Two rules govern economic thinking: caeteris paribus (all things being equal) and “in the long run” when (Lord Keynes reminds us) all of us are dead.
These two rules lead to a kind of “magical thinking” of the sort about which Joan Didion wrote the year she lost her daughter and her husband. Because they are inclined to think in the long run, caeteris paribus, economists often glide over the damage that can happen in the mean time.
We are now living through a “rough spot” generated by Democratic leadership ill-equipped or unprepared to face the consequences of systemic inequality. Time and again, Democrats turned to the market to solve problems that markets are ill-suited to solve. Markets solve market problems. They do not solve educational, health, welfare, or security problems.
Let’s begin with security problems. When the Defense or State Departments submit their “requests,” they do not ask for what taxpayers can afford. They demand what they believe necessary for the long-term existential maintenance of the state. They may not get everything they ask for; but when they build their budgets, this is what they request.
By contrast, health, education, and welfare have learned to low-ball their asks. What level of health do our citizens deserve? What level of health does our economy require? Or, consider education. Following World War II, the US pored billions of (2018) dollars into the economies of Europe and Asia, hoping thereby to build a firewall against Communism, Nationalism, and Fascism. Europe and Asia took these US taxpayer dollars and pored them into health, education, and welfare. Because, having experienced fascism, nationalism, and communism first-hand, they recognized that the only “cure” was a public that was highly educated, healthy, and sufficiently secure to value the ideals of freedom and democracy. The US, by contrast, is following a script written by nationalists, demagogues, and tyrants. By starving our citizens, we hope to win compliance.
As we passively mark the fall of republics all around the globe to nationalism, right-wing extremism, and xenophobia, it is important that we bear in mind that this need not end well. There is no rule that says: irrespective of what you do, things will turn out alright. Indeed, it might end very badly in the long run, caeteris paribus.
What are you doing? How are you resisting?