Full at http://blog.cheapmotelsandahotplate.org This is an interview with me
and Fred Magdoff
1. Mike Whitney---In your new book, "The ABCs of the Economic Crisis: What
Working People Need to Know", you allude to right wing think tanks, like the
Heritage Foundation and the American Enterprise Institute, which promote a
"free market" ideology. How successful have these organizations been in shaping
public attitudes about capitalism? Do you think that attitudes are beginning to
change now that people understand the role that Wall Street and the big banks
played in creating the crisis?
Michael Yates: Corporate America began to wage what turned out to be a
one-sided war against working people in the mid-to late-1970s, when it became
apparent that the post-World War Two "Golden Age" of U.S. capitalism was over.
As profit rates fell, businesses began to develop a strategy for restoring
them. This strategy had many prongs, and one of them was ideological, that is,
a struggle for "hearts and minds," to use a military term now being applied to
Afghanistan. The presumed failure of Keynesian economics, marked by the
simultaneous existence of escalating inflation and unemployment, gave the
ideological struggle its foundation. Maybe there had been too many restrictions
placed on the market, and these restrictions (minimum wages, health and safety
regulations, laws facilitating union organizing in labor markets; public
assistance in the form of money grants, housing subsidies, and the like;
restrictions on the flow of money internationally) had led to results opposite
those that liberal Keynesians had thought most likely. If these complex
arguments could be tied to simple cliches, like "get the government off our
backs," "the unions have gotten too powerful" (with always a hint that they are
too radical thrown into the argument), and "welfare queens" (with that always
popular whiff of racism), they could provide ideological cover for what was
really a matter of corporate economics, namely the making of money.
This ideological attack bore fruit quickly. President Carter appointed Paul
Volcker to chair the Federal Reserve Board of Governors, and Volcker, under the
guise of fighting inflation, immediately began to snuff the life out of working
class communities by forcing interest rates up to nearly 20 percent. Today,
Volcker is treated like a hero by Democrats and above reproach (though ignored
by President Obama’s more right-wing economic advisors), which shows just how
far to the right economic discourse has moved. What Carter began, Reagan
completed, firing the Air Traffic Controllers and putting the nail in labor’s
coffin. Behind the scenes in all of this and growing in strength for the next
twenty years (funded by wealthy business leaders) or so were the right-wing
think tanks you mention. Just as retired generals go to work for military
contractors and defeated politicians become lobbyists, government economic
advisors get jobs at Heritage or the American Enterprise Institute or the Cato
Institute. The staffs of these ideological centers churn out endless position
papers and studies, which find their way into our newspapers and the offices of
our congresspersons. A gigantic network of professors, journalists,
politicians, lobbyists, and, today, a television network (Fox) bombard us with
right-wing propaganda. That all of this has been successful is seen by the fact
that the shibboleths of neoliberalism—such as the needs for privatization of
public entities, the free reign of markets, the obviousness of the success of
welfare reform, the evils of raising the minimum wage—are all commonplaces
today.
While the public now knows that something is rotten, I am not sure that
neoliberal ideas are so under attack that they will lose their sway. I think
that the tenacity of these ideas owes something to the lack of an ideological
alternative, which, in turn, is due to the abject failure of organized labor to
provide one. For example, we need universal health care. Labor, however, has
not consistently argued in favor of this or supported it at all. Now Congress
is poised to enact healthcare legislation that might well be worse than the
profit-driven system we have all come to hate. Labor should refuse to support
this legislation, but I doubt it will. Then, when the new healthcare plans fail
to deliver the goods, the right-wing will be lying in wait, ready to pounce and
say, "See, we told you so. The government always makes things worse." In other
words, until there is a radical ideology to replace right-wing thinking, the
latter is unlikely to lose its drawing power.
Fred Magdoff: Although these institutions were very successful, along with a
number of other forces, in shaping public attitudes toward the economy, the
reality of the current severe economic conditions are causing many, including
some economists, to rethink their views of how "efficiently" markets function
in the real world (as opposed to their ideological make-believe world) and that
some different approaches may be needed. People seem to understand that the
"big players" played a major role in the crisis, but most of the anger has been
placed on the outrageous salaries of the top echelon. Of course, this is just
"chump change" compared to the massive amounts at that are transferred to the
wealthy through the speculative casino that our economy has become.
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