June 7th, 2014
in Op Ed
by William K. Black, New Economic Perspectives
I spent today in Washington, DC presenting and attending a conference put together by Ralph Nader on left-right convergence. The theme was that there were many issues on which large elements of the left and right agreed and could change existing policies if they worked together. I spoke about the desirability of effective financial regulation to break the Gresham's dynamic and prevent or at least minimize the damage of future financial crises and the desirability of prosecuting the elites that run financial "control frauds."
The disturbing aspect of the conference was on the left. The irony is that the disturbing nature was hi-lighted by Grover Norquist's talk. Norquist's theme was that the standard for such collaboration should not be compromise and quid pro quo agreements to create a winning coalition, but strong agreement by both sides on a common policy. Both of the speakers from the "left" on cutting Pentagon spending emphasized the need to do so due to "the budget" and "the debt" crisis. Several members of the audience who identified with the "left" expanded on that theme. The representatives of the "right" eagerly pushed the same meme. One added his supposed shock that younger Americans were not enraged by the crushing debt the baby boomers were supposedly bequeathing them. No one on the "left" or "right" pushed back against these odes to austerity.
I report this as a wake-up call about the extent to which the "left" has embraced economic myths and policies that have cost millions of Americans their jobs (including the millions who have become so discouraged that they have ceased looking for work) and ten million Europeans their jobs. They ignored Norquist's standard for convergence and the statements of earlier panelists about the critical need for jobs paying a living wage. In their zeal to cut Pentagon spending, they championed austerity policies that cost millions of jobs and are designed to severely cut blue-collar wages.
It is, of course, perfectly possible to cut the Pentagon budget and increase net spending by making larger spending increases for higher priority government programs. Jamie Galbraith has long run an organization of economists, which I support, that takes this position. The "left" should never support austerity or adopt its myths of a "budget" or "debt" "crisis" and should be particularly vigorous in rejecting the right's effort to turn children against their parents and grandparents on the basis of the lies about "burdening our kids." The thing that devastates children is austerity. I am asking Ralph Nader to add his voice in opposition to austerity.