Saturday, July 11, 2009

Get Ready for the Kooky Ideas

Because here they come. A veritable flood. Certain to be dismissed initially. But some, like Sarah Palin, will gain traction.

Right now we (the collective 'we') have framed up our economic, political and social issues with a shared set of assumptions that are themselves becoming a casualty of the current unpleasantness. A mainstream articulation of that framework can be found in the Larry Summers interview in today's Financial Times. From one flank a more offbeat expression is offered by Nouriel Roubini on a very regular basis. On Summer's other flank, (if any still survive) can be found the pollyannish house economists of various organs and organizations promoting real estate purchases and equity investment (current faves, 'this is a stock picker's market', and 'buy and hold is a dead strategy'). Up above, from the academic highground, Krugman lobs his contributions down on us (to his credit, asking rhetorically last week who defines this framework and why there are 'unpersons').

But, the framework exists. And it exists for good reason. Nobody wants to have to listen to the kooks who think there is a pill that can turn water into gasoline, or who believe they've invented a perpetual motion machine (the call for economic salvation through a War on Global Warming comes close to these, IMHO, but it enjoys bizarre credibility that I personally chalk to the need even in a secular society for public demonstrations of faith).

I think the framework may be about to shred, in part because it's losing its objective utility, and in part because the participants are losing their faith in it. On the one hand, it may be possible to salvage the intellectual fabric and construct a workable, if makeshift set of policy responses using the salvage. On the other, it may be time to put the 'political' back into 'political economics'. And if that's the case, the current lineup and the current teams need to be recast.

"Paging Dr. Reich? This is central casting. Governor Palin would like to meet with you. We know you've heard of her, and are probably skeptical, but she's an empty headed vessel just waiting to be filled. You be da guy."

Personally, I've immunized myself (more or less) to all this by spending the last few months reading the Cantos of Ezra Pound. Pound was a guy who gave kooky economic theories the full monty. (Other kooky theories, as well--notably, anti-semiticism). He fell for a guy named Clifford Douglas, who was sort of an unhousebroken Hyman Minsky. Yes, folks, when it's broke it gets a great deal more baroque that H.M.

And EP ended up under indictment for the capital crime of treason, finally going over the edge sitting in a prison cell near that of a fellow named Till (who was one day led from his cell and hanged for 'murder with all the trimmings'). That Till was the father of the Emmet Till who was murdered in a racist incident in the mid-50s that contributed mightily to the emergence of the Civil Rights movement (and whose coffin is currently playing a bit part in a rather lurid bit of graveyard crime in Chicago).

You can immunize yourself however you want to. Just don't go deaf to reason listening to the siren songs of Bristol Bay.