William L. Anderson launched a fantastic broadside against the self-anointed Gods of Mainstream Economics on his perfectly named blog Krugman-in-Wonderland. The whole post is, as usual, an insightful analysis of everything that is wrong with mainstream economics and their policy prescriptions, which can basically be summed up as: higher taxes, more regulations. A few excerpts are below.
Indeed, as we shall see, Reich represents a class of people who yearn for the 1950s, when a third of the workforce was unionized, people “believed in government,” tax rates were high, industries such as banking, railroads, airlines, and trucking were tightly regulated, and Americans were fed the kind of news via Progressive newspapers and a regulated broadcast media that the “Reich Class” believed they should have. If one can liken this group to any in history, it would be the Bourbon Dynasty, of which Tallyrand once said, “They learned nothing and they forgot nothing.”
Of course these statists long for the 1950s, perhaps the very pinnacle of unquestioned state power in the United States. In those days, nobody had the means to question the state on a national scale. The mainstream media, as it does today, just peddled the latest garbage coming out of the faces of supposedly smart men. The difference is that today we have the Internet to compete with mainstream media. Although still in its infancy and with a probable torturous battle ahead with the state, the Internet provides an alternative to the mainstream.
More from Mr. Anderson:
Reich says that a strong economy needs a “strong middle class,” and from where does that middle class appear? From the government, of course. His argument goes as follows: we need to confiscate huge amounts of money from rich people (who get rich through nefarious schemes of making and selling goods to others, thereby robbing other people of their wealth). That money then goes to middle class people through government jobs or a private transmission mechanism in which workers are unionized.
The mainstream’s solution to any and all problems? Massive wealth distribution. How these turkey’s come to these conclusions is simply astonishing. Their unshakeable faith in the state should cause us all to question their intelligence. The state, far from being some sort of messianic savior, is the source of our problems in society. Just name a problem and the source is the state. Drug use and violence? State prohibition. Soaring health and education costs? State interventionism, mandates, corrupt payment schemes and third-party payments for even the most mundane events, like regular checkups. Economic stagnation? Failed attempts at centrally planning the economy, fixing the price of money through the shadowy Federal Reserve system and not allowing the necessary correction (by bailing out Wall St. and state-friendly corporations). Even private violence is dwarfed by state-sanctioned violence. The US state reserves the right to wage war anywhere it wishes, killing, maiming, displacing and engendering hatred. There is no doubt that the state kills with impunity, living by a different moral and legal code than the rest of society. I could go on, but you get the idea. When you think of societal problems, think of the state.
According to the [former Secretary of Labour Robert] Reich Class, an economy is nothing more than a transmission mechanism of money; the electronic goods we purchase, if one reads Reich Classers like Robert Kuttner, are there only because of government agencies like NASA. If we are not starving, it is because of the Great Wisdom of the U.S. Department of Agriculture. As long as enough tax dollars flow to Washington, government scientists will continue to invent and create new products that falsely are attributed to entrepreneurs like Steven Jobs, who are nothing more than worthless rentiers whose very presence creates poverty and should be eliminated from our body politic.
Now, an official “default” no doubt will bring headlines and a chorus of angst from the Usual Suspects, but it won’t change the underlying reality about the economy, something that the Reich Class Bourbons simply cannot understand. Few, if any, of them are entrepreneurs or know anything about what entrepreneurs do. For that matter, they know nothing about running a business (even though they believe they know EVERYTHING about such things).
What they do know, however, is how to draw a government paycheck and how to live off the wealth of people like George Soros. And they know they are always right, even when they are not.