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Tue Jun 26, 2012, 11:34 PM

Neo-liberalism has failed but we still don’t get it

For the few left behind...

Neo-liberalism has failed but we still don’t get it
by Bill Mitchell

One of the puzzles that accompany this gruelling economic crisis is why neo-liberal economic thinking, which when applied caused the crisis and has delivered very little to so many, remains the dominant paradigm in economic policy making and has managed to turn a disaster for practitioners of that ideology into a triumph. How is it that the leading voices now are preaching exactly the same policies that caused the crisis as the solution to the crisis. Is there that much asymmetry? I noted a recent comment on my blog (Tom) that raised issues relating to the philosophy of science along the lines of how are we to judge whether the mainstream macroeconomics paradigm has failed. I understand the demarcation issues involved and the problems of “truth testing”. But we can take a more simple approach to the question. Here are two ways we know that the mainstream approach failed – they didn’t have a clue what was happening in the years leading up to the crisis and now they are scrambling in a stunned state to add banks and financial markets to their defective models. The problem is that they are just building more defective approaches. But the continued dominance demonstrates that their failures are not yet fully understood.

False claims

Prior to the crisis, the mainstream economics profession boasted how they had solved the business cycle by implementing inflation targetting-type policies and pursuing fiscal austerity. This was the narrative of the late 1990s and early 2000s.

The mainstream macroeconomists increasingly tried to claim in the 1990s and up until the recent crisis that they had “won” – been vindicated and those stupid Keynesians would never see the light of day again. They claimed that Keynesian policies had failed and vindicated their view that self-regulating markets would deliver the maximum prosperity for all of us.

It was government that was to blame for any economic ills – unemployment (excessive minimum wages, etc); poverty (welfare reliance); inflation (ill-disciplined central banks and treasuries) – and so the solution was to reduce the role of government in the economy.

read more: http://bilbo.economicoutlook.net/blog/?p=19990

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Reply Neo-liberalism has failed but we still don’t get it (Original post)
girl gone mad Jun 2012 OP
Scootaloo Jun 2012 #1
clang1 Jun 2012 #4
Warpy Jun 2012 #2
clang1 Jun 2012 #5
DeSwiss Jun 2012 #3
limpyhobbler Jun 2012 #6
William deB. Mills Jun 2012 #7
Red Aegis Sep 2012 #8
mother earth Sep 2012 #9
MWM958 Sep 2012 #10

Response to girl gone mad (Original post)

Tue Jun 26, 2012, 11:43 PM

1. Because it's not about us.

The people who promugate this shit are the people who PROFIT from it. The economists, the politicians, the disaster capitalists. They're raking in money hand over fist, so for them it's still a pretty good idea. That it screws everyone else just isn't even a consideration; one and all these are Randian Supermen, who do not even consider the phrase "public good" in anything they do.

And it will stay this way, and it will get worse until we - the people - stop pretending that "stuff" is sacred.

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Response to Scootaloo (Reply #1)

Wed Jun 27, 2012, 12:08 AM

4. +1000 Yep....


Either they decide or we decide. Though either way SOMEONE is going to decide. PERIOD.

They have already made their decisons and are on their course. The people are not on course. It is that simple. ALL of this is history even and here we are. Now people need to pick sides. There is no choice in this either. It is one side or the other. And what people need to understand is that their choice today is going to affect the choices of others after them...It is is all pretty simple. The hard part is knowing that there are choices that need to be made.

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Response to girl gone mad (Original post)

Tue Jun 26, 2012, 11:46 PM

2. We get it, we just don't count.

The PTB will continue to slap bandaids on it for the foreseeable future, trying to keep an unfair and unsustainable system going as long as possible because they think they'll be able to grab and run. What they don't get is that when it finally falls apart, there won't be anyplace to run to. It's going to take everything with it and it will be planet wide.

There is little way for ordinary people to prepare for this except by accumulating skill sets that can be bartered short term.

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Response to Warpy (Reply #2)

Wed Jun 27, 2012, 12:23 AM

5. Everyone counts except those who decide not to...


and in my opinion those people are doomed to their fates anyway. Why follow them?

This is what people need to understand about this as well: Everyone counts one way or the other.

We are all in this together. It does not matter your skin color, or even your religion.

People need to understand that. They don't care about your color or your specific religion. That is not what all of this is about. People should heed this, because it is what divides people against them. They are more powerful then. It's just the world. The way that it works. Right now, and just like it has for the remainder of our history. Now we are just a little smarter is all, and we have more tools. So we can fight it. If people choose to do so. The difficulty people are facing today is that they don't understand that they need to make a choice now. Fight it, or stand by. The otherside has already made their choices. Why is all this so difficult for people to SEE?

It's all right there, right in front of EVERYONE. Plain as day. So people can either do something, or not. Their choice. I think our responsibility is to tell people they have a choice to make. Then we either have people that help us, or they don't. Again, all very simple.

Do you want it all to be up to you? Or to them? Because one way or the other, more change WILL come. Period. It can either be good change, or bad. That's people's choices.
In my opinion if people need to have this explained to them, we should try to do so. We can only make friends or not. Simple.

It is ALL up to you PEOPLE. Understand this please. And if you have read what I've said, these are things that many of Us already do. I made my choice a long time ago. So have many of you.

NONE if this should be news to you. NONE of it. We need all of the friends that we can get in this. It is time for people to see past their own noses. We need all the help that we can get. This is how I look at all of this, and so do a lot of other educated people. Other people are saying the same things, you just have to listen to them.

It's up to you people.

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Response to girl gone mad (Original post)

Wed Jun 27, 2012, 09:30 AM

7. Education

The details of economics are tough - even economists frequently miss the boat, though ex-regulator William Black and Nobel economist Joseph Stiglitz are exceptions. But some core issues seem pretty obvious:

1. the New Deal was the Great Compromise - the super-rich were allowed to retain their wealth and most of their privileges in return for sufficient government control to make it possible for everyone else also to make progress;

2. over the last generation this Great Compromise has been rejected by the new crowd of super-rich;

3. it is not about the size of government but what it does - government gave us the Depression by not regulating, gave us the New Deal, and then again--by not regulating--gave us the Recession of 2008.

Unfortunately, I don't get the feeling that most Americans have any idea at all any more about any of the above.

Somebody please tell me why this is so hard for people to figure out.

FYI, for those who may want to read about all this, see Stiglitz, Freefall, and Naomi Klein, Shock Doctrine.

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Response to William deB. Mills (Reply #7)

Thu Sep 6, 2012, 04:46 PM

8. Shock Doctrine


If you would like to go a little further than Klein then I can tell you another point of view. If you are interested just post a thread.


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Response to William deB. Mills (Reply #7)

Sat Sep 8, 2012, 08:09 AM

9. I don't think most Americans really do understand what's taken place, or the whys.

I think those who do understand must educate, your points are excellent & I've long been a fan of Naomi Klein, she's incredible!

Welcome to DU, hope you expand upon these points here. People read & lurk & what is posted here matters, esp. in these times, everything matters.

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Response to girl gone mad (Original post)

Sat Sep 8, 2012, 11:02 AM

10. but...

the free market always succeeds! except when it doesn't. then it's the government's fault.

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