So, another great interview---this morning with James Galbraith on KPFA Behind the News. They spend the hour developing different aspects of the economic inequality and financial crisis syndrome. In one way or another they go through the neoliberal mantra on this and that and debunk them in lots of statistical and discursive ways.
The material is rich enough for a political pamphlet maybe titled Occupy for Dummies. For nearly each economic excuse for neoliberal polices, there is a well documented answer that says, bullshit.
The title of Galbraith's book sums it up, Inequality and Instability: A study of the World Economy just before the Great Crisis.
This general question came up over on Pen-l when Sabri Oncu posted an obnoxious econometric study that:
``Historical evidence from several major credit booms finds scant support for the inequality/crisis hypothesis.''
Sabri proposed to use his econometic tools on a data set and prove contradictory conclusions, meaning you can prove anything with these tools. I think I am familar enough with using math (in a different context) to say, its all in the definition and use of parameters. They constitute a fudge class along with constants...
At issue is the concept that such tools can used to predict outcomes. If this was so, why are crisis always a surprize?
It seem much more accurate to take a simpler approach looking at what is and has been, use some basic reasoning and tell the story.
The latter approach is roughly what Doug and Galbraith do in different ways. In Galbraith's case, his graduate student machine goes through data sets on different countries with known historical policies and outcomes and compares and contrasts them to find what does and does work out for the benefit of the people and the benefit of the rich. They routinely find basic neoliberal policies lead to more and more inequality...and inequality ends in instability, a polite word for crisis.
Well duh, you say. But the importance is that those in power use their technocratic class to justify their policies. Producing well argued and empirical evidence highlights the ideological nonsense of the neoliberal mantra.
This mantra amounts to an endless call to prayer sung morning, noon, and night. Obiviously that system is breaking down all over the world.
So these studies are important to get out there to support the people's slogans and counter the power elite propaganda. And they have the additional benefit of outlining implicit policy and structural changes.
CG