Is serious left criticism of government’s share of GDP possible? (16)

Continued from here.

At this point we have to apologize for leaving the impression that the irresponsibility of Washington is somehow the cause of the current fiscal bomb set to go off beneath your feet in the not too distant future.

True, Washington sold you a bill of goods, but that transaction was carried on under the time honored market signboard, Caveat Emptor!

According to the Wiki,

Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects.

The authors of NSC-68 never concealed the fact you would be required to work longer than is necessary to feed, clothe, and, house your family in order to enforce the new order which emerged in the aftermath of World War II.

Washington has always emphasized a call for further sacrifice at every critical juncture in the rocky economic path you willingly adopted for the past sixty years.

You could have demanded a dismantling of the Cordon Militaire in the wake of the the Soviet Union’s collapse, some 20 years ago – a move which might have saved you some of the $9 trillion of public debt run up since then.

But you did not.

This eruption will be your fault, not Washington’s.

It is true, as has been noted both by the authors of NSC-68 and the authors of the NeoCon war planning document, REBUILDING AMERICA’S DEFENSES: Strategy, Forces and Resources For a New Century, that you are incapable of being roused from your slumbers for anything short of a Pearl Harbor-September 11th scale event.

And, it is true that the fiscal bomb currently ticking down to zero will dwarf both those events, and make you long for the happy days of the Great Depression – when only 25 percent of working men and women were unemployed.

However, the present crisis – uncomfortable as it will be for us – is merely a modest expression of a much deeper set of economic forces – forces, which, even assuming the most fiscally responsible of regimes these past twenty years, firmly and irreversibly placed us on collision course with the historically unprecedented catastrophe toward which we now hurtle.

*****

You will recall that the military Keynesianism adopted by the Truman administration in 1950 relied on permanent economic expansion to fulfill two objectives: an open-ended Cordon Militaire around the Soviet Union, and, an improving standard of living for you, the American voters.

The thought process of authors of NSC-68 probably went something like this:

“If we keep producing more silly gadgets and worthless trinkets to inspire their consumer confidence, the idiots will never realize we are busy converting their lives into an unbroken string of empty meaningless moments of unnecessary, intellect-stultifying, toil.”

Can you say: “Iphone2!“

We don’t know how you feel about them, but every time we see one of those suckers, we get the overwhelming urge to rush out and take a second mortgage.

To pay off our home equity loan…

Which paid off our credit cards…

After we bought the previous version of the “Iphone!“

Ah, yes. The virtuous circle of consumer confidence: we work, so that we may borrow; we borrow, so that we may buy; we buy, so that we may work.

Speaking of silly gadgets and worthless trinkets, about now you are wondering how the government managed to fund the production of all those aircraft carriers and Minuteman II missiles systems – which latter runs about $7 million a pop.

As we noted earlier, despite the mystical pronouncements of the high priesthood of the Church of Full Employment, Washington cannot just print an endless stream of dollars to pay for really expensive items like Minuteman II holocaust machines.

To build the machines requires the real effort of real scientists, engineers, tool and die operators, and office managers.

First, these people have to be trained.

Second, the instruments of production, and raw materials have to be secured.

Finally, while they are building engines of death, they are not engaged in economically necessary activity like building homes, growing food, assembling cars, etc.

So, all this must be done on their behalf by people who have real jobs jobs aimed at producing life, maintaining life, supporting life, feeding, housing and clothing the living.

At least up until the moment the engines of death are actually unleashed in a searing cloud of flesh puddling apocalypse heralding the onset of nuclear winter.

(For what it is worth: however, idotic and superstitious it may be for explaining the beginning of life on Earth, Intelligent Design remains very much the leading scenario for how it ends.)

The means for growing the food, building the homes, and clothing the backs of our tirelessly working Dr. Strangeloves-in-waiting, if it is not to be taken from the current consumption of the rest of their fellow American voters, and, the current investment in means of production by American businesses, must be secured from the global labor pool beyond the borders of the United States.

This, of course, is so amazingly obvious to anyone even remotely familiar with the basic principles of economics, it hardly bears mentioning.

Which is why it is routinely overlooked by the brightest minds in the field of economic policy – which minds prefer to keep the evil spirits of economic catastrophe at bay with primitive chants, cabalistic incantations understood only by initiates, catatonic mouthing of talking points, and, a very liberal swinging of sulfurous incenses.

To wit, this threeway exchange between Fareed Zakaria, Jeffrey Sachs and Lawrence Summers:

ZAKARIA: Oil and food prices are sky-high, world markets are down, and the American economy seems to be slinking into a long slump. Just how scared should we be?

Well, I’ve gathered three of the top economists in the world to talk about all of this.

[...]
The first question to you, how scared should we be? In other words, are we in the phase of a crisis where the pain has been felt, and there’s going to be a long, slow working out of this pain? Or are there more unpleasant surprises to come?

You know, what innings are we in?

JEFFREY SACHS, DIRECTOR, THE EARTH INSTITUTE, COLUMBIA UNIVERSITY, ECONOMIC ADVISER TO GOVERNMENTS: I don’t know if Paul and Larry agree exactly, but one thing that could be added to this is the question of whether there’s a way to counteract the downturn itself, not whether one should pump up the economy, and so forth. But is a recession at this point unavoidable? This is going from, you know, gloom to gloomier.

But I would say yes, and that the attempt early on in the next presidency to have a big stimulus and keep pushing, and do everything we can to avoid the downturn, would actually prove to be fruitless at this point, because there are so many imbalances that have been built into the U.S. economy in the last decade, and especially in the last few years, and now added to the — now added on by the global markets — that consumers really are going to have to adjust.

They’ve not been saving for years. The housing market is not going to be the way the economy is going to recover. There’s going to have to be a lot of structural change in the U.S. economy. There’s going to have to be export-led growth to an important extent, because we’ve been borrowing on an amount that we will not continue in the future…

ZAKARIA: So, (UNINTELLIGIBLE), a recession will actually have an effect of cleansing the system. It will take out some of these unsustainable imbalances.

SACHS: No, what I’m saying is that, the idea that there really are enough gears right now to just keep that headline measure of the total size of the economy growing at some positive, close-to-normal rate, is just not the case. We don’t have tools like that, that can do that.

And there are so many problems that need adjustment right now, and such a legacy of imbalance, that I think that heroics to stop a downturn wouldn’t work.

LAWRENCE SUMMERS, FORMER U.S. TREASURY SECRETARY, FORMER PRESIDENT OF HARVARD UNIVERSITY: Jeff, we’ve been friends for 35 years, and I’ve never heard you say such a fatalistic thing.

I don’t disagree with you about the difficulty, the challenge. And I think, no matter how brilliantly policy is carried on, the next three or four years are not likely to be three or four particularly favorable years in American economic history.

But I think it’s a serious mistake to suggest that we should somehow accept our recession like a man, and that if we just do that, we’ll cleanse the imbalances…

Notice how Summers challenges Sachs’s manhood in this exchange – daring the sissy-boy, this wannabe economic chicken-hawk warrior, to display his soft pudgy manicured hands to the viewers.

“You betta man up, bitch!” Summers appears to be saying. “Shit is gonna hit the fan, and we will need every able bodied dick to to be out there swinging.”

Of course, you will also notice Summers never challenges the premise of Sachs’s statement: without a massive reduction in the living standards of American voters, the current eruption of interlocking crises can not be fixed.

To be continued.