Monday, November 18, 2013
In a post called "Secular Stagnation", PK Rugman states on his blog, "The Nonsense of a Gliberal", where he dumps all the News unfit to Print, that ""unproductive spending is still better than nothing".
Welcome to the New Economy, where cash is now only completely arbitrary, no longer a store of value, its value will be dictated by the all-powerful market. Supply and demand are no longer the forces that drive the market, but the market itself. In the new world economy, where labor is done by robots and Smart cars are driven by dumbed-down citizens, supply-side economix decides what is built and marketed, and instead of saving, you'll already be in hock to the factory that "They" decided to build to make the supply of whatever "They" decided you need. Because when "unproductive spending is still better than nothing" is a philosophy of one of the most quoted writers of the pseudo-science of ecomonix, then all sanity has left the building.
Since unproductive spending is what toppled the global economy into the morass of what PK himself calls a permanent slump and intractable world depression, then continued unproductive spending, because it, unsurprisingly, produces an unproductive economy, propels us further and further away from producing that which any economy is supposed to produce: the goods and services needed by the human beings that are its creators. And the longer it goes on, no one has anything remotely resembling savings, as an ever greater percentage of them get confiscated by the banks and then get poured into PK's unproductive spending trough, where, as any economix wizard worthy of his wand knows, bad money chases out good.
In fact, stating that savings hurts the economy (note there is always only one, it is "The" economy), PK continues to grovel at Larry's feet in an uncomfortably embarrassing display of professional ass-licking:
"Larry also indirectly states an important corollary: this isn't just true of public spending. Private spending that is wholly or partially wasteful is also a good thing, unless it somehow stores up trouble for the future. That last bit is an important qualification. But suppose that U.S. corporations, which are currently sitting on a huge hoard of cash, were somehow to become convinced that it would be a great idea to fit out all their employees as cyborgs, with Google Glass and smart wristwatches everywhere. And suppose that three years later they realized that there wasn't really much payoff to all that spending. Nonetheless, the resulting investment boom would have given us several years of much higher employment, with no real waste, since the resources employed would otherwise have been idle."
Yeah, good ole pal Larry, the Summer's Eve douchebag of the economix profession, where resources, none more so than human Resources, are just so much fodder to be fed to the maw of "The" economy, cogs to be "fitted out" by their employers, the only real 'people' who matter in all this falderal. Because that 's all it's about. The assumption, together with the completely erroneous one that sovereign debt won't be defaulted on, is that what's good for GM, now Walmart, is good for the country, even though the GM of the country pays wages so unable to support human life it must be subsidized by the government via foodstamps, healthcare and welfare payments in order for the largest employer in the country's workers to survive to come to work the next day, hasn't been supplanted in the minds of the people or the economic profession. This is the fruit of the corrupt seed of militarism that has taken over the economy. While venomously condemning Keynesian economics, the right just as vociferously, lauds any and all military outlays, which, not being used to create products useful to the citizens whose funds are funneled away from productivity to stimulation without marketplace feedback, amounts to Military Keynesinaism, but is even more pork-ridden and unaccountable than the unmilitary kind.
How this is harmful is illustrated by the so-called Hummer. We built it and they will come. But whereas PK seems to think that things get built by magic, they don't. To build this monstrosity of a vehicle took such an investment in plant and material that, GM figured, let's see if we can pawn this multi-ton military transport vehicle to the war-mongering public (who, unlike the military, doesn't have taxpayers' pockets to dig into to pay the insurance and fuel costs, so we'll downplay that aspect of it), because then all the R&D costs'll be paid for by the taxpayer, and we skim all the profits for the 'private' sector.
This is an old story, but the difference is that in the old days, GM, because of unions, was forced to provide amenities to its employees, such as, ya know, wages, that then get used to buy other items and stimulate the economy and increases the velocity of money. But with Creditism,Walmart's business model, which is now dominant, simply makes no provision for viable wages. Its very structure demands a work force of replaceable cogs with no resources left over to cover any demands for anything extraneous to their employment (like nasty kids to feed). Because gone are the days when people's cash is able to have a choice of allocation, whether into savings to wait until such time until something actually worth purchasing becomes available, or into items they decide they need or can afford to buy.
Because without unions, or at least without some method of employees to pressure management to share the earnings of the corporation with its workers instead of with the Hoarding community, otherwise know as "The Rich", those shareholders who do nothing for the company but drain its cash in the forms of dividends, that they pay half the taxes on than the workers whose Labor creates the value the shareholders cash in on, yet gets taxed at twice the rate, the new paradigm of Corporate bosses deciding what you want and presenting it as fait accompli without so much as market research becomes the new normal. Businesses or the Federal Government want it, so we'll build it and then offer it to the hapless consumer, having withdrawn those things he really could use from the shelf.
When that something is a water supply or electricity that pretty much everybody needs and wants, is one thing, but when it's used instead to develop Hummers and HDTV, for example, because that 's what Corporations want (you can read those screens a LOT better, (and Wall St. has banks of them),so much so that, as perhaps you've noticed if you don't have one, the subtitles get smaller and smaller until they become illegible without an HDTV), then the fact that it's decided without input to its TRUE costs (which are invariably hidden: such is how Capitalism works, my friend) forces the supply onto the consumer to buy or save his paltry pay in an account at the bank where it will dwindle, by nature and intent of Feral (sic) Reserve policy, instead pushing you to use credit to pay for it instead.
This is Creditism, not Capitalism. When the Chinese opened their economy to market Forces the West rejoiced, but Communism didn't fall, it became more corrupt and intractable, albeit with some Capitalist trappings. And the same has happened here, as Capitalism hasn't fallen, it's just become more corrupt and intransigent and taken on the Central Planning ways of Communism, which are more in line with the New Supply-side Economic mandates of Creditism which are unresponsive to any forces in the actual economy except the brutish rich and their entrenched bureaucratic acolytes. So now, even liberal economists tell you that savings is Bad (Orwellian enough for you?) and "unproductive spending is still better than nothing". With such a mindset, the entire nation, indeed the world, follows the logic of the Clothing clerk in "Sunset Boulevard", who, when Gloria Swanson's paramour is shopping for a new coat, asks him in his best unctuous salesman's voice, "Why not get the Vicuna? As long as the lady is paying anyway". This is the PK logic, so what if all the vicunas will be wiped out, it created employment for a week or two that we can point to and say , "See? Our policies are creating jobs."
In other words PK has simply capitulated and, as Kevin Phillips accused journalists of in a 2002 New York Review of Books critique, instead of comforting the afflicted and afflicting the comfortable, he now comforts the comfortable and afflicts the afflicted: rather than say anything that might anger his Corporate Bosses, he lazily licks their asses and no longer even bothers to ask if they wipe first.
Posted by Robert Lowrey at 4:20 PM