The New Deal political coalition was shattered in 1968 and we've had neoliberal politics since then which are indifferent to economic inequality. Inequality has unsurprisingly gone up.
Blaming it on magic paper vs gold money to the exclusion of everything else seems like a red herring.
> The New Deal political coalition was shattered in 1968 and we've had neoliberal politics since then which are indifferent to economic inequality.
This is also a red herring. The New Deal did little to actually fix structural wealth problems. And "neoliberal" politics actually included a lot of progressive politics like negative income tax, drug legalization, prison abolition, etc.
A better reading of history would be that the post-war boom in the US mostly amounted to a lucky windfall and the US has wasted a lot of policies trying to recreate an economic boom using cultural levers.
Eh. The New Deal was a lot of things over 35 years but there was a consistent "bottom-up" theme that's been replaced by a "supply side" theme.
Neither set of ideologies explains everything, but lots of little decisions over a few decades can add up.
(Also, I realize we're being fast and loose with labels here, but after 20 years of Reagan/Bush/Clinton drug war, taking credit for legalization feels a little bold.)
> negative income tax, drug legalization, prison abolition, etc.
Under what interpretation of the word "neoliberal" do any of these things fall under? Especially the last two; find me a single person claimed to be neoliberal who supports either.
I have a hard time seeing the discontinuity between the New Deal people you're referencing and the 1960s Great Society ones that pretty much iterated on the same themes of the scientific management of society through monolithic institutions with expansive powers.
It's pretty much relentless hubris with little to show and much to answer for.
Depends on the outcome you're looking for, I guess. From a sheer "managing the macro architecture of civilization" perspective it's hard to argue -- the speed with which China can do substantial things is staggering. They trade that off for individual liberties, presumably. Which makes one wonder if the liberties we enjoy are worth the bargain, on net.
Or perhaps the question boils down to whether "on net" is the right objective function.
I guess you'd have to ignore what Deidre McCloskey describes as the Great Enrichment of liberal democracies:
"[...] a rise in real wages 1800 to the present by a factor of 10 or 30 or
(allowing for improved quality of goods) 100, which is to say 900 or 2,900 or 9,900
percent" [1]
Meanwhile there's a certain propensity for incredible inhumanity, eugenics (in the case of the 1920s Progressive movement) and the outright abuse and "reeducation" of minority races in China.
it's not. China is looking at a demographic collapse in the next few years that upends their running economic model and makes any future projections based on past history suspect. One of the ways out of demographic collapse is immigration, but somehow I don't see China's equivalent of US's Mexico/LatAM coming out of the global geopolitical woodwork. Immigration is simply not in China's DNA. Outside of immigration, no amount of "scientific management" or "good policy" will make 18-30 year-olds appear magically over the course of 5-10 years. Unless my understanding of biology is wrong and dolphins could sprout legs and walk on land, usually it takes 18-30 years.
I'm willing to change my mind. What sort of an ace in its hole does china have to change this situation?
The specific thing that will collapse is the economy.
When people retire there is a sudden shift from investment to liquidation. That's a driving factor for popping asset bubbles, and china is currently one huge asset bubble.
Like it or not (i personally dont), we are also living in a world where the central planners rely on consumption-driven economics, and there just isn't a chinese consumer market anymore due to demographics.
The multi-child family people are already retired, though, and long-retired at that. Them dying out means a shrinking population but also lower pension costs with no lost labor.
The working population has been steady-state at 1-child for 40 years followed by 2-child for the last few years.
I suppose there could be some demand loss due to fewer people demanding things, but.. there's a lot of room for additional demand in China. Plenty of people where running water is a last-20-years nice new thing.
Hypothetically, what would occur if the federal reserve simply sent money to every bank account rather than trying to steer market interest rates? If it's an equivalent action then why do we only perform the action that is more prone to regulatory capture?
Theoretically, supply side economics. Demand side economics makes even liberal economists uncomfortable, because it's so closely tied to inflation of consumer goods. They would rather fund the industries that make the goods, so there are more goods (and jobs producing them).
It's clear that it isn't working, which is why a heretical sect of MMT economics wants to do demand side. It's a big change, the kind that takes a generation dying off to accomplish. Especially since it may not work. It's a genuine unknown, with the primary advantage that we don't already know what kind of regulatory capture it would cause. Which is enough for some, given how badly the current situation is fraying.
It's not an equivalent action. If you print money and use it to buy bonds, then if you ever want to reduce inflation you can just sell the bonds again. Whereas if you print money and give it away then to get it back you have to tax people, which is (a) unpopular and (b) involves 'the government bailing out the central bank'.
You cannot make an absolute statement that consumers vs businesses deserve more money, you have to look at the current market.
However, the central banks have opened the flood gates for supply side monetary stimulus. It's not unreasonable to think that the demand side has been neglected massively and that money should be put into the demand side instead.
That question is usually answered by the people willing to take out commercial loans. Without the market supplying that function, you’d have to try and figure this out yourself centrally.
The second issue is that you really are spraying money evenly across the whole economy, effectively starving productive ventures of capital while at the same time endowing moribund ventures with it instead.
So it’s not quite an equivalent scheme, it has different benefits and costs.
Because in a democracy, effectively granting the legislature the power to print money and hand it to citizens is fraught with some pretty obvious conflicts of interest.
(yes I know the Fed is “independent” but it is the tail on a government dog—the two are separated only in name)
Is the peril greater than giving money to large financial corporations? Extremely Large corporations often lobby or directly corrupt their surrounding regulatory authorities.
Blaming it on magic paper vs gold money to the exclusion of everything else seems like a red herring.