Should facts and successes matter in economics? Or politics?

October 10, 2021

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Best-selling author and scientist David Brin discusses politics and economics, making the case that if the right successfully plunges the country into feudalism, erasing 150 years of progress, the backlash will be the resurrection of Karl Marx. Read more from Brin at his website and blog.

Should facts and successes matter in economics? Or politics?

Courtesy of David Brin, Contrary Brin Blog

Sometimes the best "moderate" stance is to be radically moderate, and hence I may seem a bit intense this time. But the rigid stances taken by today’s entire- “right” and farthest*-“left” are both not-sane and un-American, violating a longstanding principle of yankee pragmatism that can be summarized:

“I am at-most 90% right and my foes (except confederates) are at most 99% wrong.” (The Confederacy was – and remains – 100% evil.)

That principle continues:

“Always a default should first be to listen, negotiate and learn… before reluctantly and temporarily concluding that I must smack down your foaming-rabid, hysterically unreasonable ass.”

And yes, my use of the “left/right” terminology is ironic, since adherents of that hoary-simplistic-stupid metaphor could not define “left” or “right” if their own lives depended on it!

Nowhere is this more valid than in the ‘dismal science’ of economics. Some things are proved: Adam Smith was wise and a good person, who pointed out that true cooperation and productive, positive-sum competition cannot thrive without each other, or the involvement of every empowered participant in an open society. The crux of Smithian liberalism was "stop wasting talent!" Every poor child who isn't lifted to an even playing field is a crime against BOTH any decent conscience AND any chance of truly competitive enterprise. Hence, "social programs" to uplift poor kids to a decent playing field are not "socialism." They are what any true believer in market competition… or decency… would demand.

Also proved: Keynsianism mostly works, when it is applied right, uplifting the working class and boosting money velocity, while its opposite – Supply Side/Thatcherism – was absolutely wrong, top to bottom and in every detail, without a single positive effect or outcome or successful prediction to its jibbering crazy credit. Again "Supply Side" is nothing but an incantation cult to excuse a return to feudalism. (I invite wagers!)

Competition is good and creative of prosperity, but only when cooperatively regulated and refereed, like in sports, to thwart the relentlessly inevitable human temptation for the rich and powerful to cheat! (Bet me on that, too. On my side is evidence from 99% of 6000 years of human history.)

If you’d like to Explore this non-left, non-right, non-dogmatic approach to using what actually works, getting the best from both competition and cooperation, you can do worse than start at the site that conveys the real Adam Smith. It shines light on how the rich and elites are often the very last people who should be trusted with capitalism!

Read the Evonomics site! For example: “Eight Reasons Why Inequality Ruins the Economy.” and “To Tackle Inequality, We Need to Start Talking About Where Wealth Comes From. The Thatcherite narrative on wealth creation has gone unchallenged for decades.”

Doubling down on tax cuts

The ability of cultists to double down on the blatantly disproved is now our greatest danger. As in this dazzlingly evil-stupid call for more tax cuts for the rich.

Oh, if only we had my 'disputations arenas" or some other top venue for challenging spell-weavers to back up their magical incantations with cash! This doubling (sextupling!)-down on Supply Side 'voodoo' promotes what is by now a true and proved psychosis. Utter refusal by the tightly-disciplined Republican political caste to face truth about their 40 years of huge, deca-trillion dollar experiments in priming the industrial pump at the top.

You need to hammer this. Not one major prediction made for that "theory" ever came true. Not one, ever.

No flood of investment in productive industry or R&D. (As Adam Smith described, the rich pour most of their tax largesse into passive rentier properties, stock buybacks, CEO packages, capital preservation, asset bubbles and now frippy "nonexistent" artworks, reducing available capital and driving down money velocity.)
No surge of economic activity, leading to tax revenue.
No erasure of debt. In fact, deficit curves reveal Democrats are always more fiscally prudent than Republicans, and that is always, always. (Escrow wager stakes on that, or admit you are dogmatist cowards.) Republican Congresses – the laziest in US history – have had one priority, to protect this vampire suck from America's carotid arteries.

In contrast, Keynsian interventions – when balanced by pay-downs in good times (e.g. Jerry Brown, Clinton, Newsom) – nearly always raise money velocity, investment, tax revenue, production and middle class health, while turning debt ratios downward. Oh, and doing something for our kids, like infrastructure, Earth-saving and social justice.

At risk of belaboring the point, let's be clear about two things:

1. While Keynesianism and Supply Side (SS) are in many ways opposites, both theories promised to 'stimulate' the economy enough to recoup a temporary tsunami of red ink. Moreover, if you combine all the SS tax cuts and largesse to aristocracy and corporations, you get a total stimulus that is similar in magnitude to the amounts progressives now wish to pour into the poor and middle classes. Hence, denunciations of Biden-Pelosi for 'fiscal imprudence' ring hollow.

2. Supply-Siders claimed their own multi-$trillion version of stimulus would encourage the rich to invest in R&D, domestic production and productive capital. Again, Adam Smith said the rich generally (with exceptions) don't do that. And they didn't. And they won't. An alternative tax-cutting approach that has worked, historically, would have incentivized those things with specific R&D, capital and domestic production tax breaks, as Democrats have successfully done, many times. But actual stimulus was never the underlying goal of Supply Side. In fact, its goal was achieved, in skyrocketing wealth disparities.

Am I a proponent of the other extreme's current cult incantation called "Modern Monetary Theory" – a spendthrift chant that debt never matters? Of course not. We are more advanced than our ancestors, not a different species!

But were Republicans sincere, they would say: "All right, our theory failed, top to bottom and in all ways, while Keynesianism has a track record at stimulating money velocity and building some useful things. Anyway, it's your turn. Let's try it your way."

I know several "economics pundits" who are very well aware of all this and admit it privately, but are terrified of their oligarchic masters. They do not dispute these facts, in private. They admit that the rich will have to go back to paying the legitimate shares that our parents in the Greatest Generation assigned to them, rates that correlated with the best growth and middle class health increases in the history of the human species.

And yet, they are paid to drag their feet and distract from our desperate need to send today's GOP to the showers. They do their job for oligarchy by distracting with endless denunciations of the Federal Reserve, shouting "Fed! Fed-Fed-Fed!" Or… "squirrel!"

The longer we put off the Great Reset, back to the Greatest Generation's successful social contract — that stymied Marx by co-opting the workers into a rising middle class — the angrier will be the ensuing middle class and working class demands, and the more the right will succeed at what seems to be their main project… resuscitating Marx from the grave and setting his scenarios back in motion.