This blog post here, by Andrew Leonard, at Salon, is a good discussion of the most recent news that corporate profits soar, CEO’s take large pay hikes, and everybody else’s wages fall in inflation-adjusted term (fact is, the median weekly wage in late 2010 was almost the same as it was in early 2001–a lost decade, indeed). Leonard points out that we’re seeing here the exposure of “supply-side” economic’s complete intellectual bankruptcy, not that anybody seems interested in that obvious point in Washington, London or Brussels.
This graph below (courtesy of Mother Jones) pretty much tells the story of, to coin a phrase, “the road to serfdom”:
Leonard highlights an academic study by Shum, Khatiwada, McLaughlin and Palma at the Center of Labor Market Studies at Northeastern University, “The ‘Jobless and Wageless’ Recovery From the Great Recession of 2007- 2009,” that lays out the implications of this graph pretty starkly. The US economy has grown by more than half a trillion since the trough of the recession in the second quarter of 2009, but almost all of that growth has been captured by corporate profits. Despite productivity exploding (unions used to call this a “speed up”) and real wages falling, unemployment has remained high. Marx would consider this a feature of supply-side economics, not a bug, as it creates a large “suplus labor army of unemployed” to keep wages low. He also considered anyone who argued this was a fact of economic law rather than raw politics was a “vulgar economist.” I think we’d call them a CNBC analyst.
But Leonard is missing the point if he doesn’t think that the grifters who have been selling this story for more than a generation don’t know it’s a con. Thing is, economists–you know, real economists not guys who play economists on TV–have known since, oh about 1936, that supply side does not work for the population as a whole. It certainly does “work” for “high net-worth individuals” (note the latest euphemism for “rich”), which is why there is no shortage of Randians or Schumpeterians or Austrians or Austerians to support it. It might be delusional, but the pay is good.
As Krugthullu has been pointing out for some time, the delusional thinking is the point. Only the delusional are actually considered “serious people.” If data or standard economics models point to results that do not fit the neoliberal groupthink (we should call it its real name, ideology or dogma, but those terms have become stale due to constant misappropriation by the same groupthinkers who apply it only to “socialists” and “religious fundamentalists”), than it is simply “inconceivable.” As, I’ve mentioned in other posts, I think this is not “groupthink” but bullshit (deliberately constructed discourses that are unconcerned with truth claims in pursuit of greater power). Bullshit, is of course, much worse than falsehood, since the liar at least knows what the truth is but disregards it. Bullshitters could care less about truth or falsehood, as long as they achieve their goals. This explains quite a bit of why we are presently involved in a destruction of whole economies, allegedly to benefit their citizens’ welfare but actually to pay off bondholders, or shredding social welfare in conditions of high, cyclical unemployment. Yes, cut WIC but please continue to give billions to the most highly profitable corporations in the world. Foucault certainly understood this and thought that conservatives (“law and order types”) were actually the most likely to manipulate “discourses” in pursuit of power (and that this was actually the source of their power, especially if they were liberal intellectuals). But so did Havel (and unlike Foucault he was not interested in just truth-effects but actual truth, so he deplored it). In other words, the dominant economic discourse of our time (not the dominant economics of our time, let’s not confuse scholars with propagandists), is designed to obscure the fact that the workers of an advanced democratic capitalist state, indeed the global hegemon, have seen a systematic increase in their rate of exploitation. As more and more economic output has been diverted to the rentiers, and these very same rentiers capture the state in terms of massive corporate welfare (see the oil subsidies and rich guy tax breaks), it becomes imperative to obfuscate that fact.
Thus, supply side is hardly, contrary to Leonard, dead with a stake in its heart. Too many of its high priests will ape Communist apparatchiki and embody PoMo contempt for facts to keep vampire capitalism drinking the blood of the peasants. By the way, you are the peasants (but don’t think of reaching for torches and pitchforks, that might make you Greek, or something).