More Wealth Supremacy — the Divine Right of Billionaires

Paul Krugman has a nice essay today on sociopathy among America's wealthiest citizens. He begins:

"Robert Benmosche, the chief executive of the American International Group, said something stupid the other day. And we should be glad, because his comments help highlight an important but rarely discussed cost of extreme income inequality — namely, the rise of a small but powerful group of what can only be called sociopaths."

Billionaire Stephen Schwarzman of the Blackstone Group (who through a $3 million birthday party for himself in 2007) said, "It’s a war; it’s like when Hitler invaded Poland in 1939." Krugman left out Lloyd Blankfein's "We are doing God's work".

Berkeley scientists published a 2012 paper: "Higher social class predicts increased unethical behavior." Inequality promotes rule-breaking, indifference to others, etc., in those who are better off.

Is it any surprise that greater inequality causes greater immorality? In the course of their money-grubbing, the Benmosches and Schwarzmans and Blankfeins must realize that there is no real justification for anyone making billions while huge numbers struggle at minimum wage. People like Michael Bloomberg (whose wealth grew by about $4 billion in just one year) must either admit that they are leaches or they must invent some 'justification'.

Psychologists call it "cognitive dissonance". Orwell called it "doublethink".

In a different time, monarchs invoked a "divine right of kings". Blankfein, Benmosche, et al., think likewise, that they are divinely entitled. Right-wing economists like Gregory Mankiw appeal instead to innate superiority deriving from genetics. This is a familiar phenomenon in the US. Horrific American behavior in Iraq or Afghanistan is excusable because "Americans aren't really like that". Americans are "exceptional" — citizens of, as Christiane Amanpour put it, the world's "most moral country" or as Madeleine Albright said, "the world's only indispensable nation".

Whatever it's called, the outcome is the same — a wonderland in which gross misdeeds aren't simply justified, they're moral.

This Republican (and Democratic) Economy

Paul Krugman writes this Monday of "This Republican Economy" and Barack Obama's and the media's unwillingness or inability to state the obvious regarding GOP obstructionism. I think Paul Krugman fails to grasp the nettle (to paraphrase the great left political philosopher G. A. Cohen speaking on John Rawls).

The most obvious liberal-progressive response to Mr. Krugman is that Obama and the media have failed to highlight know-nothing Republican obstructionism because they largely agree with it. On healthcare, foreign policy, education, Social Security, domestic security and a raft of other issues, Obama is conservative. The media in the US is likewise conservative. News organizations like the Times have supported war almost without qualification. They have raised only the most tepid challenges to Obama attacks on American civil liberties. They have largely supported talk of privatizing Social Security, even after the crimes of Wall Street. The list goes on.

If Paul Krugman's question for Obama is "Why the weak response," a question for Mr. Krugman is, "Why not take your own reasoning to the conclusion evidence supports?" This country, not just GOP fanatics, is largely conservative and anti-Keynesian. Obama is anti-Keynesian, just not as extreme as the GOP (on economics; he's more extreme on foreign policy and domestic security). When he had the choice, the opportunity, and the swell of opinion with him, Obama nevertheless surrounded himself with substantially anti-Keynesian economic thinkers (the exception being Christina Romer, who was soon forced out). Keynesians like Paul Krugman or Joseph Stiglitz were pointedly excluded.

Media elites (with some like Bill Keller related to industry executives, some like Cokie Roberts related to government elites, or some like Thomas Friedman being actual economic elites) identify with wealth, not with common Americans. Many academic elites do also.

As John Kenneth Galbraith noted decades ago, these people's interests align with wealth. Moreover, the perceptions of self among media and government elite align with wealth. Elite interests and ideas — to borrow a phrase economist Dani Rodrik has recently used — are highly homogeneous. The contempt Mike Bloomberg shows average Americans is widely shared among Democrats, not just Republicans.

Paul Krugman on America's Lost Decade

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A Brave New America {in progress}

Paul Krugman pulls his punches. He writes in two Times pieces today, one on the op-ed page and the other on his Times blog, of the issues of unemployment, the Obama administration's failure to act and the elite's indifference to the suffering of many now that the Great Recession has officially been declared over.

Looking a year or two forward in his blog, Krugman writes,

[There] will be high unemployment leading into the 2010 elections, and corresponding Democratic losses. These losses will be worse because Obama, by pursuing a uniformly pro-banker policy without even a gesture to popular anger over the bailouts, has ceded populist energy to the right and demoralized the movement that brought him to power.

And from his Times op-ed essay,

You might think, then, that doing something about the employment situation would be a top policy priority. But now that total financial collapse has been averted, all the urgency seems to have vanished from policy discussion, replaced by a strange passivity. There’s a pervasive sense in Washington that nothing more can or should be done, that we should just wait for the economic recovery to trickle down to workers.

Not long ago, in an interview with Eliot Spitzer on Bill Maher's show, Krugman sounded far more pessimistic. "Sometimes I wake up and think I'm in a third world country." And "The American dream isn't dead, but it's dying pretty fast." And still more: "If the US was a third world country, the IMF and others would be saying, 'You have to get rid of your oligarchs.'"

Paul Krugman and Bob Herbert are the most critical — and incisive — voices on the Times op-ed page, but the Times still tones them down, I suspect.

Paul Krugman: The American Dream Is Dying

This clip from the Huffington Post:

Krugman: On bad mornings I wake up and think that we are turning into a Latin American country.

On good mornings I think "This is America" and we have always in the past managed to turn ourselves around, and there's an FDR just around the corner.... I was kind of hoping that Obama might be FDR, but maybe not.

If America was officially a third world country, the International Monetary Fund would come in and say, "You have to break the power of your oligarchs. Those banking interests, they have too much power."
...

The truth is that most people don't have parents who [can send them money].

...

The American Dream is not totally dead but it's dying pretty fast. You look at the numbers on social mobility, on the ability of people to move from modest or poor backgrounds up, the United States is way down on the list.... You have a much better chance of getting up the scale in Finland or Sweden or France than in the United States.

On "Real Time with Bill Maher" Friday night, New York Times columnist Paul Krugman said that while the American dream is not totally dead, it is "dying pretty fast," particularly when it comes to social mobility. Krugman made this statement during a lengthy discussion with former New York Governor Eliot Spitzer and host Bill Maher about the troubled state of the American economy and where we are in terms of reforming the system.

Both Krugman and Spitzer expressed optimism that America could right itself in the coming years if the correct steps were taken, but they were also highly critical of the degree of inequality that has become a part of American life and the lack of reform that has so far taken place.

"On bad mornings I wake up and think that we are turning into a Latin American country," Krugman said. "But on good mornings I think, well this is America, we have always in the past managed to turn ourselves around, and there is an FDR just around the corner if we could only find him. I was kind of hoping Obama might be FDR, but maybe not. "

Read more at: http://www.huffingtonpost.com/2009/09/26/krugman-the-american-drea_n_300702.html