More on the Soviet Union and shorter working time…

Bear with us as we touch on a topic that normally is not covered on this blog.

We have argued (here and here) that there may be similarities between the Soviet Union and the United States with regards to hours of work and the crises suffered by each – the Soviet Union in its last years, and the United States now. This might sound far-fetched to some readers, since we are led to believe that there are few things more dissimilar in this world than those between these two arch-rivals of the 20th Century.

Naked Capitalism: Some form of global central planning may be necessary…

In an ironic twist to the growing realization that this crisis is far from over despite the glad-handing in Washington on having barely escaped Great Depression II, Yves Smith, of Naked Capitalism, yesterday suggested that some form of central planning – similar to the collapsed Soviet Union – may be necessary to avoid the economic calamity separately predicted by Peter Boone and Simon Johnson, and by Martin Wolf.

A brief pause from bitch-slapping Paul Krugman to focus on Soviet and American political-economy

Do us a favor: Take off your ideological blinders; suspend the effects of your years of instruction in the indoctrination camps known as the American education system for just a moment.

We’re going to let you in on a secret: Despite what you have heard and been taught all your life, there was, in fact, very little difference between the economy of the United States and that of the Union of Soviet Socialist Republics.

That’s right. Do you need to sit down and catch your breath? Breathe, breathe … Better?

O.K. Let’s continue.

The case for bitch-slapping Saint Paul until he wets his panties: When Harry met Josef

Harry S. Truman and Josef Stalin

As we stated in The case for bitch-slapping Saint Paul until he wets his panties: Dog whistle economics…, Paul Krugman’s support of a higher inflation target by the Federal Reserve is nothing more than a call to reduce still further your standard of living – to break you with starvation in order to fluff up the profits of American corporations. His reputation aside, the support of this policy results in just the consequences we stated.

That the left continues to tolerate him in their midst is a damning admission of their intellectual poverty.

In support of this view we have introduced the case of the Soviet Union, and no doubt this confused you: Wasn’t the Soviet Union a command economy? Did they not declare themselves socialists – or, still worse, communists – and avowed enemies of all things capitalist? What possible parallels can there be in the economies of the two countries?

In the Messiah’s 2010 Economic Report of the President, we find these words:

Chapter 4 examines the transition from consumption-driven growth to a greater emphasis on investment and exports. It discusses the likelihood that consumers will return to saving rates closer to the postwar average than to the very low rates of the early 2000s. It also describes the Administration’s initiatives to encourage household saving. Greater personal saving will tend to encourage investment by helping to maintain low real interest rates. The increased investment will help to fill some of the gap in demand left by reduced consumption.

The report highlights the “Administration policies, such as investment tax incentives, designed to promote private investment.”

It’s a hoot, and if you by chance are in need to a sleeping aid, you just might want to crack it open and feel your eyelids slam shut within fifteen minutes – mouth open, plaster cracking, full-bore snoring, baby! It is the stuff of which boiler-plate is made – the kind of crap that passes for economic policy on the campaign trail, and in town meetings staged for television, with some portion of the audience employed as a prop behind the speaker. Politicians are for investment, in much the same way they are for national security, the flag, and family values.

For politicians, every economic problem afflicting society can be fixed if we just encourage more investment.

The case for bitch-slapping Saint Paul until he wets his panties: Dog whistle economics…

When politicians want to say something about “those people” yet wish to remain within the bounds of civil conversation, they will often employ certain code words that allow them to express their actual position while remaining open to ambiguous interpretation. The Wiki defines the dog whistle this way:

Dog-whistle politics, also known as the use of code words, is a term for a type of political campaigning or speechmaking which employs coded language that appears to mean one thing to the general population but has a different or more specific meaning for a targeted subgroup of the audience. The term is invariably pejorative, and is used to refer both to messages with an intentional subtext, and those where the existence or intent of a secondary meaning is disputed.

In economics right now there is a dog whistle conversation being carried behind your back. The expressed subject of this conversation is whether the Federal Reserve should explicitly set a higher target for inflation and attempt to achieve this higher target as a matter of policy. The conversation is dry, technical, and purposely so, since it is designed to discourage you from joining in or even noticing it.

The conversation, however, is really about how far to go in breaking you with the threat of starvation.

We covered one side of this conversation in the post, The case for bitch-slapping Saint Paul until he wets his panties…, in which we focused on Paul Krugman’s argument that increasing the target for inflation would make it easier for Washington to collapse your wages, and increase corporate profits: You are less likely to notice the deterioration of your standard of living if your wages stay the same while the prices of everything you buy goes up. And, inflating away your income is preferable to a company-wide announcement that everybody has to take a 10 percent pay cut – except, of course, the CEO, his/her gang of bandits, and the company’s bond, and shareholders.