ECONOMICS: CHANGING THE CONVERSATION

Last Monday, I posted on a Mother Jones essay blasting Exxon for managing to avoid paying any income taxes for 2009--the substance of my own commentary was essentially that massive corporations are undertaxed, if anything, and that we ought to amend the tax code in order to get more corporate money into government coffers. My old pal Matt, who is an open minded moderate, gave me a link in comments to a CNN piece on what the top five US corporations paid for last year in taxes and why--it included a brief explanation, which was also included in the Mother Jones essay, of Exxon's rationale for why it was just fine that they paid the IRS nothing.

I think the point Matt was making is that it is a far more complicated picture than simply observing whether a corporation pays federal income taxes for a given year. That is, it's not necessarily a smoking gun when Exxon or GE gets away with a zero IRS bill. And he gets no argument from me on that. Generally speaking, tax laws are like a foreign language, from outer space or another galaxy, which an individual can study for years and still only have a partial understanding. And such corporations might not even be taking advantage of bad law, you know, loopholes, or foreign tax havens, and still end up not owing a cent. It could all be on the up and up, for all I know.

On the other hand, I'm not really so interested in these specifics as I am in trying to change the national conversation about economics. That is, for many years the ruling elite, their corporate counterparts, the talking sock puppets on television news gab shows, and their quietly pompous print brethren in the Wall Street Journal, the New York Times, and the Washington Post, have all assumed that if the business sector claims that it is overtaxed, or unduly burdened in any way by government action, then it must necessarily be true. I mean, an individual has always been able to argue against that assumption, but in this four decade era of go-go capitalism, he is the one making the argument, not the pro-capitalists who run the country.

In other words, the burden of proof has been, and continues to be, on the people making criticisms of capitalism. Generally, that burden has been so heavy that such criticisms are dismissed almost immediately, if they even make it into the conversation in the first place.

It's time for that to change. The pro-capitalists have got to start arguing their case again.

Events since the financial meltdown of 2008 have literally destroyed several of the foundational assumptions on which pro-capitalist apologists have been resting their petards for decades. The marvelous self-discipline of the free market, for instance, is now exposed as a sham. With it is gone the notion that government interference in the economy is virtually always counterproductive. And I'm not simply talking about the yammering class, and what they puke out for general public consumption. The field of economics, as an academic and scholarly discipline, is seemingly just as mired in its own mythology.

From last week's Bill Moyers Journal, a conversation about the massive fraud necessarily involved in the sub-prime mortgage crisis:

BILL MOYERS: So is this administration, which still has some Bush holdovers in it, and now has a lot of Goldman people in it, is this administration going to be able to pass judgment on Goldman Sachs?

WILLIAM K. BLACK Well, so far, they haven't been able to do it. They can't even get themselves to use the word fraud.

There's a huge part that is economic ideology. And neoclassical economists don't believe that fraud can exist. I mean, they just flat out -- the leading textbook in corporate law from law and economics perspective by Easterbrook and Fischel, says -- I'll get pretty close to exact quotation. "A rule against fraud is neither necessary nor particularly important." Right?

Notice how extreme that statement is. We don't need laws. We don't need an FBI. We don't need a justice department. We don't even need rules like the SEC. The markets cleanse themselves automatically and prevent all frauds. This is a spectacularly naïve thing. There is enormous ideological content. And it fits with class. And it fits with political contributions.

Watch or read the rest here.

And don't even get me started on how fucked up economists' assumption of "the rational consumer" is, especially when seen in light of the billions of dollars companies spend every year on advertising to ensure that consumers are not rational.

The point here is that, even though a lot, maybe even most, of the conventional wisdom on economics may very well be true, a lot of it is now obviously false, but pro-capitalist apologists insist on using the same rhetoric, and oftentimes the same discredited ideas, as usual. The conversation must change. It needs to reflect reality. Pro-capitalists have got to start making actual arguments again. They didn't win the day when Reagan came into office. Capitalism and neoliberalism are not triumphant. Criticisms of capitalism can no longer be summarily dismissed.

In short, it's time for a new national debate on the nature of economics, and, sadly, that doesn't appear to be happening anytime soon. Sadder still, if we don't have that new debate, we are very likely to end up in an even worse position than we are in now years down the road.

Anyway, back to Exxon and its zero tax bill. Like I said, it may be entirely legitimate. But given reality, they must explain why that's the case. And it needs to be a convincing explanation. It can no longer be assumed that they're playing fairly, or even that they know what they're doing, simply because they're smart businessmen. I mean, that worked well enough back in the Enron era, businessman-as-superhero and all that shit, but not today.

Today we must assume that if a business looks, smells, and tastes like dog shit, then it's probably dog shit. The business needs to show us why it's actually chocolate. Or something to that effect.

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