Sunday, August 25, 2019

It's the Economists, Stupid!

I found this article blasting mainstream economists of interest. Not so much because it told me anything new; I am quite familiar with the critiques Benyamin Appelbaum levels in this essay, which is adapted from his forthcoming book, The Economists’ Hour: False Prophets, Free Markets and the Fracture of Society. But it's interesting that Appelbaum is a member of the New York Times editorial board and felt moved to write an entire book pillorying economists for giving policymakers bad advice for decades. This is a trend that should be encouraged! There are few things more important to future progress than breaking out of the economic straightjacket of the last 40 years.
"As the quarter century of growth that followed World War II sputtered to a close, economists moved into the halls of power, instructing policymakers that growth could be revived by minimizing government’s role in managing the economy. They also warned that a society that sought to limit inequality would pay a price in the form of less growth. In the words of a British acolyte of this new economics, the world needed “more millionaires and more bankrupts.”
In the four decades between 1969 and 2008, economists played a leading role in slashing taxation of the wealthy and in curbing public investment. They supervised the deregulation of major sectors, including transportation and communications. They lionized big business, defending the concentration of corporate power, even as they demonized trade unions and opposed worker protections like minimum wage laws. Economists even persuaded policymakers to assign a dollar value to human life — around $10 million in 2019 — to assess whether regulations were worthwhile.
The revolution, like so many revolutions, went too far. Growth slowed and inequality soared, with devastating consequences. Perhaps the starkest measure of the failure of our economic policies is that the average American’s life expectancy is in decline, as inequalities of wealth have become inequalities of health. Life expectancy rose for the wealthiest 20 percent of Americans between 1980 and 2010. Over the same three decades, life expectancy declined for the poorest 20 percent of Americans. Shockingly, the difference in average life expectancy between poor and wealthy women widened from 3.9 years to 13.6 years.
Rising inequality also is straining the health of liberal democracy. The idea of “we the people” is fading because, in this era of yawning inequality, there is less we share in common. As a result, it is harder to build support for the kinds of policies necessary to deliver broad-based prosperity in the long term, like public investment in education and infrastructure."
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Why did America listen to the people who thought we needed “more millionaires and more bankrupts?”

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