Grappling With Globalization 4.0 [feedly]

Grappling With Globalization 4.0
https://www.project-syndicate.org/commentary/globalization-4-0-by-klaus-schwab-2018-11
Grappling With Globalization 4.0

Nov 5, 2018 KLAUS SCHWAB

The world is experiencing an economic and political upheaval that will not cease any time soon. The forces of the Fourth Industrial Revolution have ushered in a new economy and a new form of globalization, both of which demand new forms of governance to safeguard the public good.

GENEVA – After World War II, the international community came together to build a shared future. Now, it must do so again. Owing to the slow and uneven recovery in the decade since the global financial crisis, a substantial part of society has become disaffected and embittered, not only with politics and politicians, but also with globalization and the entire economic system it underpins. In an era of widespread insecurity and frustration, populism has become increasingly attractive as an alternative to the status quo.

TRUMPONOMICS AND THE US MIDTERM ELECTIONS

Nov 2, 2018 PROJECT SYNDICATEinterviews ANGUS DEATON, et al.about the state of the US economy and its political implications.

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But populist discourse elides – and often confounds – the substantive distinctions between two concepts: globalization and globalism. Globalization is a phenomenon driven by technology and the movement of ideas, people, and goods. Globalism is an ideology that prioritizes the neoliberal global order over national interests. Nobody can deny that we are living in a globalized world. But whether all of our policies should be "globalist" is highly debatable.

After all, this moment of crisis has raised important questions about our global-governance architecture. With more and more voters demanding to "take back control" from "global forces," the challenge is to restore sovereignty in a world that requires cooperation. Rather than closing off economies through protectionism and nationalist politics, we must forge a new social compact between citizens and their leaders, so that everyone feels secure enough at home to remain open to the world at large. Failing that, the ongoing disintegration of our social fabric could ultimately lead to the collapse of democracy.

Moreover, the challenges associated with the Fourth Industrial Revolution(4IR) are coinciding with the rapid emergence of ecological constraints, the advent of an increasingly multipolar international order, and rising inequality. These integrated developments are ushering in a new era of globalization. Whether it will improve the human condition will depend on whether corporate, local, national, and international governance can adapt in time.

Meanwhile, a new framework for global public-private cooperation has been taking shape. Public-private cooperation is about harnessing the private sector and open markets to drive economic growth for the public good, with environmental sustainability and social inclusiveness always in mind. But to determine the public good, we first must identify the root causes of inequality.

For example, while open markets and increased competition certainly produce winners and losers in the international arena, they may be having an even more pronounced effect on inequality at the national level. Moreover, the growing divide between the precariat and the privileged is being reinforced by 4IR business models, which often derive rents from owning capital or intellectual property.

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Closing that divide requires us to recognize that we are living in a new type of innovation-driven economy, and that new global norms, standards, policies, and conventions are needed to safeguard the public trust. The new economy has already disrupted and recombined countless industries, and dislocated millions of workers. It is dematerializing production, by increasing the knowledge intensity of value creation. It is heightening competition within domestic product, capital, and labor markets, as well as among countries adopting different trade and investment strategies. And it is fueling distrust, particularly of technology companies and their stewardship of our data.

The unprecedented pace of technological change means that our systems of health, transportation, communication, production, distribution, and energy – just to name a few – will be completely transformed. Managing that change will require not just new frameworks for national and multinational cooperation, but also a new model of education, complete with targeted programs for teaching workers new skills. With advances in robotics and artificial intelligence in the context of aging societies, we will have to move from a narrative of production and consumption toward one of sharing and caring.

Globalization 4.0 has only just begun, but we are already vastly underprepared for it. Clinging to an outdated mindset and tinkering with our existing processes and institutions will not do. Rather, we need to redesign them from the ground up, so that we can capitalize on the new opportunities that await us, while avoiding the kind of disruptions that we are witnessing today.

As we develop a new approach to the new economy, we must remember that we are not playing a zero-sum game. This is not a matter of free trade or protectionism, technology or jobs, immigration or protecting citizens, and growth or equality. Those are all false dichotomies, which we can avoid by developing policies that favor "and" over "or," allowing all sets of interests to be pursued in parallel.

To be sure, pessimists will argue that political conditions are standing in the way of a productive global dialogue about Globalization 4.0 and the new economy. But realists will use the current moment to explore the gaps in the present system, and to identify the requirements for a future approach. And optimists will hold out hope that future-oriented stakeholders will create a community of shared interest and, ultimately, shared purpose.

The changes that are underway today are not isolated to a particular country, industry, or issue. They are universal, and thus require a global response. Failing to adopt a new cooperative approach would be a tragedy for humankind. To draft a blueprint for a shared global-governance architecture, we must avoid becoming mired in the current moment of crisis management.

Specifically, this task will require two things of the international community: wider engagement and heightened imagination. The engagement of all stakeholders in sustained dialogue will be crucial, as will the imagination to think systemically, and beyond one's own short-term institutional and national considerations.

These will be the two organizing principles of the World Economic Forum's upcoming Annual Meeting in Davos-Klosters, which will convene under the theme of "Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution". Ready or not, a new world is upon us.


KLAUS SCHWAB

Writing for PS since 2013
15 Commentaries

Klaus Schwab is Founder and Executive Chairman of the World Economic Forum.


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When History Rhymes [feedly]

The IMF defense against (Fascist) Nationalism

When History Rhymes
https://blogs.imf.org/2018/11/05/when-history-rhymes/

By Christine Lagarde

November 5, 2018

The graves of soldiers who died in World War I, near Verdun, France: on the 100th anniversary of the end of the Great War, leaders should listen closely to the echoes of history (photo: Mathieu Pattier/SIPA/Newscom)

Mark Twain once said that "History never repeats itself, but it does often rhyme." As heads of state gather in Paris this week to mark 100 years since the end of World War I, they should listen closely to the echoes of history and avoid replaying the discordant notes of the past.

For centuries, our global economic fortunes have been shaped by the twin forces of technological advancement and global integration. These forces have the prospect to drive prosperity across nations. But if mismanaged, they also have the potential to provoke calamity. World War I is a searing example of everything going wrong.  

The 50 years leading up the to the Great War were a period of remarkable technological advances such as steamships, locomotion, electrification, and telecommunications. It was this period that shaped the contours of our modern world. It was also a period of previously unprecedented global integration—what many refer to as the first era of globalization, where goods, money, and people could move across borders with relatively minimal impediments. Between 1870 and 1913 we saw large gains in exports as a share of GDP in many economies—a sign of increasing openness.  

All of this created great wealth. But it was not distributed evenly or fairly. This was the era of the dark and dangerous factories and the robber barons. It was an era of massively rising inequality. In 1910 in the United Kingdom the top 1% controlled nearly 70% of the nation's wealth—a disparity never reached before or after.

Today, we can find striking similarities with the period before the Great War.

Then, as now, rising inequality and the uneven gains from technological change and globalization contributed to a backlash. In the run-up to the war countries responded by scrambling for national advantage, forsaking the idea of mutual cooperation in favor of zero-sum dominance. The result was catastrophe—the full weight of modern technology deployed toward carnage and destruction.

And in 1918, when leaders surveyed the corpse-laden poppy fields, they failed to draw the correct lessons. They again put short-term advantage over long-term prosperity—retreating from trade, trying to recreate the gold standard, and eschewing the mechanisms of peaceful cooperation. As John Maynard Keynes—one of the IMF's founding fathers—wrote in response to the Versailles Treaty, the insistence on imposing financial ruin on Germany would eventually lead to disaster. He was entirely correct.

It took the horrors of another war for world leaders to find more durable solutions to our shared problems. The United Nations, the World Bank, and of course the institution I now lead, the IMF, are a proud part of this legacy.

And the system created after World War II was always meant to be able to adapt. From the move to flexible exchange rates in the 1970s to the creation of the World Trade Organization, our predecessors recognized that global cooperation must evolve to survive.

Today, we can find striking similarities with the period before the Great War—dizzying technological advances, deepening global integration, and growing prosperity, which has lifted vast numbers out of poverty, but unfortunately has also left many behind. Safety nets are better now and have helped, but in some places we are once again seeing rising anger and frustration combined with a backlash against globalization. And once again, we need to adapt.

That is why I have recently been calling for a new multilateralism,  one that is more inclusive, more people-centered, and more accountable. This new multilateralism must reinvigorate the previous spirit of cooperation while also addressing a broader spectrum of challenges—from financial integration and fintech to the cost of corruption and climate change.

Our recent research on the macroeconomic benefits of empowering women and modernizing the global trading system provides new ideas on ways to create a better system.

Each of us—every leader and every citizen—has a responsibility to contribute to this rebuilding.

After all, what was true in 1918 is still true today: The peaceful coexistence of nations and the economic prospects of millions depends squarely on our ability to discover the rhymes within our shared history.

Related Links:
New Economic Landscape, New Multilateralism
Steering the World Toward More Cooperation, Not Less

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DeLong: Blame the Economists? [feedly]

Blame the Economists?
https://www.project-syndicate.org/commentary/economists-and-the-financial-crisis-by-j--bradford-delong-2018-11

DeLong is skilled in both theory and policy -- you won't agree with some of his line, but he is always worth a listen...

Blame the Economists?

Nov 1, 2018 J. BRADFORD DELONG

Ever since the 2008 financial crash and subsequent recession, economists have been pilloried for failing to foresee the crisis, and for not convincing policymakers of what needed to be done to address it. But the upheavals of the past decade were more a product of historical contingency than technocratic failure.

BERKELEY – Now that we are witnessing what looks like the historic decline of the West, it is worth asking what role economists might have played in the disasters of the past decade.

TRUMPONOMICS AND THE US MIDTERM ELECTIONS

Nov 2, 2018 PROJECT SYNDICATEinterviews ANGUS DEATON, et al.about the state of the US economy and its political implications.

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From the end of World War II until 2007, Western political leaders at least acted as if they were interested in achieving full employment, price stability, an acceptably fair distribution of income and wealth, and an open international order in which all countries would benefit from trade and finance. True, these goals were always in tension, such that we sometimes put growth incentives before income equality, and openness before the interests of specific workers or industries. Nevertheless, the general thrust of policymaking was toward all four objectives.

Then came 2008, when everything changed. The goal of full employment dropped off Western leaders' radar, even though there was neither a threat of inflation nor additional benefits to be gained from increased openness. Likewise, the goal of creating an international order that serves everyone was summarily abandoned. Both objectives were sacrificed in the interest of restoring the fortunes of the super-rich, perhaps with a distant hope that the wealth would "trickle down" someday.

At the macro level, the story of the post-2008 decade is almost always understood as a failure of economic analysis and communication. We economists supposedly failed to convey to politicians and bureaucrats what needed to be done, because we hadn't analyzed the situation fully and properly in real time.

Some economists, like Carmen M. Reinhart and Kenneth Rogoff of Harvard University, saw the dangers of the financial crisis, but greatly exaggerated the risks of public spending to boost employment in its aftermath. Others, like me, understood that expansionary monetary policies would not be enough; but, because we had looked at global imbalances the wrong way, we missed the principal source of risk – US financial mis-regulation.

Still others, like then-US Federal Reserve Chairman Ben Bernanke, understood the importance of keeping interest rates low, but overestimated the effectiveness of additional monetary-policy tools such as quantitative easing. The moral of the story is that if only we economists had spoken up sooner, been more convincing on the issues where we were right, and recognized where we were wrong, the situation today would be considerably better.

Specifically, in the years before the crisis, financial deregulation and tax cuts for the rich had been driving government deficits and debt ever higher, while further increasing inequality. Making matters worse, George W. Bush's administration decided to wage an ill-advised war against Iraq, effectively squandering America's credibility to lead the North Atlantic through the crisis years.The Columbia University historian Adam Tooze has little use for this narrative. In his new history of the post-2007 era, Crashed: How a Decade of Financial Crises Changed the World, he shows that the economic history of the past ten years has been driven more by deep historical currents than by technocrats' errors of analysis and communication.

It was also during this time that the Republican Party began to suffer a nervous breakdown. As if Bush's lack of qualifications and former Vice President Dick Cheney's war-mongering weren't bad enough, the party doubled down on its cynicism. In 2008, Republicans rallied behind the late Senator John McCain's running mate, Sarah Palin, a folksy demagogue who was even less suited for office than Bush or Cheney; and in 2010, the party was essentially hijacked by the populist Tea Party.

After the 2008 crash and the so-called Great Recession, years of tepid growth laid the groundwork for a political upheaval in 2016. While Republicans embraced a brutish, race-baiting reality-TV star, many Democrats swooned for a self-declared socialist senator with scarcely any legislative achievements to his name. "This denouement," Tooze writes, "might have seemed a little cartoonish," as if life was imitating the art of the HBO series "Veep."

Of course, we have yet to mention a key figure. Between the financial crisis of 2008 and the political crisis of 2016 came the presidency of Barack Obama. In 2004, when he was still a rising star in the Senate, Obama had warned that failing to build a "purple America" that supports the working and middle classes would lead to nativism and political breakdown.

Yet, after the crash, the Obama administration had little stomach for the medicine that former President Franklin D. Roosevelt had prescribed to address problems of such magnitude. "The country needs…bold persistent experimentation," Roosevelt said in 1932, at the height of the Great Depression. "It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something."

The fact that Obama failed to take aggressive action, despite having recognized the need for it beforehand, is a testament to Tooze's central argument. Professional economists could not convince those in power of what needed to be done, because those in power were operating in a context of political breakdown and lost American credibility. With policymaking having been subjected to the malign influence of a rising plutocracy, economists calling for "bold persistent experimentation" were swimming against the tide – even though well-founded economic theories justified precisely that course of action.

Still, I do not find Tooze's arguments to be as strong as he thinks they are. We economists and our theories did make a big difference. With the exception of Greece, advanced economies experienced nothing like a rerun of the Great Depression, which was a very real possibility at the height of the crisis. Had we been smarter, more articulate, and less divided and distracted by red herrings, we might have made a bigger difference. But that doesn't mean we made no difference at all.

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Veterans’ Healthcare: A Workers’ Comp System That Actually Works [feedly]

Veterans' Healthcare: A Workers' Comp System That Actually Works
https://workingclassstudies.wordpress.com/2018/11/05/veterans-healthcare-a-workers-comp-system-that-actually-works/

Most American workers who get injured on the job or develop an occupational disease soon become familiar with the inadequacies and injustices of our fifty state system of workers' comp. Private employers fight their claims. Rehabilitation services are fragmented and managed by private insurers. If they're unable to work and lose their original job-based health coverage, even workers who've been  approved for treatment for specific work-related injuries or illnesses can't pay their other medical bills. .

The situation is very different for the nine million men and women who qualify for medical benefits from the Veterans Health Administration (VHA). The VHA—much under attack these days by President Trump and Republicans in Congress–functions as a federal workers' comp system for former members of the military with service-related ailments. While vets' medical problems are not always recognized as quickly as they should be, once a vet is in the VHA system, any single malady of the mind or body makes them eligible for any other kind of treatment they need in the future–from hip replacements to cancer surgery or hospice care.

Eligible veterans end up on an island of socialized medicine within our larger for-profit healthcare industry. Like residents of the UK covered by the National Health Service, VHA patients gain access to an integrated network of public hospitals and clinics, employing doctors, nurses, and therapists who are salaried not paid on a "fee for service" basis. About a third of the VHA's 300,000 staff members are veterans themselves, which helps create a unique culture of solidarity between patients and providers that has no counter-part in U.S. private sector medicine.

The VHA has a predominantly poor and working-class patient population because that's who enlists in our professional armed forces these days. But military work also exposes non-combat veterans to injuries or illnesses like those suffered by millions of civilians in blue-collar jobs. As Rick Weidman from Vietnam Veterans of America explains, "the military is a collection of very dangerous occupations."

For example, the most common complaint of VHA patients is hearing loss and tinnitus. That's because almost every branch of the military exposes enlisted men and women to high levels of noise. In the Air Force and Navy, there's the constant roar of jet engines. In the Navy, there's the metallic clanking that rebounds through the echo chamber of a submarine or other naval vessel. You don't have to deployed to the Middle East to be deafened by explosions from improvised explosive devices (IED's) or the U.S. military's own ordinance. Just going through basic training can be enough to insure diminished hearing capacity later in life. Similarly, infantry training leads to musculoskeletal problemsbecause it involves hauling around 60- to 100-pound packs that place an excessive burdenon necks, shoulders, knees, backs and ankles.

Veterans also bring signature issues from particular eras. In Vietnam, draftees and enlisted men were exposed to Agent Orange. Other Cold-war era soldiers and sailors found themselves involved in chemical warfare agent experiments, nuclear weapons testing, and base cleanups with little personal protection. Troops sent to liberate Kuwait came back with symptoms of "Gulf War Syndrome." Veterans of multiple tours of duty in Iraq and Afghanistan were often exposed to lung damaging and cancer causing toxic burn pits. Insurgent use of IEDs in those two countries has led the VHA to become a leading center of research on and treatment of traumatic brain injuries suffered by thousands of troops (and professional football players as well, who now arrange to have their brains sent to the VHA for post-mortem verification of their condition).

Combat veterans often suffer from mental health issues, like PTSD. In researching a new book called Wounds of War, I spoke with men in their eighties or nineties whose searing memories of death and destruction in Germany, Japan, or Korea still disturbed their sleep at night. Veterans who suffer from mental and behavioral health problems—whether acquired in or exacerbated by military service— are more prone to substance abuse, particularly opioid use if chronic pain is involved. They also become a bigger suicide risk. An estimated 20 veterans a day kill themselves, although three-quarters of those have never been to the VHA for treatment. Between 2006 and 2015, the number of veteransreceiving specialized mental health care at the VHA rose from 900,000 annually to 1.6 million, a reflection of continuing collateral damage from open-ended foreign wars.

VHA caregivers are trained to identify and treat these very specific wounds of war.  Every VHA employee gets training in how to better recognize and assist patients who are suicidal. Thousands of VHA mental health providers are taught the latest evidence-based treatments for PTSD. (Outside the VHA, only 30% of private sector providers use such treatments).  And primary care providers and specialists alike recognize the kind of diseases produced by toxic exposures, such as Agent Orange related diabetes or burn-pit created respiratory problems.

The VHA ranks with Kaiser Permanente as one of the most heavily unionized health care systems in the country; the American Federation of Government Employees, National Nurses United, and the Service Employees International Union have more than 120,000 members serving veterans. Thanks to this union role, management pays more attention to the kinds of occupational hazards that are rampant in health care work generally, particularly in non-union hospitals. The VHA was the first – and may be one of the only U.S. healthcare systems – to install the kind of lift equipment that helps nursing staff avoid debilitating and often career ending back, neck and shoulder injuries.

Due to the mental health problems of some of its patients, the VHA goes to great lengths to insure a safe workplace for health care providers. In Northern California, VHA staff labor under the shadow of what happened at The Pathway Home, a private not-for-profit program housed at a state run veterans' facility in Yountville, last March. Three professional caregivers – one a current and another a former VHA employee –were shot and killed by a vet who then committed suicide.

The VHA is far from perfect. As even its defenders note, veterans' health care could be far more comprehensive and effective than it is. Unfortunately, both Congress and recent presidents have made it harder for VHA to care for veterans. Congress has allowed the Department of Defense to give hundreds of thousands of veterans other than honorable discharges, making them ineligible for VHA care. In some cases, soldiers have been discharged for active duty misconduct related to PTSD or brain injuries – yet they have a particular need for coverage.  Congress has also consistently underfunded and understaffed the Veterans Benefit Administration (VBA). This is the separate agency that determines whether a veteran has actually suffered from an occupational illness or injury—and to what degree of disability.  As a result, there are far too many eligibility determination delays before veterans become VHA patients.

Under the Trump administration, the VHA faces even greater challenges. Earlier this year, Congress – with the support of a majority of Democrats — passed the VA MISSION Act,which  will siphon billions of dollars away from the VHA's budget and direct that money toward private doctors and hospitals that are often ill-prepared to treat veterans.  As the VHA is starved of needed funding, health care providers will be laid off (there are already an estimated 49,000 existing staff vacancies) and facilities will close. That will undermine the quality of patient care, and Republicans (with support from the Koch-funded Concerned Veterans for America) and their Democratic Party enablers will use that to make the case for total privatization of the system.  Their aim is to starve the system so that care and services will decline even more. Those who oppose Medicare for All would then use the VHA as a poster child for the "failure" of single payer models, instead of a shining example of how they work better.

Fortunately, members of veterans' organizations, union-represented VHA staff, and community allies around the country are fighting vigorously against VHA privatization. And given voters' concerns about health care, Democrats could use the threat to the VHA as a "wedge issue" against the right wing. If more Democrats would embrace this cause, they might actually win back voters from military families who believed that Trump would defend veterans and their health care.  The fight to save the VHA from the profiteers will help protect a model of healthcare from which all Americans benefit.

Suzanne Gordon

Suzanne Gordon co-authored a 2017 report on veterans' health care for the American Legion called "A System Worth Saving."  She is the author, most recently, of Wounds of War: How The VA Delivers Health Healing, and Hope to the Nation's Veterans, from Cornell University Press. She will be speaking about the book around the country over the next month. She is also a Senior Policy Analyst at the Veterans Healthcare Policy Institute. She can be reached at sg@suzannegordon.com.

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How the Trump Enforcement Numbers Were Calculated [feedly]

In a kleptocracy, Justice is Reversed

How the Trump Enforcement Numbers Were Calculated
https://www.nytimes.com/2018/11/03/business/trump-corporate-penalties-methodology.html

The Times built a database of cases and tapped into academic research to compare corporate penalties during the Obama and Trump administrations.

VISIT WEBSITE
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Weekend Reading: Robert Solow: A Theory Is a Sometime Thing [feedly]

Interesting excerpt from Solow's refutation of Friedman's "natural rate of unemployment". It turns out more likely that capitalism has NO NATURAL RATE OF UNEMPLOYMENT.

Weekend Reading: Robert Solow: A Theory Is a Sometime Thing
https://www.bradford-delong.com/2018/11/weekend-reading-robert-solow-a-theory-is-a-sometime-thing.html

Robert Solow: A theory Is a Sometime Thing: "Milton Friedman... aims to undermine the eclectic American Keynesianism of the 1950s and 1960s... goes after two... lines of thought. His first claim is that the central bank, the Fed, cannot 'peg' the real interest rate... to undermine the standard LM curve.... The Fed can peg the nominal federal funds rate, but not the real rate...

..."These… effects will reverse the initial downward pressure on interest rates fairly promptly, say, in something less than a year. Together they will tend, after a somewhat longer interval, say, a year or two, to return interest rates to the level they would otherwise have had" (Friedman 1968, p. 6). Now we know what 'peg' means.... The goal, remember, is to contradict the eclectic American Keynesian... which did not, after all, require the Fed to control real interest rates forever. If the Fed can have meaningful influence only for less than a year or two, then it is surely playing a losing game, especially in view of those 'long and variable lags.' Is that really so?...

After Paul Volcker's appointment... the real funds rate had been fluctuating around zero... rose sharply to about 5 percent and fluctuated around that level for the next six years.... This sustained 5 percentage point increase in the real funds rate was... a deliberate intervention, designed to end the 'double-digit' inflation of the early 1970s, and it did so, with real side-effects. This chain of events could not have worked through any 'misperception' mechanism; there was no secret about what the Volcker Fed was doing. So the Fed was in fact able to control ('peg') its real policy rate, not for a year or two but for at least six years, certainly long enough for the normal conduct of counter-cyclical monetary policy to be effective.... The difference between 'a year or two' and 'half a dozen years' is not a small matter. This part of Friedman's demolition project seems to have failed as pragmatic economics, although it may have succeeded in persuading the economics profession.

The second, and even more striking, contribution of the 1968 presidential address was Friedman's introduction of the 'natural rate of unemployment' along with the long-run vertical Phillips curve and its accelerationist implications.... I do not have to repeat Friedman's classic discussion of the consequences if the Fed (or anyone) attempts to push the actual unemployment rate below the natural rate: higher monetary growth, at first increased spending, output and employment, as prices adjust with a lag to the new state of demand. But eventually the rate of inflation, whatever it was before, increases and this gets built into expectations.... So the Fed has to create even faster monetary growth to sustain the lower unemployment rate, and you know the rest. Once again, we can imagine such a world; Friedman's claim is that we live in it.... For a brief period in the 1970s and early 1980s, this simple model seemed to do well: if you plot the change in the inflation rate against the unemployment rate (see Modigliani and Papademos 1975), you get a decent downward-sloping scatter that crosses the u-axis at a reasonably defined natural rate or NAIRU). At other times, not so much....

Olivier Blanchard (2016).... First, there is still a Phillips curve... Second, expectations of inflation have become more and more 'anchored'.... Third, the slope of the Phillips curve itself has been getting flatter, ever since the 1980s, and is now quite small. And last, the standard error around the Phillips curve is large; the relationship is not well defined in the data. Taken together, these last two findings imply that there is no well-defined natural rate of unemployment, either statistically or conceptually.... This is very different from the story told so confidently and fluently in the 1968 address.

My mind kept returning to a famous line of dramatic verse: was this the face that launched a thousand ships?... Milton Friedman's presidential address... may not have burnt the topless towers of Ilium, but it certainly helped lead macroeconomics to its current state of refined irrelevance. The financial crisis and the recession that followed it may have planted some second thoughts, but even that is not certain. A few major failures like those I have registered in this note may not be enough for a considered rejection of Friedman's doctrine and its various successors. But they are certainly enough to justify intense skepticism, especially among economists, for whom skepticism should be the default mental setting anyway. So why did those thousand ships sail for so long, why did those ideas float for so long, without much resistance? I don't have a settled answer.

One can speculate. Maybe a patchwork of ideas like eclectic American Keynesianism, held together partly by duct tape, is always at a disadvantage compared with a monolithic doctrine that has an answer for everything, and the same answer for everything. Maybe that same monolithic doctrine reinforced and was reinforced by the general shift of political and social preferences to the right that was taking place at about the same time. Maybe this bit of intellectual history was mainly an accidental concatenation of events, personalities, and dispositions. And maybe this is the sort of question that is better discussed while toasting marshmallows around a dying campfire.

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Eight Lessons from History to Help Make Sense of Today’s Madness [feedly]

Eight Lessons from History to Help Make Sense of Today's Madness
http://dollarsandsense.org/blog/2018/11/eight-lessons-from-history-to-help-make-sense-of-todays-madness.html

By Abby Scher

I learned to peer beyond my political bubble in the early 1980s, first when Ronald Reagan was elected president and destroyed the New Deal coalition in which I was raised and then when Phyllis Schlafly's Stop ERA women indeed stopped the Equal Rights Amendment for women from becoming the law of the land by defeating those of us fighting to win its passage in the Illinois legislature. We needed one more state for the Constitutional Amendment to be enacted, and Illinois was one of three where we had a chance. On the steps of the Springfield, Illinois, capital were white women with lacquered hair wearing skirt suits and beige stockings carrying red Stop ERA signs. They seemed to have stepped out of the past, so how could they stop the forward march of history?

Well, they did. I found out later many were part of a resurging right-wing Christian movement. And I learned the hard way that you have to understand who your political opponents are and not take them for granted in your own righteousness. I ended up researching a doctoral dissertation about right-wing and liberal women in conflict over fundamental questions about U.S. life and governance during the conspiratorial red-baiting era after World War II and during McCarthyism in the 1950s.

McCarthyism took place during the Korean War when Democrat Harry Truman was president. Wisconsin Senator Joseph McCarthy's fellow Republicans were happy to go along with his outrageous, made-up stories about subversives in the State Department or wherever to try to capture the power that they lost during the major political realignment of the New Deal in the 1930s—particularly the right-wing, isolationist Republicans led by Robert Taft who wanted to dismantle Social Security, the National Labor Relations Act and Keynesian management of the economy.  The moderate Republicans like Dwight Eisenhower who generally accepted the New Deal and were relatively liberal on race may have won the presidency in 1954 within this cauldron, but they lost the party in the long run, as we have seen.

Here are eight lessons this history taught me in my struggle to understand my country now.

1. Movements do not always reveal all the roots of their positions when they are fighting their opponents, not the alt-Right nor the anti-communist movement I studied in the 1950s. That means we have to do our research. The women I studied did not foreground their anti-Semitic, right-wing Christian worldview until the conspiratorial bullying of Senator McCarthy lost some of its potency and their more secular-minded allies ran for cover. Many of those who claimed President Obama was an imposter, a secret Muslim born abroad, were racist right-wing Christians who saw him as the anti-Christ. The Tea Party's overlay with the Christian Right was often overlooked by secular reporters covering the movement who were tone-deaf to its underpinnings.
2. War abroad roils up right-wing sentiment, ethnocentrism, and male power at home. We take for granted the backdrop of the Korean War during McCarthyism and the Iraq and Afghanistan wars during our own period. But the blowback from war is hugely formative on the home front. Yes, war fans the flames of Islamophobia but it does more. I first glimpsed the "more" during the right-wing backlash to Barack Obama's first presidential campaign and after he was elected. That's when a new group, the Oath Keepers, composed of former military and police officers, rose up during the Tea Party movement to defend the white republic. Heavily armed militias and the fetish of male power in the barrel of a gun gained new force. And while Trump may have encouraged them, I would argue far right white nationalists began their latest killing spree in the Obama years with the 2009 killing at the U.S. Holocaust Museum.
3. Right-wing populism helps us understand racial scapegoating as immigrants, or blacks or Jews are blamed for economic failures that corporate management of the economy on behalf of the wealthiest create. Its adherents feel like victims, like they are losing power, whether we think so or not. Sometimes they are losing power. My former colleague Chip Berlet also argues that when right-wing populism nurtures conspiracies to explain capitalist failures, it does not grapple with those failures head on. Instead it creates arguments no more grounded in reality than Senator McCarthy's claim in 1950 that there were exactly 205 members of the Communist Party secretly subverting America in the U.S. State Department.
4. The far Right can be stopped when other parts of the Right or the demoralized center start opposing them. They should be encouraged to do so. Blacklists of course continued beyond McCarthy's fall and into Ike's presidency, but the senator's individual power was punctured in 1954 after he attacked the Army, and the Army's lawyer famously asked, after the senator smeared one of his young aides on national television, "Have you no sense of decency, sir? At long last, have you left no sense of decency?" So far Trump's corrosive bullying, dehumanization of migrants and people of color, and abuse of power and civic norms have not faced such a credible challenge from within his party.
5. The Far Right was actively made to be toxic and thrown out of polite company. While no moderate, William F. Buckley succeeded in sidelining virulent antisemitism on the Right in the 1950s to salvage conservatism as a force through his new National Review While anti-Semites did not have a platform in National Review, racists did and the magazine was vocally racist against African Americans and the rising civil rights movement until forced to use dog whistles by changing times to retain credibility. The rise of the internet and Fox News means the sidelining of the far Right by some conservative and more mainstream media is over.  Once again, we need to actively work to sideline Fox News and internet outlets that give a platform to the racist and conspiratorial right, whether through advertiser or vendor boycotts.
6. Virulent conspiratorial antisemitism of the type seen in the Pittsburgh massacre is rooted in a far right Christian view of Jews having demonic powers as the spawn of Satan. This can be secularized to Jews being the cause of all the crises dispossessing white people as they manipulate and control the world economy and fellow minorities in conspiracies that do not mention Satan. For white nationalists, we Jews are seen as the guiding power manipulating blacks, immigrants and the wave of Honduran migrants seek shelter in our country.
7. Popular-front politics bringing together unlikely allies are vital in standing up to and defeating the far right. The liberal-socialist-communist popular front of the 1930s was weakened by infighting as any cursory student of history knows. We have to set aside our snarkiness and learn to work in bigger coalitions without attacking those in the trenches with us. Maybe we will learn something. I discovered in my research the nonpartisan League of Women Voters and its Democratic and Republican women members was one of the few institutions to stand up to McCarthyism. Who are the unlikely allies of today?
8. We cannot take for granted that the democratic systems and norms we feel are insufficiently democratic will stand without our defense. When systems and governments don't work and lose legitimacy, strong-man, authoritarian solutions may seem attractive. Meanwhile, we activists get stuck in our trench warfare fighting to defend one single arena that is under siege. Or we don't even show up hoping the checks we send to support nonprofits or movements will be enough. Somehow, we need to fight on behalf of true democracy, economic, gender and racial justice for all, the climate and the common good all at the same time. We can do that by holding out our hands to all those in movement, creating the solidarity that both gives us hope and weaves together the future that will sustain us.

Abby Scher is a former co-editor of Dollars & Sense and a current board member. 

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