefits.
The other side provides only austerity, misery and a growing gap between rich and poor.
The advantage is all ours.
OK, let us know when you get the Chicago Tribune to shift with the wind and see the advantages of MS. 🙂
Just kidding. I appreciate your steadfast support for deficit spending.
It is not a class war against the poor; it is a war against humanity, compassion, civil society and against the entire planet; by the forces of selfishness and greed.. As I’ve stated to you time and time again, Mr. Mitchell, I love the concepts of MS and MMT, however the system is corrupted beyond repair. The 1% have bought the electoral process, the Government and have absolute control of the forces that will have no qualms about making the citizens of this country bleed. Get out of line, Sir, and the man WILL now take you away. That’s reality. The necessary changes will NOT come about within the criminal enterprises that are in control. Face it, the rest is all bull s&%t! Soon the re-education camps will be home for those who do not accept their serfdom. .
So you surrender? Or what?
No, Sir, I fight. Though I do not believe the current system can be “worked with”, I continue to spread the word. The difference between most and myself is that I am perfectly willing to put me on the line. The vast majority have no sense of urgency in this regard nor would they be willing to face the fire. I, on the other-hand, believe there is one. That’s what.
Tom, I agree that the current tax code is a mess and massively unfair, with the poster child for unfairness being FICA. All federal taxes remove dollars from the economy and therefore are anti-stimulative.
Anyone who says high rates don’t hurt the economy either:
1. Thinks high rates actually collect less taxes
2. Thinks taking dollars out of the economy doesn’t hurt the economy.
The first can be possible in certain circumstances, while the 2nd is total bullsh*t.
Although federal taxes are not necessary for funding the government, a wise government (is there one?) can use taxes to direct spending in more useful ways.
Look at the distribution of income and wealth since Reagan. What is needed is more equal distribution to get the game going again. Jamie Galbraith has just written the book on it.
Jamie Galbraith is an excellent economist. Yes, of course, the “gap” should be closed, the only question is how.
Too many propose bringing down the rich. I’ve proposed bringing up the poor.
This may go better under “How did the 1% convince the 99% to lose?” topic.
To neatly describe Occupy, that’s a bit like the blind men describing the elephant. It’s a broad movement, and most of the people are just citizens of average intelligence, above or below. I suspect I agree than many people are relatively clueless, not all. (I have not personally attended, mostly online.)
I don’t think the point was to bait the police, except perhaps provocateurs. I think many were surprised and shocked by the cop reaction. Some critics always claim “professional organizers intentionally got people beat up”, dunno. I doubt it.
But you will notice that the cop-public battles BURIED THE DISCUSSION about concerns and policies, while increasing the level of emotion and anger. Hmmm?
There’s also the question on whether or how much Soros funds are being applied via Foundations to co-opt the movement, or even to head off the inevitable and expected public outrage about the economy and bailouts by creating a neutered movement, a la Color Revolutions, which actually usually reinforce neo-liberal policies. One OTPOR guy was seen addressing the crowd. OTPOR is seen as a “student movement”, but some see it as a CIA-managed populist riot.
I think Elites did precisely that around the Iraq War. Instead of years of Chomsky lectures about Vietnam where three people showed up, and a long time organizing an opposition via discussion groups, it seemed the Iraq War opposition was pre-packaged, ready-to-go, an “instant rice” kind of antiwar movement.
Is that a GOOD thing? Some think it’s good that there was already a vast domestic and global opposition to “revenge”, before the war started. On the other hand, they failed to stop the war. Why?
Some participants pointed out specific ways it was ineffective, starting with the leadership, such as generally agreeing with the concepts of a War on Terror and the official 9/11 story (or mixed stories) about how 19 hijackers led by the former CIA asset Osama Bin Laden attacked Wall St and the Pentagon like America and our Military machine and Air Defense was a helpless cripple. (Most of the key Air Force defense was “away” on training exercises, a big group was away training in Saudi Arabia that morning.)
The FBI leadership also thwarted their own top counter-terror agents’ efforts, that’s so official news it was on mainstream TV, Colleen Rowley but not Robert Wright and other agents.
This was the basis behind the Govt’s assertions that justified imperial adventures and “Long War”.
So the peace movement leaders bought into the war movement’s storyline. Hmmmm?
Is there a deeper reason Occupy is buying into the Deficit Hawks’ argument? Other than the fact that this “fiscal austerity” has been sold hard for 30+ years, including by Democrats and all the mainstream economists?