Neoliberal economics is a superstitious, secular, totalitarian religion. It's past due time to nail some theses to the doors of Central Banks. It's all based in rules, and rules can change.
Yep, all it takes is a twist of the dials they control to make things rational again.
They used those dials to keep us losing, thinking that's the best way to control us.
But I feel like a new faction of the wealthy may realize the popularity of cutting out the middle men that steal from both sides while producing nothing.
I think you totally nailed it with the free market becoming a religion. You stay within economics or what use to be called political economy, but it's even more existential. As science has discredited the mythologies or religion it hasn't replaced the meaning and purpose of life given by religion, and since most people want some sort of higher purpose ideology, they have, without really knowing it, replaced religion with the endless pursuit of money, which might even work at least for a while if people were actually getting wealthier, and the "religion" behind that concept is the "free market".
Keynes actually said that what people want is religion.
I am not religious, but it’s clear to me that the literal actions that Christ calls for in the Bible - for the rich to forgive debts to the poor - are not metaphors.
The rigidity of institutions in asserting that there is no other option means people think that nothing can be done and collapse, conflict and catastrophe are the only possible result, when debt restructuring is viable and effective.
I read and enjoyed your take on Jesus' teachings about debt relief. Years ago when I read the gospels I too was struck by how different they seemed if you just took them literally, especially the parts where people address him a god and Jesus basically
replies, "You said it, not me,".
I too am not religious. Sometimes, however, I think that a modern religion is going to be necessary to provide some sort of moral framework for a society that alternates between morality tales written in the bronze age and a moral structure based around ever increasing consumption and "the free market ideology".
"I read and enjoyed your take on Jesus' teachings about debt relief."
Until relatively recently, all three of the world's major religions forbade interest-based debt. The Catholic Church used to declare a "debt holiday" every 50 years, where all debts were declared invalid.
Can you imagine the havoc a "debt holiday" would create in today's economy?
Reminds me of a joke.
A well-to-do looking gentleman walks into a small town hotel, puts a $100 bill on the counter, and asks for a room.
The hotel owner quickly went to the grocer where he got food for his restaurant, and used the $100 to repay the debt he had for his food bill. The grocer went to his mechanic, and gave him the $100 for repairs made to his delivery van. The mechanic fave the $100 to a hooker who had "loaned" her services to him. And the hooker went to the hotel and put the $100 bill on the counter to pay for her use of a room.
The gentleman stranger came back with the key, saying, "The room is not to my liking", and took the $100 bill off the counter and left.
Everyone is out of debt! What just happened here? Can't we do that with the greater economy?
Here's a hint: those loaning the money are not the ones holding the debt.
But if Jeff Bezos or Elon Musk come into your village seeking a room, take his money quickly and offer him the crappiest room you have. :-)
Debt-relief today is exactly what is required, but it is different than the scenario you present.
For example, debt restructuring focus on personal debt, not business debt, because businesses have the capacity to generate ongoing revenue. A house that you live in does not.
The example you involves business transactions, and that is an important difference. That also don’t have interest attached.
Most outstanding debt is accrued debt.
In the case of modern mortgage debt, banks extend credit against an asset. They are not taking money from deposits or reserves. They create an IOU, and create money in the account of the borrower. That money is repaid with interest, so that the total repayment may be twice what was borrowed. In fact, a lot of debt today is just accrued interest.
Restructuring mortgages downward is one way to achieve it.
There is another way of looking at your example.
Someone borrows $100 and lends it to someone, who promises to invest it. They lend it to someone, who promises to invest it. They lend it, with a promise to invest it, and so on. They are all charging interest, so that 5 people have loaned money. The last person invests it, as promised, but the investment doesn’t pay off, and they lose everything.
That lost $100 leaves well over $500 in debt, with interest going up on all of them, and there’s no money to pay the bill.
If the person who loses the $100, and starts the repayment, it won’t clear the bills. That’s why debt restructuring matters.
And yet, "debt restructuring" doesn't touch the elites who are sitting on top of the pile.
I have a better solution: impose negative inflation. Each year, the value of your savings goes down.
People who must live hand-to-mouth won't notice a difference. People who have amassed wealth will hurt the most. Those in-between will be incented to keep their money flowing.
Nice, but it's hard to see how anything changes until our ship hits an iceberg.
My personal plan is tools, skills and friends.
Years ago, part way into the first Trump administration, i thpought i had an insight about this while dumping off my trash one day. Wrote about that here:
You're right. The "free market" in the 1800s that people were trying to achieve was not about freedom from democratically elected government.
What was keeping the market from being free was the "overhead" on the economy of paying for an inherited aristocracy that owned for a living and lived on interest and rents.
Some 7,000 years ago, at several locations on the planet, some clever hairless monkeys learned how to grow grain.
Prior to that time, without refrigeration, food lasted no more than a year or so. For the first time in human history, grain agriculture gave us the ability to hoard and withhold food. Granary receipts are arguably the first form of money. This created social stratification, hierarchy, and rich and poor.
"[Ishmael] There's only one way you can force people to accept an intolerable lifestyle. [Julie] Yea. You have to lock up the food." — Daniel Quinn, The Teachings That Came Before & After Ishmael p181, excerpted from My Ishmael, A Sequel, date: 1997-01-01, link: https://archive.org/details/isbn_9781502356154/page/181
With respect, I think this is an incomplete reading of history. The development of domesticated agriculture resulted in more reliable food production and energy to support the population. The flip side of a revolutionary change in better access to food that a community comes to depend on, the potential for crop failures due to disease, disaster, or mismanagement are extistential for the community. Understanding cycles of seasons, calendars, astronomy, building pyramids aligned with cardinal directions, stone circles, are about establishing calendars to orient themselves to growing seasons. In the Roman Empire, the only crime that had the death penalty was messing around with granaries, because mucking up could result in hunger, starvation, riots, and death. There was a Roman God of rust, which is a fungal disease of grain.
There are rules, law, order and structures that are self-serving, and there are also rules and structures that are established after a disaster, in order to prevent one. Just as today, there are rules and laws that are unjust or unjustly enforced, and there are rules and laws that are there to prevent disaster.
Agree with your sharp analysis. Thanks. You might find the Powell Doctrine memo interesting. It was a plan written by Louis Powell, funded by corporate interests, that created the Cato Institute, Hoover Institute, the Federalist Society and paved the way for Reagan’s election. It was in response to the successful 60’s movements ( anti-war, environment, civil rights, women’s rights, consumer protection, progressive taxing…). The empire struck back.
Great analysis, I've been following MMT ideas for a while now, and the whole neolib thing is really frustrating. I also believe that the words we use matter, in particular we treat "money" and "wealth" as synonymous, and we talk about rich people "making money" (e.g. "he made his money in property").
For example,a farmer creates wealth by using seeds, land, skill & labour to feed a population. His income may be high or low depending on many other factors, but charging high prices doesn't create more wealth, even though he may be described as more "wealthy". We may also say he's "made a lot of money", except he hasn't. He can't , only the govt "makes" money. He's accumulated money, and become rich.
A money-market trader can accumulate a lot of money, but creates no wealth, he's just a lucky gambler.
When we talk about people being wealthy and making money, we reinforce the idea that getting rich creates wealth, and that people who do this produce the money that society needs. Which is of course the opposite of reality.
Another word that annoys me is "earn". Does a CEO "earn" a $5 million bonus for manipulating the share price? Probably not, but an Amazon packer definitely earns their minimum wage (and more).
In my view "earn" should only apply to remuneration for activity that creates real wealth, not for manipulating money.
Yes. It's the difference between the real, productive economy where people trade money for value, creating jobs and turning work and capital into output, and an economy where people may be money-takers and job destroyers all at once.
This distinction was widely acknowledged and understood by the Classical economists and labelled as such in the categories of earned and unearned income. The distinction was “lost” (I increasingly believe purposefully obscured) during “the marginal revolution” which led to the neoclassical orthodoxy which still holds sway in the economics academy today (having survived Keynes by bastardizing him in the synthesis which led to New Keynesianism).
Amazing write up. Tired of the bleeding.... no rights to self defence. No matter how much one is bleeding out. Whole thing is rigged. Love the work. Keep it up!
Great essay!! “A little knowledge”describes me…but having read your essay I have more….saved so I can read again. I’m sure you’re aware The Old Testament had a formal debt Jubilee system every 50 years.
The MMT Modern Monetary Theory debate is one that needs to be discussed. I would frame it as a case of Observational Science vrs Empirical science. MMT proponents have historically valid examples, but critics claim that they are invalid and lack empirical evidence.
The critics are throwing stones from their glass verandas. MMT is not complete, but I think the point I made about science vs a set of rules explains the mindset.
In fact, I think this explains the entire communications conflict.
Orthodox Macroeconomics is a set of rules. It is prescriptive. It says both "this is how we should understand the economy, and this is what we must all do." It is an ideology,
The orthodox critics of MMT always get it wrong, but how they do so is important, because it's the same way. They are used to thinking of their own economics as rules. So they assume that MMT is a set of rules to follow. The rules conflict with their own, so they reject it.
MMT Is not a set of rules. It describes what is happening based on evidence in facts, in ways that contradict the fact-free assumptions of orthodox theory.
Unfortunately we are not as skilled and well funded as the billionaires. What to do? I’m on the library waiting list for Alex Himelfarb’s book on this. But at least a dozen books have been published already. All the young people I know are beyond reach and controlled by Joe Rogan.
Thank you for this. Excellent clear eyed analysis and long overdue reassessment. Hopefully we can wake up and see the reality. We have been so far removed from it to confuse and manipulate us. And we cling to our ignorance -- the ignorance that is as stifling as it is deadly.
Another great explainer, thanks for this. Economics continues to be complex for all - including politicians. It may be useful to suggest government policy ideas that would start to address this historic problem. Given economic cycles and what tends to historically create change - or at least disrupt the cycle of neoliberalism, society may be running out of time. Disparity is significant and growing. This historically leads to social unrest or worse. And, our environment continues to change with troubling weather events. It’s critical to simplify this economic thing down to the impact on everyday life and what policies would start to have a positive impact for households. And, few understand the role of the central bank- including politicians.
A fairly accurate overview except for severe political biases and poor understanding of the competing mainstream economic philosophies.
Neoliberal = a new version of liberal economics - to term it conservative is nonsense.
Neoconservative economics is libertarianism.
Neoconservative politicians focus on foreign policy - i.e. wars and defense spending while cleaving far more closely to neoliberal economics than libertarian views.
It is also wrong to ascribe inflation solely or even primarily to monopolies. There is a source of inflation: sanctions on Russia - the largest wheat exporter, one of the largest fertilizer exporters, a huge energy exporter of all forms of fossil fuels and the largest or a major exporter in a wide range of other commodities.
Even on the corporate monopoly/monopsony/oligopoly side, the implied lack of basis behind their price increases is also false. Have we forgotten the supply chain effects of the COVID lockdowns? What about the whipsaw in interest rates and Federal Reserve money policy (loose then tight then loose?)?
Then there are the massive subsidies paid to Ukraine - $150 billion or so from the US alone, which is incidentally about the budget for the Department of Homeland Security and more budget than Commerce, Interior, Energy, Justice, the EPA, the SBA, NASA Labor and so forth?
If you really want to make a dent on the problems in the US - the biggest suckhole is health care. Americans pay nearly twice as much for healthcare as anyone else per capita, on both absolute and relative bases, with certainly no better and generally worse results. The difference between even say Swiss or Luxemburgian absolute health care spend rates and US health care spend rates is literally in the $1.5 trillion a year range. That's well above the Defense spend.
The word "liberal" has multiple, sometimes contradictory meanings.
FDR redefined liberalism in the 1930s when he enacted New Deal policies.
In response, the classical economists and classical liberals rebranded themselves and their economic point of view as "fiscal conservatives."
Neoliberalism *is* fiscal conservatism. It opposes and occasionally outlaws Keynesian policies in government.
Unlike communism, capitalism, socialism or libertarianism, liberalism is not primarily an economic philosophy. It's central concern is preserving the freedom of the individual, whether the threat is overbearing government or overbearing oligarchs, to which the rule of law is essential.
Ascribing inflation to monopolies is based, not just on theory, but on evidence. There is widespread evidence from the FTC, for example that the oil price increases after 2022 were the result of collusion between OPEC and U.S. producers, who were sharing production information.
It was estimated to be responsible for 27% of U.S. inflation. Oil companies had record revenues and record profits.
The other aspect, which I have addressed at length in other posts, is the role of interest rates in creating a superbubble and affordability crisis - which is directly related to the increased concentration of wealth and income. It has not only created billionaires, it furnished them with vast quantities of ultra-low interest debt to drive more mergers and acquisitions, which has led to ever-greater concentration of economic power.
It has especially created a bubble in real-estate and a housing and affordability crisis, as well as an "everything bubble" with junk investments like crypto.
These are all denominated in local currencies. U.S. health care is a wasteful, tragic shitshow, but the very fact that people make so much money from it is what has created a trap. Forgiving people's medical debt would be a start, but the problem globally is excess debt that will never be paid back.
Dead on about reverting away from the Keynesian times Goodwin and Hockett wrote about (see below)
The stagflation was predictable though. The Vietnam War and OPEC made it inevitable. It was an excuse for the neo conservative economists to get back in the saddle. Of course the last 50 years have been less productive, more unequal, and more debt increasing!
I think your post on scurvy compliments this one well. We kept discovering and forgetting how to avoid scurvy. Similarly your work has shown we keep forgetting the better ways to run the economy. Nobel Laureate Johnson reminds us here
Simon Johnson talking about his book Jump-Starting America. He concludes that we need to return to the era of 1939 to the 70's, and that China has continued those strategies that we abandoned.
Yep, all it takes is a twist of the dials they control to make things rational again.
They used those dials to keep us losing, thinking that's the best way to control us.
But I feel like a new faction of the wealthy may realize the popularity of cutting out the middle men that steal from both sides while producing nothing.
I think you totally nailed it with the free market becoming a religion. You stay within economics or what use to be called political economy, but it's even more existential. As science has discredited the mythologies or religion it hasn't replaced the meaning and purpose of life given by religion, and since most people want some sort of higher purpose ideology, they have, without really knowing it, replaced religion with the endless pursuit of money, which might even work at least for a while if people were actually getting wealthier, and the "religion" behind that concept is the "free market".
Keynes actually said that what people want is religion.
I am not religious, but it’s clear to me that the literal actions that Christ calls for in the Bible - for the rich to forgive debts to the poor - are not metaphors.
The rigidity of institutions in asserting that there is no other option means people think that nothing can be done and collapse, conflict and catastrophe are the only possible result, when debt restructuring is viable and effective.
I wrote about it here.
https://open.substack.com/pub/dougaldlamont/p/what-would-jesus-do-christs-biblical?r=9gk0j&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
I read and enjoyed your take on Jesus' teachings about debt relief. Years ago when I read the gospels I too was struck by how different they seemed if you just took them literally, especially the parts where people address him a god and Jesus basically
replies, "You said it, not me,".
I too am not religious. Sometimes, however, I think that a modern religion is going to be necessary to provide some sort of moral framework for a society that alternates between morality tales written in the bronze age and a moral structure based around ever increasing consumption and "the free market ideology".
"I read and enjoyed your take on Jesus' teachings about debt relief."
Until relatively recently, all three of the world's major religions forbade interest-based debt. The Catholic Church used to declare a "debt holiday" every 50 years, where all debts were declared invalid.
Can you imagine the havoc a "debt holiday" would create in today's economy?
Reminds me of a joke.
A well-to-do looking gentleman walks into a small town hotel, puts a $100 bill on the counter, and asks for a room.
The hotel owner quickly went to the grocer where he got food for his restaurant, and used the $100 to repay the debt he had for his food bill. The grocer went to his mechanic, and gave him the $100 for repairs made to his delivery van. The mechanic fave the $100 to a hooker who had "loaned" her services to him. And the hooker went to the hotel and put the $100 bill on the counter to pay for her use of a room.
The gentleman stranger came back with the key, saying, "The room is not to my liking", and took the $100 bill off the counter and left.
Everyone is out of debt! What just happened here? Can't we do that with the greater economy?
Here's a hint: those loaning the money are not the ones holding the debt.
But if Jeff Bezos or Elon Musk come into your village seeking a room, take his money quickly and offer him the crappiest room you have. :-)
Debt-relief today is exactly what is required, but it is different than the scenario you present.
For example, debt restructuring focus on personal debt, not business debt, because businesses have the capacity to generate ongoing revenue. A house that you live in does not.
The example you involves business transactions, and that is an important difference. That also don’t have interest attached.
Most outstanding debt is accrued debt.
In the case of modern mortgage debt, banks extend credit against an asset. They are not taking money from deposits or reserves. They create an IOU, and create money in the account of the borrower. That money is repaid with interest, so that the total repayment may be twice what was borrowed. In fact, a lot of debt today is just accrued interest.
Restructuring mortgages downward is one way to achieve it.
There is another way of looking at your example.
Someone borrows $100 and lends it to someone, who promises to invest it. They lend it to someone, who promises to invest it. They lend it, with a promise to invest it, and so on. They are all charging interest, so that 5 people have loaned money. The last person invests it, as promised, but the investment doesn’t pay off, and they lose everything.
That lost $100 leaves well over $500 in debt, with interest going up on all of them, and there’s no money to pay the bill.
If the person who loses the $100, and starts the repayment, it won’t clear the bills. That’s why debt restructuring matters.
And yet, "debt restructuring" doesn't touch the elites who are sitting on top of the pile.
I have a better solution: impose negative inflation. Each year, the value of your savings goes down.
People who must live hand-to-mouth won't notice a difference. People who have amassed wealth will hurt the most. Those in-between will be incented to keep their money flowing.
Who do you think the debt is owed to?
Nice, but it's hard to see how anything changes until our ship hits an iceberg.
My personal plan is tools, skills and friends.
Years ago, part way into the first Trump administration, i thpought i had an insight about this while dumping off my trash one day. Wrote about that here:
https://robbyporter.com/trash-trump-ptolemy-and-the-free-market-ideology/
You're right. The "free market" in the 1800s that people were trying to achieve was not about freedom from democratically elected government.
What was keeping the market from being free was the "overhead" on the economy of paying for an inherited aristocracy that owned for a living and lived on interest and rents.
I things went bad waaaay before aristocracy.
Some 7,000 years ago, at several locations on the planet, some clever hairless monkeys learned how to grow grain.
Prior to that time, without refrigeration, food lasted no more than a year or so. For the first time in human history, grain agriculture gave us the ability to hoard and withhold food. Granary receipts are arguably the first form of money. This created social stratification, hierarchy, and rich and poor.
"[Ishmael] There's only one way you can force people to accept an intolerable lifestyle. [Julie] Yea. You have to lock up the food." — Daniel Quinn, The Teachings That Came Before & After Ishmael p181, excerpted from My Ishmael, A Sequel, date: 1997-01-01, link: https://archive.org/details/isbn_9781502356154/page/181
With respect, I think this is an incomplete reading of history. The development of domesticated agriculture resulted in more reliable food production and energy to support the population. The flip side of a revolutionary change in better access to food that a community comes to depend on, the potential for crop failures due to disease, disaster, or mismanagement are extistential for the community. Understanding cycles of seasons, calendars, astronomy, building pyramids aligned with cardinal directions, stone circles, are about establishing calendars to orient themselves to growing seasons. In the Roman Empire, the only crime that had the death penalty was messing around with granaries, because mucking up could result in hunger, starvation, riots, and death. There was a Roman God of rust, which is a fungal disease of grain.
There are rules, law, order and structures that are self-serving, and there are also rules and structures that are established after a disaster, in order to prevent one. Just as today, there are rules and laws that are unjust or unjustly enforced, and there are rules and laws that are there to prevent disaster.
Agree with your sharp analysis. Thanks. You might find the Powell Doctrine memo interesting. It was a plan written by Louis Powell, funded by corporate interests, that created the Cato Institute, Hoover Institute, the Federalist Society and paved the way for Reagan’s election. It was in response to the successful 60’s movements ( anti-war, environment, civil rights, women’s rights, consumer protection, progressive taxing…). The empire struck back.
Great analysis, I've been following MMT ideas for a while now, and the whole neolib thing is really frustrating. I also believe that the words we use matter, in particular we treat "money" and "wealth" as synonymous, and we talk about rich people "making money" (e.g. "he made his money in property").
For example,a farmer creates wealth by using seeds, land, skill & labour to feed a population. His income may be high or low depending on many other factors, but charging high prices doesn't create more wealth, even though he may be described as more "wealthy". We may also say he's "made a lot of money", except he hasn't. He can't , only the govt "makes" money. He's accumulated money, and become rich.
A money-market trader can accumulate a lot of money, but creates no wealth, he's just a lucky gambler.
When we talk about people being wealthy and making money, we reinforce the idea that getting rich creates wealth, and that people who do this produce the money that society needs. Which is of course the opposite of reality.
Thank you!
If people reframed “making money” as “taking money” where economic rents are concerned, it would often be more accurate.
“He’s taken a ton of money” has a different ring to it.
I like "taking money"!
Another word that annoys me is "earn". Does a CEO "earn" a $5 million bonus for manipulating the share price? Probably not, but an Amazon packer definitely earns their minimum wage (and more).
In my view "earn" should only apply to remuneration for activity that creates real wealth, not for manipulating money.
Yes. It's the difference between the real, productive economy where people trade money for value, creating jobs and turning work and capital into output, and an economy where people may be money-takers and job destroyers all at once.
This distinction was widely acknowledged and understood by the Classical economists and labelled as such in the categories of earned and unearned income. The distinction was “lost” (I increasingly believe purposefully obscured) during “the marginal revolution” which led to the neoclassical orthodoxy which still holds sway in the economics academy today (having survived Keynes by bastardizing him in the synthesis which led to New Keynesianism).
Amazing write up. Tired of the bleeding.... no rights to self defence. No matter how much one is bleeding out. Whole thing is rigged. Love the work. Keep it up!
Thank you very much! Share it with anyone who can bear it!
Great essay!! “A little knowledge”describes me…but having read your essay I have more….saved so I can read again. I’m sure you’re aware The Old Testament had a formal debt Jubilee system every 50 years.
The MMT Modern Monetary Theory debate is one that needs to be discussed. I would frame it as a case of Observational Science vrs Empirical science. MMT proponents have historically valid examples, but critics claim that they are invalid and lack empirical evidence.
The critics are throwing stones from their glass verandas. MMT is not complete, but I think the point I made about science vs a set of rules explains the mindset.
In fact, I think this explains the entire communications conflict.
Orthodox Macroeconomics is a set of rules. It is prescriptive. It says both "this is how we should understand the economy, and this is what we must all do." It is an ideology,
The orthodox critics of MMT always get it wrong, but how they do so is important, because it's the same way. They are used to thinking of their own economics as rules. So they assume that MMT is a set of rules to follow. The rules conflict with their own, so they reject it.
MMT Is not a set of rules. It describes what is happening based on evidence in facts, in ways that contradict the fact-free assumptions of orthodox theory.
Unfortunately we are not as skilled and well funded as the billionaires. What to do? I’m on the library waiting list for Alex Himelfarb’s book on this. But at least a dozen books have been published already. All the young people I know are beyond reach and controlled by Joe Rogan.
Thank you for this. Excellent clear eyed analysis and long overdue reassessment. Hopefully we can wake up and see the reality. We have been so far removed from it to confuse and manipulate us. And we cling to our ignorance -- the ignorance that is as stifling as it is deadly.
Another great explainer, thanks for this. Economics continues to be complex for all - including politicians. It may be useful to suggest government policy ideas that would start to address this historic problem. Given economic cycles and what tends to historically create change - or at least disrupt the cycle of neoliberalism, society may be running out of time. Disparity is significant and growing. This historically leads to social unrest or worse. And, our environment continues to change with troubling weather events. It’s critical to simplify this economic thing down to the impact on everyday life and what policies would start to have a positive impact for households. And, few understand the role of the central bank- including politicians.
I wrote an example here. https://dougaldlamont.substack.com/p/this-is-what-every-democratic-government?utm_medium=email&utm_content=post
A fairly accurate overview except for severe political biases and poor understanding of the competing mainstream economic philosophies.
Neoliberal = a new version of liberal economics - to term it conservative is nonsense.
Neoconservative economics is libertarianism.
Neoconservative politicians focus on foreign policy - i.e. wars and defense spending while cleaving far more closely to neoliberal economics than libertarian views.
It is also wrong to ascribe inflation solely or even primarily to monopolies. There is a source of inflation: sanctions on Russia - the largest wheat exporter, one of the largest fertilizer exporters, a huge energy exporter of all forms of fossil fuels and the largest or a major exporter in a wide range of other commodities.
Even on the corporate monopoly/monopsony/oligopoly side, the implied lack of basis behind their price increases is also false. Have we forgotten the supply chain effects of the COVID lockdowns? What about the whipsaw in interest rates and Federal Reserve money policy (loose then tight then loose?)?
Then there are the massive subsidies paid to Ukraine - $150 billion or so from the US alone, which is incidentally about the budget for the Department of Homeland Security and more budget than Commerce, Interior, Energy, Justice, the EPA, the SBA, NASA Labor and so forth?
If you really want to make a dent on the problems in the US - the biggest suckhole is health care. Americans pay nearly twice as much for healthcare as anyone else per capita, on both absolute and relative bases, with certainly no better and generally worse results. The difference between even say Swiss or Luxemburgian absolute health care spend rates and US health care spend rates is literally in the $1.5 trillion a year range. That's well above the Defense spend.
The word "liberal" has multiple, sometimes contradictory meanings.
FDR redefined liberalism in the 1930s when he enacted New Deal policies.
In response, the classical economists and classical liberals rebranded themselves and their economic point of view as "fiscal conservatives."
Neoliberalism *is* fiscal conservatism. It opposes and occasionally outlaws Keynesian policies in government.
Unlike communism, capitalism, socialism or libertarianism, liberalism is not primarily an economic philosophy. It's central concern is preserving the freedom of the individual, whether the threat is overbearing government or overbearing oligarchs, to which the rule of law is essential.
Ascribing inflation to monopolies is based, not just on theory, but on evidence. There is widespread evidence from the FTC, for example that the oil price increases after 2022 were the result of collusion between OPEC and U.S. producers, who were sharing production information.
It was estimated to be responsible for 27% of U.S. inflation. Oil companies had record revenues and record profits.
The other aspect, which I have addressed at length in other posts, is the role of interest rates in creating a superbubble and affordability crisis - which is directly related to the increased concentration of wealth and income. It has not only created billionaires, it furnished them with vast quantities of ultra-low interest debt to drive more mergers and acquisitions, which has led to ever-greater concentration of economic power.
It has especially created a bubble in real-estate and a housing and affordability crisis, as well as an "everything bubble" with junk investments like crypto.
These are all denominated in local currencies. U.S. health care is a wasteful, tragic shitshow, but the very fact that people make so much money from it is what has created a trap. Forgiving people's medical debt would be a start, but the problem globally is excess debt that will never be paid back.
Devastatingly lucid disembowlment of the current system. Thanks Dougald. Keep it up.
The austerity and Greece results - perfectly predictable from Keynes analysis - the paradox of thrift
Dead on about reverting away from the Keynesian times Goodwin and Hockett wrote about (see below)
The stagflation was predictable though. The Vietnam War and OPEC made it inevitable. It was an excuse for the neo conservative economists to get back in the saddle. Of course the last 50 years have been less productive, more unequal, and more debt increasing!
Goodwin and Hockett have two good essays which show why 1939-75 were so productive.
Pulitzer winner and presidential biographer Professor Doris Goodwin essay
The Way We Won: America's Economic Breakthrough During World War II
https://prospect.org/health/way-won-america-s-economic-breakthrough-world-war-ii/
The Lesson Of World War II Robert Hockett
https://www.forbes.com/sites/rhockett/2021/11/12/war-on-inflation-part-1-the-lesson-of-world-war-ii/
I think your post on scurvy compliments this one well. We kept discovering and forgetting how to avoid scurvy. Similarly your work has shown we keep forgetting the better ways to run the economy. Nobel Laureate Johnson reminds us here
Simon Johnson talking about his book Jump-Starting America. He concludes that we need to return to the era of 1939 to the 70's, and that China has continued those strategies that we abandoned.
https://youtu.be/clEwdFIbEHg?t=1831
Laureate Vickrey destroys all the flat earth, austerity economics thinking in Fifteen fatal fallacies of financial fundamentalism
https://www.pnas.org/doi/10.1073/pnas.95.3.1340