The New York Times > Opinion > Op-Ed Columnist: Bush's Own Goal

Krugman here on the prisoners of the american dream and the way Bush capitalizes on this in his skewed tax plan and his neo-liberal phantasy of an "ownership society:"

"The political problem with a policy favoring investment returns over wages is that a vast majority of Americans derive their income primarily from wages, and that the bulk of investment income goes to a small elite. How, then, can such a policy be sold? By promising that everyone can join the elite. "

Certainly this is obviously the tactic being used by the Bush, borrowed wholesale by the neoliberals that populate his silly little circle of performative economists. There is a local connection here at GMU, at least to the theory behind his seemingly beautiful "ownership soctiety" wherein, as Bush says, "I understand if you own something, you have a vital stake in the future of America." The Institute for Humane Studies here at GMU has its own version of this oversimplified illumination of the neo-classical economists, involving cute fuzzy bunnies--which, of course, is something no one should be afraid of, right? The idea, as with Bush's logic, is that people will only keep from squandering natural resources if they are allowed to own them. In the game, you are invited (along with two computerized rival poachers) to play two versions, the first where the bunnies are held in common by the public, the second when they are privately owned.

In the first version, the round only ends when all of the bunnies are gone, thus it is over very quickly and it is in your interest to kill as many as you can b/c if you don't someone else will. And, of course, there are no other social or political factors involved that might restrain you from taking as many as you can.

In the second version, you own a certain number of bunnies. There is not an explanation of how you came to own them or who you might have dispossessed of bunnies in order to do so. You just own them and are invited to see how much better the game goes when you have the incentive to not kill all the bunnies you own because then they will reproduce and you will have an unbelievable bounty of bunnies since each year the remaining bunnies you have will all reproduce (b/c they're bunnies).

In classic classical logic, there is no discussion of how this will play out if you are competing in the sale of your bunnies with a massive corporation who has bought out all of the other bunny owners, has bought up much of the land and is colluding with the mortgage company you have paid for your high-tech bunny raising equipment (which must be used in order to raise the bunnies they want on our modern market). The giant bunny corporation has the power to flood the market or otherwise control the bunny market so that you are pretty much forced to either sell all your bunnies to them or to work for them in some capacity, ending rather quickly, the little utopia of the "ownership society" since, in fact, only a handful of major bunny production corporations control the entry into the market. There is no way for consumers to effectively control this via the elegant and useless mechanism of supply and demand b/c if they want bunnies, there are very few choices and, besides, they only want name brand bunnies anyway because that's what they see on TV. It is, indeed, a fantastic society for the people who are owners; it would just be nice if there were a few more of them. Unfortunately, in such an ownership society, the only role for government is to make sure that the owners qua owners are never threatened. If you used to be an owner, that's your problem and it is your own fault that you sold out and now have to work for Bugs Inc. or whatever the name of that corporation is. And if you had tried, at any point, to join together with the other bunny raisers and keep your culture and lifestyle from being destroyed, you probably would have been branded socialists and, ironically, as enemies of the "ownership society" despite the fact that you were the original owners.

But at least the neo-classical dimwits have a simple way of telling you what you should believe. Along these lines, here is a final "money" quote from Krugmann about the still not dead plan of privatizing social security:

Social Security is, basically, a system in which each generation pays for the previous generation's retirement. If the payroll taxes of younger workers are diverted into private accounts, there will be a gaping financial hole: who will pay benefits to older Americans, who have spent their working lives paying into the current system? Unless you have a way to fill that multitrillion-dollar hole, privatization is an empty slogan, not a real proposal.

In 2001, Mr. Bush's handpicked commission on Social Security was unable to agree on a plan to create private accounts because there was no way to make the arithmetic work. Undaunted, this year the Bush campaign once again insists that privatization will lead to a "permanently strengthened Social Security system, without changing benefits for those now in or near retirement, and without raising payroll taxes on workers." In other words, 2 - 1 = 4.

My favorite part, of course, is the Orwellian reference "2-1=4." The problem is really that these people would like to be able to sum up everything with an equation. As teleological as my own little description is, they would really like to believe that all of economic life can be described in this way. Maybe someday we will be able to, but before that is possible, people should know the likely outcome of their choices over the long term and that is something about which, save the imperative that people save for the future, this economic theory doesn't bother itself.