New Krugman:
So now the deficit scolds have a new case to misinterpret. Never mind the repeated failure of the predicted U.S. fiscal crisis to materialize, the sharp fall in predicted U.S. debt levels and the way much of the research the scolds used to justify their scolding has been discredited; let’s obsess about municipal budgets and public pension obligations!
Or, actually, let’s not.
And
Detroit does seem to have had especially bad governance, but for the most part the city was just an innocent victim of market forces.
What? Market forces have victims? Of course they do. After all, free-market enthusiasts love to quote Joseph Schumpeter about the inevitability of “creative destruction” — but they and their audiences invariably picture themselves as being the creative destroyers, not the creatively destroyed. Well, guess what: Someone always ends up being the modern equivalent of a buggy-whip producer, and it might be you.
Sometimes the losers from economic change are individuals whose skills have become redundant; sometimes they’re companies, serving a market niche that no longer exists; and sometimes they’re whole cities that lose their place in the economic ecosystem. Decline happens.
More here.
Among the multiple good points Krugman makes in this essay, there are two that are absolutely necessary for understanding the way the world works.
The first point is that capitalism's apologists are totally willing to lie through their teeth in defense of the economic system which has made them rich. I mean, to dumb down Detroit's fiscal crisis to being simply a matter of pension funding is to completely ignore the longstanding travails afflicting the city. Really, the bottom line with Motown is that the auto industry made it grow big until the 1960s; the auto industry's exit starting in the 1970s left the town without jobs, which means fewer citizens, which means a shrunken tax base. An underfunded pension fund is clearly a symptom, not the cause. Pretty simple. And widely known: the original Sim City game back in the 90s includes a Detroit scenario that is not winnable. So it's common knowledge. That means these pension critics are lying. That's what the professional pro-capitalists do. They lie about capitalism.
The second point is that, if we're going to do capitalism, we have to acknowledge that people, LOTS of people, do everything they're supposed to do, work hard, save, educate themselves, and they still get screwed. Indeed, this is how capitalism works. Marx called it "creative destruction." The flip side, of course, is that when some people get screwed, other opportunities open up elsewhere, for other work. Ideally. But we just don't have a labor force that can be as mobile as capitalism is, nor one flexible enough to throw entire careers down the toilet in order to embrace new careers. So people necessarily suffer as the economy, in theory, progresses overall. Do we really, as a civilization, want to say "tough shit" to these people? Because that's what we do. We say "go get a new job" when there are no new jobs that are realistically available. We say "go back to school" to people who don't have the ability, or even a real motivation, to do so. Tough shit. Some civilization.
You know, for all my problems with capitalism, I still tend to believe that, with a lot of help from the government, it's still probably the least bad way to approach the economy. But when you have one of the major political parties embracing "government is the problem," it is impossible to have a capitalism that isn't straight-up evil. Hell, lots of Democrats are on board with evil capitalism, too. So that's what we have. Evil capitalism.
And I really don't see that changing anytime soon.
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