http://truth-out.org/news/item/8404-the-invisible-hand-is-invisible-because-it-isnt-there

The Invisible Hand Is Invisible Because It Isn’t There

Monday, 09 April 2012 09:33By Elena Callahan, New Deal 2.0 | News Analysis

Americans have had it drilled into them that government is bad, but a new narrative is surfacing. Last Thursday, Roosevelt Institute Senior Fellow Jeff Madrick kicked off the Roosevelt Institute’s new flagship initiative,Rediscovering Government, at an event in New York City, declaring, “There is no economy without government. There is no America without government. Government doesn’t have a role; it is integral.” In a keynote address, Roosevelt Institute Senior Fellow Joseph Stiglitz also argued that healthy societies have strong governments and that his research has shown that “the reason the invisible hand often was invisible was that it wasn’t there.”Watch the full video of the opening remarks and keynote below:

http://vimeo.com/39495157

Stiglitz says that “most Americans don’t realize that we are no longer the country of opportunity that we think of ourselves, that America today has less equality of opportunity than any of the other advanced industrial countries.” He points out how many like to say that our economy is doing well because GDP is growing, but that “if you’re going to be judging how well an economy is doing, clearly I think the key metric that one wants to focus on is what is happening to the living standards of most citizens.” He says that most Americans don’t realize how bad we’re doing, including the fact that “the median income of a full-time male worker today is the same as it was in 1968,” and “if you look at median household income it is the same today as it was a decade and a half ago.”

How did our society get to a place where government has taken a back seat and where people are wary of government control? Stiglitz thanks the conservatives who have successfully touted false ideology about markets over the past 40 years. While they like to blame the government for inequality, Stiglitz notes that not even Adam Smith thought markets were anything beyond efficient. “Nobody ever said that they were fair, that they would lead to a distribution of income that was socially acceptable.” Furthermore, he says, “many of the aspects of our inequality are a result of market failure. People who don’t have health insurance when they get sick wind up in extreme poverty and they can’t get health insurance because of a whole set of market failures.” He says it’s “striking that in spite of the fact that there is no intellectual basis for what you might call a ‘Smithian’ view that unfettered markets lead to efficiency,” conservatives have marched ahead with this idea.

So why was there so much economic growth after World War II? Stiglitz says one reason is “the legacy of the Roosevelts, the legacy that government made a difference.” In making the case for government he also points out that “government has played an important catalytic role in a whole variety of other areas. If you think about our modern economy, you think about Internet, you think about biotech, you think about telecommunications and all of these things rest on government-funded basic research.” He recalls a conversation with a Scandinavian finance minister who, when asked how his economy was so successful, answered “high taxes.” Stiglitz took away that “if you’re going to have a well-functioning economy… you have to pay for what you get. You need to have a well-functioning government that provides education, infrastructure, research, technology, all these things, and we have to pay for it.” Given that markets are not predictable nor interested in social problems, our government should stop bailing the financial institutions out and start investing in its people and the institutions that benefit them.

Watch the whole thing.

destroythegop:

barackobama:

Yeah, no. 

LEARN MORE: www.barackobama.com/romney-deficit

anticapitalist:

The recession has hit all groups hard but the deepest impact has been on young Americans.  Take a look above at wages for young high school graduates

How does an America with no middle class look like? 

A strong middle class has been at the core of what has been promoted as the American Dream.  How would America look like if the middle class simply vanished?  We may not need to wait too long at the current rate since we are quickly siphoning people off the middle class and throwing them into lower income brackets.  The vast majority of Americans do not buy into the propaganda promoted on the tightly controlled media outlets.  In fact, the latest Congressional job approval numbers are at a record low of 10 percent according to Gallup.  To put this low figure in perspective 16 percent of Americans approved of how BP handled the catastrophic Gulf oil spill at the peak of the blowout.  This low Congressional approval is all coming during a supposed economic recovery where 46,000,000 Americansreceive a monthly charge to their debit card for food assistance.  Even government figures show the big job growth sectors of the next decade to be in low paying fields.  What would America look like without a middle class?

Yeah, go for it Republican morons, let’s give MORE tax cuts to the rich.

You guys are either clueless or assholes.

I suppose there’s no reason you can’t be both, however.

http://www.dailykos.com/story/2012/02/19/1065048/-You-don-t-own-me?via=blog_1 

Great diary here.  Really sums up the pathology that is the Republican South.

You don’t own me

by Mark Sumner for Daily Kos

There’s a basic, historical misunderstanding at the root of modern Republican philosophy. A little fact that seems to get overlooked. It’s not their insistence that the road to fascism begins with good health care. It’s not even the pretense that President Obama somehow masterminded an economic collapse, bank bailout, and massive deficit weeks, months or years before he came into office. No, the incident that the GOP has let slip is a little more basic.

The South lost.

See, Republicans seem to have mistaken “wage slavery” for … that other kind of slavery. They must have, because anyone who understood that workers are employees, and not property, would recognize that workers have rights.  Not justsomerights, not a neatly restricted little subset of rights, but the same rights as the people who employ them. They would recognize that the rights of an employer do not include the ability to abridge the rights of an employee.

Only they don’t. When you see Mitt Romney or Rick Santorum or John Boehner railing against government overstep on religion, conscience, what-have-you, you can be 100 percent certain that their concern is that somewhere, somehow an employer might have to allow his employees to do something that, you know, miffs them. That millions of employees might be forced to do without needed health care … doesn’t enter into the equation. 

It’s easy to see how employers might be confused, considering all the love being lavished on them by both parties, and with the paeans being sung to them as magical “job creators.” And hey, we already pretty much handed over that fourth amendment to them, what with peeing in a cup or being able to fire people because of an old photo on Facebook. Republicans have been busy reinforcing that lesson by insisting that anyone who collects so much as an unemployment check should be subject to any rules they want to set. It’s no wonder that the line between handing someone a paycheck, and holding someone’s title, should have gotten blurred.

So consider this a primer to the confused American business owners and executives who might have listened just a little to long to all that sweet praise. 

As an employer, you have the absolute right to religious freedom. Attend any church, temple, synagogue or reading room you like. Give as you feel obligated. Worship as you please. Place on yourself any restriction in diet, activity or anything else that you feel is in keeping with your beliefs … but only on yourself.You don’t get to impose these restrictions on your employees.

Your employees are separate from you. Not only that, they are equal to you in rights, no matter how unequal you may be in income. You do not get to tell them who to vote for. You do not get to tell them who they can love. You do not get to use your religious beliefs as an excuse to limit their health care.

No matter how strong your personal faith, your employees are not obligated to live according to those beliefs, expressly because they are personal. You may find it frustrating, but your employees have just as much right to their own beliefs as you do to yours, and whether you pay them pittance on an assembly line or six figures as a manager, you have zero right to carve off a slice of their freedom. The direction of the pay arrow has no effect on who gets to dictate to who.

If the government was telling you, as an individual, that you had to use birth control, that would be a violation of your rights. That’s not happening. They’re just saying that you don’t get to make that decision for the people who work for your company. Because, really, you don’t own them.

If you’re still mad; if you’re upset that healthcare has to be funneled through employers at all … there’s a cure for that. It’s called “single payer.”

Several salient points here:

Republicans value the corporation and the job creator above all. If it was up to them, your employer could tell you what clothes to wear, what you can eat and drink, who to vote for, what medical coverage you can have, what you can talk about, what car you drive, and who you can marry.

No, really.

Think about it.

This is a really twisted mentality.  Somehow, because we all need to work for a living, Republicans believe we give up our basic rights when we are employed.  And not even just WHILE we are at our job, but even away from our job. The employer to them should be able to dictate what we eat and drink on off-hours, what medical care we have off-site, etc.

brosephstalin:

ourben:

baseballlibertarian:

The reason corporations, wall street, and big business give so much money to politicians is simply because it is worth it for them.  They profit off of it.  

Politicians have too much power.  Restrict their power and you’ll see the money dry up. 

How? The consitutiolololololololololololololololololol…

NO.

And then the corporations will lobby to have politicians have more power, or will just do things themselves.

Good summary.

Lolbertarians have no concept of economics, or economic power.

We need another one.

Specifically we need another campaign to put people back to work rebuilding and improving the infrastructure of this country.

Now, there are a legion of idiots out there that believe that the original New Deal, as created and administered by Franklin Delano Roosevelt, was a failure, or that it lengthened the Great Depression, or at least failed to combat the Great Depression.

Not only is this inaccurate, it’s a perfect illustration of the intersection of both intellectual bankruptcy and moral bankruptcy of conservative economic thought.

The idea that the New Deal kept the Great Depression going is my all-time favorite current Right Wing meme and it wins for three reasons: the premise is faulty, the source is discredited, and the entire idea is illogical to begin with.

Let us get this straight: Right Wingers think that government spending with the New Deal didn’t get us out of the depression but government spending to build war equipment did.

Guess what? It’s the same money doing the same things: providing jobs.

Now that we’ve revealed the fact that the inherent concept is self-contradictory, let’s take a look at some associated dynamics. For example, sane economists (in fact, Moody’s, who are not known for their socialistic tendencies) who don’t listen to tools like Milton Friedman and his Austrian School fellow travelers have come up with the following:

Notice that infrastructure building is far more profitable and efficient than any tax cut and in fact most tax cuts yield negative returns.

So we see here that in fact tax cuts are some of the least effective economic stimulus packages (and some of them actually retard economic growth), which is why the Bush tax cuts, which are still in effect and which conservative economists don’t like to mention basically didn’t do anything for the economy. You’ll also note that in fact the best short term spending is extending unemployment insurance benefits and food stamps and the best long term spending is infrastructure improvements. 

LOOKING AT UNEMPLOYMENT DATA

Now let’s look at some specific graphs about the New Deal.

Unemployment was nearly 25% when FDR was sworn in as President in March 1933. I mention this because you have to specify when FDR took over as some conservatives have mistakenly and brazenly stated that FDR caused the Great Depression, which is not surprising as they also believe Barack Obama caused the Recession starting in December 2007, over a year before he was actually sworn in as President.

By 1937, he had dropped unemployment to about 10%, which is a drop of 15 percentage points in FIVE YEARS.  Show me anywhere else in U.S. history that happened.  In only five years.

Another stupidity that conservatives like to trumpet is that FDR prolonged the Great Depression.  Well, he certainly didn’t end it overnight, but the economy when he took over was in free fall and there were people talking about the military having to take over.  But getting the economic problems under control in five years isn’t too bad, all things considered.

THE RECESSION OF 1937

The same austerity hucksters existed back then too and they convinced FDR that the worse was over in 1937 and that the New Deal should be scaled back. This attempt to reign in spending and to balance the budget, as fiscal conservative wonks want right now, caused the unemployment rate to bounce back up to 13% in 1938.  FDR immediately realized these people were fools, and instituted the Second New Deal, which brought the unemployment rate down to 5% when Pearl Harbor took place.

What this also means is that anyone who listens to what the Republicans want when it comes to economics or budgets should be immediately laughed at.

Now, ignorant conservatives will tell you that the original New Deal didn’t work, but they’re obviously wrong when you look at the statistics.  The so-called “failure” of the New Deal brought unemployment down from 25% to 5% BEFORE WORLD WAR TWO.

You might also run into an ignoramus who is mystified about the uptick in unemployment.  There is no dispute about what caused this: it was austerity-loving budget-balancers.

http://en.wikipedia.org/wiki/Recession_of_1937

To quote Wikipedia: “By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt’s advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill.[3] The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.”

Bolded text mine. The cause of the downturn was not too much spending, or too much regulation, nor anything else conservative poltroons like to babble on about.

CONSERVATIVE TACTIC #3: LEND-LEASE AND MILITARY BUILDUP

Another conservative tactic is to cite the Lend-Lease program and the military buildup that took place prior to Pearl Harbor.  But the Lend-Lease program was a tiny expenditure that mainly involved us loaning existing military equipment to foreign countries and the military building prior to Pearl Harbor was likewise tiny and in any case neither got going until war broke out in Europe in late 1939.

LOOKING AT THE GROSS DOMESTIC PRODUCT

Conservatives will also tell you that unemployment is a rotten indicator, never mind the fact that they’ve used it themselves. Nothing like moving the goal posts if you’re a conservative.  But let’s look at the Gross Domestic Product.  If all FDR did was create government jobs for people, the GDP would not have increased during the New Deal.  Oh, but it did:

In March 1933, when FDR was inaugurated, GDP had collapsed from about $825 billion (in 1999 dollars) to down to $600 billion (in 1999 dollars). By 1937, GDP had rebounded and made up all of it’s losses, and by 1940, the GDP had shot up to $1 trillion (in 1999 dollars).  All that before World War Two and Pearl Harbor, which just to set the record straight since conservatives love distorting the historical record, took place in December 1941.

LOOKING AT PRIVATE INVESTMENT

Now, maybe we should use private investment as a measurement? If you have massive government spending and taxation, private businesses aren’t going to invest, isn’t that the libertarian/conservative mantra?

The following graph speaks for itself and requires no explanation.

LASTING RESULTS OF THE NEW DEAL

Now, let’s look at how the New Deal had a permanent and lasting effect on improving the nation.

The New Deal was made up of various government programs, such as the Civilian Conservation Corps, which contributed the following:

• Bridges: 46,854
• Lodges and museums: 204
• Historic structures restored: 3,980
• Fire lookout towers: 3,116
• Wells and pumphouses: 8,065
• Forest roads: 2,500 miles
• Roads and truck trails: 7,442 miles
• Large Dams: 197
• Water supply lines: 5,000 miles
• Fences: 27,191 miles
• Fish rearing ponds: 4,622
• Beaches improved: 3,462
• Trees planted: 3 billion
• Fires fought: 6.5 million days

The Civil Works Administration contributed the following:

• New roads: 44,000 miles
• Road repairs: 200,000 miles
• Drainage and irrigation ditches: 9,000 miles
• Levees: 2,000 miles
• New water mains: 1,000 miles
• Sanitary and storm sewers: 2,700 miles
• Bridges: 7,000
• Pumping stations: 400
• Swimming pools: 350
• Athletic fields: 4,000
• Schools, new or improved: 4,000
• Airports, new or improved: 1,000

The famous WPA contributed the following:

• Urban streets 67,000 miles
• New Sidewalks: 24,000 miles
• New street lighting: 838 miles
• New traffic signs erected: 937,000
• Rural roads: 532,000 miles
• New bridges: 78,000
• Tunnels Vehicular: 26 Pedetrian: 193
• Schools New: 5,900 Additions: 2,170 Renovated: 31,300
• Libraries New: 151 Additions: 67 Renovated: 856
• Hospitals New: 226 Additions: 156 Renovated: 2,168
• Office and administrative Buildings: 6,400 New: 1,536 Additions: 323 Renovated: 4,524
• Firehouses: 2,700
• Jails and prisons: 760
• Airports New: 350 Enlarged: 700

I could also cite the Public Works Administration, the SEC, the FHA, or just saving the banks from going out of business as well, but you get the idea.

COMPARATIVE ANALYSIS OF OTHER COUNTRIES

The final conservative tactic is to state (without evidence, naturally) that the global economy got better naturally and that FDR was basically along for the ride and that the New Deal didn’t do anything.

Except that when you look at other countries, you’ll notice that those countries that used mass spending to help people recovered more quickly from the Great Depression and those that didn’t do this really did have to wait for World War Two spending to lift themselves out of economic malaise:

Canada didn’t go anywhere because neither party wanted to impose mass spending: 

http://en.wikipedia.org/wiki/Great_Depression_in_Canada

Australia did get out of the Depression thanks to a program similar to the New Deal instituted by Prime Minister Michael Savage.  New Zealand had no program and therefore did not get out of the Depression: 

http://en.wikipedia.org/wiki/Great_Depression_in_Australia
http://en.wikipedia.org/wiki/First_Labour_Government_of_New_Zealand

The UK screwed up too, imposing austerity and creating additional hardship: 

http://en.wikipedia.org/wiki/Great_Depression_in_the_United_Kingdom

DISCREDITED CONSERVATIVE SOURCES

Let’s take a look at the discredited sources for conservative lies.  Most of this anti-New Deal rhetoric comes from a hack named Amity Shales, demolished here:

http://www.ourfuture.org/blog-entry/2008104430/amity-meet-eric

And also two UCLA professors who should be immediately fired if they haven’t been already, demolished here:

http://www.prospect.org/cs/articles?article=learning_from_the_new_deals_mistakes

FINAL SUMMARY

Along with a faulty premise and implausible source material, the actual assertion is illogical and makes no sense.

Think about it: the argument used is that since WW2 brought us out of the Great Depression, the New Deal was therefore a failure, and therefore government spending is a failure.

Really?

How do these “economists” think World War Two was paid for, through private charity?

The argument is so ludicrous it actually goes like this: since government spending during WW2 got us out of the Great Depression and government spending on the New Deal did not get us out of the Great Depression, government spending is evil and wrong-headed.

I’d be charitable and say they cannot understand real economists, but they cannot even make logical arguments. Nor do they fact-check their data, nor do they even stop to think: is what I am saying even making sense? Such is the mark of not someone who wants the best for the country, or even their own party, but someone who is either knowingly arguing disingenuously or is so addled they are basically a member of a non-thinking cult.

Engaging and discrediting these people’s ideas has become a necessity.

A happy meme on the libertarian side of the fence is that we can gut government and lower taxes and the happy happy rich people will fall all over themselves to give more charity to help the poor out and make up the difference.

Except that the math doesn’t add up.  Honestly, the true libertarians, they don’t care. They will continue to believe this bullshit no matter what, and they really just want an excuse to be selfish assholes.  They really don’t care how many people die, as long as they can keep a dime more of their money.

But there are others who have mistakenly bought into this stupid dogma, and for them, the following is intended to dispel any illusions.

A truly horrible and stupid book called “Who Really Cares” made the rounds a few years ago claiming that religious conservatives give more money to the poor than secular liberals, and that’s also a bullshit claim, but not one I’m currently addressing with this post.

Americans give around $300 billion to charity every year.  This includes giving to overseas charities and also to churches.  Now, you might ask “Why do you care if it goes to churches?”  Well, as we’ve noticed a lot of these megachurches are funded through charity and don’t tell me these million-dollar megaplexes are meant to be charity for the poor.  Clearly a LOT of charity giving to churches does NOT end up in the hands of the poor or needy.

Now, let’s assume that if we lower taxes on everyone, Americans double their charity giving.  Mitt Romney’s tax rate in 2011 was 14% and he gave 14% of his income to charity, most of it to the Mormon church to bash gay people.  But, regardless.  Let’s assume that the amount of giving doubles.  No economist, no pundit, not even anyone on the stupid and insane website mises.org believes this to be true, but let’s assume it for the sake of argument. I’m trying to give everyone the benefit of the doubt.

So that’s $600 billion per year to the poor and needy if we gut government, right?

Except how much money do you think actually the poor and needy require?  Social security alone costs $700 billion a year, medicare and medicaid combined costs roughly the same, and that’s not including actual welfare, payments, etc.

Now, even if we dump all these programs on the free market, the costs are not going to be cut in half, but let’s assume they are.  Let’s assume that privatizing social security, medicare, and medicaid means that these programs are going to only cost around $700 to $750 billion a year.

So your charity replacement is still over $100 BILLION DOLLARS SHORT.

Libertarians never, ever address this.  They never try to do so.  They just parrot “charity will take care of it” and don’t actually investigate whether it will or not.

It won’t.

Let’s remember there was a time in this country when we had mass poverty.  The time we had mass poverty was before the New Deal when people actually received aid.  Conservatives who want to go back to the 1950s conveniently forget the 1950s were funded through government programs like the GI Bill and Social Security.  Libertarians who want to go back to the 1920s are simply insane.

Now, you might think that “but really, the rich will step up”.  No, they won’t.  Here’s a study that shows that the average family who makes a middle class or lower wage only gives 4% of their income to charity and people who make over $75,000 a year only give 2% of their income to charity.

http://www.nytimes.com/2010/08/22/magazine/22FOB-wwln-t.html?_r=1 

The Charitable-Giving Divide

With the battle over whether to extend the Bush tax cuts for the wealthy shaping up as the major political event of the fall, opponents of repeal were handed a bounteous gift this summer when Bill Gates, Warren Buffett and 38 others announced that they formed a pact to give at least half their wealth to charity. After all, what better illustration could there be of the great social good that wealthy people can do when the government lets them keep their hard-earned dollars to spend as they please?

The problem is that the exceptional philanthropy of the superwealthy few doesn’t apply to the many more people defined as rich in the current debate over the Bush tax cuts — individuals earning over $200,000 and couples with revenues over $250,000. For decades, surveys have shown that upper-income Americans don’t give away as much of their money as they might and are particularly undistinguished as givers when compared with the poor, who are strikingly generous. A number of other studies have shown that lower-income Americans give proportionally more of their incomes to charity than do upper-income Americans. In 2001, Independent Sector, a nonprofit organization focused on charitable giving, found that households earning less than $25,000 a year gave away an average of 4.2 percent of their incomes; those with earnings of more than $75,000 gave away 2.7 percent.

This situation is perplexing if you think of it in terms of dollars and cents: the poor, you would assume, don’t have resources to spare, and the personal sacrifice of giving is disproportionately large. The rich do have money to spend. Those who itemize receive a hefty tax break to make charitable donations, a deduction that grows more valuable the higher they are on the income scale. And the well-off are presumed to have at least a certain sense of noblesse oblige. Americans pride themselves on their philanthropic tradition, and on the role of private charity, which is much more developed here than it is in Europe, where the expectation is that the government will care for the poor.

Note that giving to your alma mater is also included in charity giving figures.  Also note that the problem is lack of empathy, not anything else.

A lack of identification with those in need may explain in part why a 2007 report from the Center on Philanthropy at Indiana University found that only a small percentage of charitable giving by the wealthy was actually going to the needs of the poor; instead it was mostly directed to other causes — cultural institutions, for example, or their alma maters — which often came with the not-inconsequential payoff of enhancing the donor’s status among his or her peers. 

So you think the rich will pony up?  They’re giving an average of 2% of their incomes now, and you think this will make up the shortfall of a 20% or more reduction in taxation?  They’re going to take all that extra money they suddenly have and just pour it into charity?

No, obviously not.  

Libertarians also presume “rational self-interest” which is another topic to highlight their stupidity, but if they are correct in this belief, that everyone operates based on rational self-interest, then in fact the rich will NOT give more money to charity because there is no benefit from them to do so. They do not “feel good” by giving 20% of their income to charity any more than they would “feel good” (assuming altruism and feeling good from it is operating in “rational self-interest” in the first place) donating 2% of their income to charity, because they really don’t understand about nor empathize with the poor or needy.

So the charity angle is just a way for a libertarian or conservative to justify his or her own pathological selfishness.