I wish we could require all Americans – at least all decision-makers – to read Joseph Stiglitz’s new essay in the New York Times. Inequality is strangling us economically, politically, socially, he writes.
…with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying.
The various Austerity Furies here and around the world are punishing the poor and middle class because…why? I think their economic theories are invented to hide their belief that human lives must be sacrificed to appease their invisible gods with the invisible hands. The Austerity Furies are like Biblical Jephthahs or Homeric Agamemnons, sacrificing their children with prehistoric ritualistic fervor.
The cultists are not disturbed by the failure of magical austerity in Europe. Hey, sometimes the magic works, sometimes it doesn’t. So throw a few more bodies into the economic volcano.
In his essay, Stiglitz details the consequences of inequality:
The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth.
This means the rich have captured enough of the nation’s wealth that their servants can no longer afford the hammers to build their masters’ mansions.
…the hollowing out of the middle class since the 1970s, a phenomenon interrupted only briefly in the 1990s, means that they are unable to invest in their future, by educating themselves and their children and by starting or improving businesses.
This points to the creation of a permanent peasant class. The one percenters have become economic termites eating away at the foundations of their wealth.
…the weakness of the middle class is holding back tax receipts, especially because those at the top are so adroit in avoiding taxes and in getting Washington to give them tax breaks… Low tax receipts mean that the government cannot make the vital investments in infrastructure, education, research and health that are crucial for restoring long-term economic strength.
When you throw people into a volcano what you get are burned people. No gods appear to build your roads and bridges or educate your kids. The Austerity Furies believe the failure doesn’t prove the failure of their magical thinking, it just means they haven’t thrown enough bodies into the fire.
…inequality is associated with more frequent and more severe boom-and-bust cycles that make our economy more volatile and vulnerable.
This means that the magical thinking isn’t just failing, it’s causing the very problems the human sacrifices are supposed to solve.
The question is, what is to be done about the cultists? It’s very likely that democracy cannot survive the Austerity Furies as anything like a fair and open experiment in self-government. So something must be done, but what?
First, the cultists have to be exposed for what they are. Too many in the media are happy to describe them as advocates of a legitimate economic theory. They are invested with good intentions they do not have. What they mean to do is punish and sacrifice people in the superstitious hope that the gods will turn austerity into prosperity. That’s not going to happen, and we need to say so to everyone we meet.
Also, sad to say, many folks seem willing to throw themselves into the volcano. Hopes are vain that we can enlighten these people through appeals to the “rational self-interest”. The self-immolating can’t hear such arguments because they come wrapped in a language they do not know.
We need them to understand that they’ve been duped by the Austerity Furies, and painting vivid pictures of the cultists is a first step in getting that done. Stiglitz’s essay helps in that task.
Photo by Kahunapule Michael Johnson under Creative Commons license