Friday, March 6, 2009
Introductory Economics: Foundations
My first questions were not necessarily economic questions. The questions I had in my mind as a young and impressionable undergraduate were philosophical ones. What is the meaning of life? Why is there injustice in the world? Who has power? What is democracy? Why is there war and hate in the world? What should I do with my life? With my limited experience and understanding of the world, the best answers I could come up with any for any of these questions had to do with money, as in the instruction – follow the money. In other words, my intuition told me that if I could understand how the economy worked, I would be much closer to having answers to all the above philosophical questions that plague many a young and inquisitive mind.
My first college economic course was taught by a raving free market economic lunatic who would later host a conservative economic blog that brought him national prominence. He was a fascinating teacher and he instilled in me the economic notion that people operate according to what is in their best interest. This is a basic assumption in economics. Assumptions are important to economic thought and theory. Most of the underlying assumptions for economics, such as people make decisions based upon what is in their best interest, are not only conceivable, but are not overly objectionable. The assumptions that are taught in introductory economics are important because they form the mathematical foundations of a theory that is taught in upper level and graduate economic courses. I will go into these assumptions in greater detail in another post. Suffice it to say that the final outcome of this assumption of individuals making decisions according to what is in their best interests is homo-economicus or economic man.
Economic theory postulates a society populated by economic man; an entire population of identical actors making decisions that will maximize each of their happiness and the result of this is a society that is the most well off. The fin de siècle economist and social critic, Thorstein Veblen, described these economic actors called homo-economicus as “homogeneous globules of desire.”
Some of this may be familiar to those of you who have suffered through the introductory economics course while you were an undergraduate student. The mere mention of introductory economic classes to most individuals can bring a sense of insecurity. I have often heard statements such as, “the only course that I got a C in was Intro to Econ,” or “I don’t remember much from the class except how incomprehensible it was.”
Introductory Economics provides the first exposure to concepts such as supply and demand curves, general equilibrium, consumer and producer surplus, price elasticity, gains from trade, comparative advantage, prisoner dilemmas, externalities, perfect competition and other economic concepts that can be a trying and forgetful experiences. However, what often sticks in peoples minds from these courses are certain counter intuitive concepts that were apparently proved to the young student using the economic model introduced in these classes; i.e., minimum wage actually will end up hurting young and poor wage earners, restrictions on trade are detrimental to economy, or that taxes from the government will undoubtedly lower the overall welfare in society. The actual details of the proof are lost to most of us, but the enthusiasm of the instructor who introduced these concepts to many people remains and are vehemently trotted out as absolute proofs daily around the blogosphere today.
As we are bombarded with news reports about the falling stock market, unemployment figures and bank failures, I don’t think an understanding of economic theory is necessarily going to help us understand exactly why our economy has failed this time around, because there are no simple answers and economic theory is a simplification of a very complex process. However, there is a very important reason for getting a handle on exactly what the economic theory says and that is the fact that we should know enough to know when economists are basing their opinions on a theory that is a simplification and the conclusions drawn from these theories are not always applicable or helpful when dealing with real world problems. A famous economist from the past, Joan Robinson, once said, “the purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
Simplifying for the sake of understanding concepts is a very good thing, but we should also understand all the assumptions that underlie these models of simplification. The result of many people’s exposure to a limited set of neoclassical economic ideas is often fundamentalist maxims such as “government is awful and cannot do anything worthwhile,” “restrictions on trade are always bad for both importing nations and exporting nations,” and/or “raising the minimum wage will always lead to lowering the welfare of the least well off people in society.” People often believe they have discovered a Truth about the world after sitting through the introductory courses on economics and then want to go out and change the world to conform to the simple models they were introduced to in these classes often with the encouragement of professors or entire economic universities or think tanks espousing similar ideas at the expense of intellectual honesty.
Whenever you hear the cry from people or pundits that the we must have “free markets” or “lower taxes” or call any government program “socialist,” you can be sure that these people or pundits are informed by these simplified models in economics and are using them to their advantage. For there is one truth from economics that we can take away introductory economics that does provide light on individuals who describe themselves as “capitalists” and “free market activists” while calling those of us who criticize such fundamentalist beliefs “socialists.” These individuals are doing what we all do; they are operating according to what is in their own best interest because there is a hell of a lot of money at stake in the economy. I sometimes think we should all carry around certain moral assumptions when we are in possession of objective models that we are told provide us with scientific proof. Moral assumptions such as “power corrupts and absolute power corrupts absolutely,” and that wealth is the surest means for obtaining power, because there is nothing objective about those who ask for the freedom to do whatever they wish to do with their wealth regardless of the negative effects this may cause society. These people want money and power and they will do what ever it takes to obtain it and to hold on to it. This is the meaning and motivation behind many large and historical events we witness in the world that we place the label “evil” upon.
It looks like I will have to wait for households and a simplified model of economics for another day. Don’t worry, we will get to it. I’m not sure if will be the next post or one further down the line. Actually, I have no idea what the structure of format for all these posts on economics will look like. But, we will get to the nitty-gritty sooner of later.
Friday, October 19, 2007
Humor for a small audience
When I was young there was no internet and computers were something that had to do with punch cards and "Stop" and "Go To" commands. There was still a debate in Math classes about whether students could use calculators in class that had the limited capability of doing addition, subtraction, multiplication and division. Our minds, outside of school were still being polluted by television but we only had 4 or 5 channels to choose from. This did not stop us from vegetating in front of the TV sets for hours at a time however.
Of course, evenings consisted of scheduling around such sitcoms and Welcome Back Cotter, Happy Days, and The Dukes of Hazard. Before School, we'd watch Captain Kangaroo and Romper Room and after school we'd plop ourselves in front of the television for a couple of hours to watch reruns of Gilligan's Island, Underdog, The Dick Van Dyke Show and Scooby Doo. Sometimes we would stay up late with our Dad's and watch Johnny Carson on the Tonight Show and late at night Tomorrow with Tom Snyder. Often, while learning the artful skills of flipping that would soon serve us so well once cable TV arrived, we would stumble upon The Dick Cavett Show.
If memory serves me correctly, he was on PBS. PBS is what brought us Monty Python and The Benny Hill Show. As teenagers, much of his intellectual and sophisticated humor must have went over our heads, but there was something there that held our attention and we would sit and smile as we watched him question his guests in his most unique way. As we aged we started laughing harder at his quirks and were let in on his humor. His humor required that we know current events and the political discussions of the day.
I have not heard from Dick Cavett for many years. A search on Google shows he has continued to have shows up to the present on one network or another. But, the multitude of channels on the dish network and Cable have turned many of us away from the information overload accosting us from our television sets, so he has been lost to us and the world for a couple decades or more. What a refreshing and wondrous relief to discover his humor again while reading the New York Times online.
Thursday, October 4, 2007
A New Kind of Power
In politics we can see the economic incentives playing out as corporate interests hedge their bets between parties and candidates, so they can receive the greatest benefit. Even if they know a candidate does not fully support the issues that benefit the donor's interests the most, they may still contribute to the candidates campaign so they may benefit from the candidates success in an election. In a strange way, this incentive gives us comfort knowing that corporations can still support candidates with interests that favor the majority and not the market, because they realize the people who vote are not in full support of their profit-driven agenda. Thus, we see the corporations and large donors filling the campaign vaults of the democratic candidates for the 2008 election in full knowledge that after eight years of the Bush administration, there is little chance the American people will choose another term for a Republican administration.
Although far from perfect, in some ways it is better than the alternative. Many people like to point out that economics and capitalism fail to portray the more beneficial aspects of human behavior. Any human that was only motivated by their own self-interest and strictly made decisions based on the profit motive would be institutionalized as a sociopath. Corporations, which legally are treated as individuals, are described as psychologically unstable and a danger to society because of its single-minded devotion to profits over all other motivations. However, human nature also has even a darker side than the profit seeking individual oblivious to the greater interests of humanity. The profit seeking corporation can be seen as standing in the way of power to these darker forces.
During Eric Prince's testimony to Congress he described himself as not interested in finances and anyone who knew him well could testify to this. Aside from the fact that as a man who comes from big money he never had to worry about finances, we can see that this also reveals a man who represents the darker forces of humanity. Eric Prince has never hedged his bets. He is from a wealthy family tied to other families of wealth who only support radical right wing neoconservative and radical Christian objectives. As an observer of American politics, Prince is not satisfied with the slow shift to the right resulting from corporations hedging their bets while prefering candidates that will put money in their pockets at the expense of the peoples. Prince sees a danger of a populace that will feel disenfranchised and will never be fully immersed in the Radical Christian ideology that sees the world in terms of good and evil.
Under Princes views there can be no hedging. We are in a war with the dark forces of the world represented primarily by the Muslim ideology. Previously, it was a war with the communist forces of Satan, but no matter, Satan frequently shapeshifts and can reveal himself under new guises depending on the times. There is no time to hedge your bets under Princes ideology and we must be prepared to meet the darker forces and battle these forces in the name of Good and fundamentalist Christianity. A military that is at the mercy of congress is a military that will never be fully prepared for this battle. I joked about this being the plot of a great science fiction novel, previously. I am not one to make predictions and I am humble enough to know that random events are much more influential to the forces of history than any other conditions. However, this trend towards the privatization of the military that has created a private military capable of overflowing the majority of governments in the world and that continues to grow, has the necessary ingredients for disastrous results.
There is a realization that we cannot keep funding the Iraqi war or even our bloated military forever. There are rivalries between the branches of the military over the funding of new weapons systems as well as the role each branch will play in the future battlefields across the board. We have heard concerns over the growing influence of radical Christians at focal positions in the Air Force and the Army. As these rivalries grew, it became obvious to some that the military needed restructuring. This restructuring has be done by neocons over the past eight years and has left the military power in new private hands with an ideology that is not represented by the majority of Americans.
Some may want to point out the forces on the left that have contributed strictly to liberal and democratic candidates such as Unions or Moveon.org. I concede that these forces used to be a counter force to the forces on the right devoting their financial contributions strictly to right-wing and republican candidates. But, these powers on the right now have there own military that should bring cause for concern to all. Can you imagine if a similar force was funded and led by the left. What ff George Soros started his own security firm and began to get contracts under the next Clinton Administration? What would the right wing be saying and how long would it be before he was tied to terrorism and the war broke out between Blackwater and Soros firm [See, it is a great plot]? A more likely scenario will be a General on the battle field voicing the concern that Blackwater has made American soldiers larger targets for insurgents. This General might also feel slighted by his diminsished pay compared to Blackwater employees. A back alley war between Blackwater and American forces might result through the withholding of intelligence, funding of insurgents, negligence of duty, etc. Then it is only a matter of time before this war spreads home.
Obviously, my imagination is too active and this is likely to play out over a longer period of time for us to notice this drift toward Tyranny in America we are presently in. But, as unsettling as many of the impacts of the Bush administration has been on Democracy in the US, the privatization of military services is the most concerning and should be the red flag to us all that the empire will soon turn its violent hand against the citizens on the mainland as these armies increasingly come rushing to aide in disaster relief and urban unrest that is likely to increase over the coming years. I think I might prefer the profit-motive to these darker forces on the horizon.
Wednesday, October 3, 2007
Tuesday, July 24, 2007
More Irony
"Sir, Sir, Sir - Would you like to purchase a drawing? A card?, " he said as I strained my eyes to read the printing he held out to me.
"Sorry," I said, "No, thanks," as I walked on by and he moved on to the next lunch taker walking through the park.
I usually do purchase and hand out what is in my wallet to those who ask of me. Today, I walked by though as I was offended by the card. If he had drawn an Eagle casting a glance downward and written simply "Shame" above it, I would have reached for my wallet.
Haiti and Our Shame
He was the democratically elected leader of a nation. He was popular in his home country. On February 29, 2004, members of the American military and other officials broke into his home and kidnapped him then transported him to
Despite his popularity, Jean-Bertrand Aristide, has still not been allowed to return to Haiti. Haiti has a long history of being abused and exploited by Western Nations. It was originally a slave colony of France where the slaves revolted and won in 1804, thus establishing the first democracy where everyone was a participant and free it the world. (The US had slavery).
Rather than embrace this new young democracy as allies, The US worked to undermine the nation by joining with France to embargo the nation. The US was afraid of what would become of its slaves if the successes of the slave revolution were made known to slaves in America. France also charged Haiti with a debt for the freed slaves that Haiti didn't pay off entirely until 150 years later. Aristide was gathering international support in an effort to get France to make reparations for these debt payments that crippled Haiti's economy that continues to struggle today. Despite Frances vocal opposition to the US invasion of Iraq in 2003, France willingly went along with the coup to oust Aristide in 2004. All of this is available via Robinson and his new book, An Unbroken Agony: Haiti, From Revolution to the Kidnapping of a President.
When reading such accounts of our past and current imperialistic adventures around the world, it makes one cynical about our democracy in America where nothing is beyond the realm of possibilities when considering various ideas and theories that commonly fall under the heading of conspiracy. I don't dismiss any allegation anymore of the potential corruption of those representing the money interests in America. Obviously, to embrace such theories as absolute truth is foolhardy. But to dismiss such theories out-of-hand as preposterous is equally foolish.
I have read many of Robinson's previous works and find him a compelling and honest writer. The fact that he makes me look at our culture under a scrutinizing lens and ask hard questions about our history I think is enlightening. It makes me really believe the old adage that none of us are truly free when their are others suffering under tyranny somewhere else in the world. We should be ashamed of our actions in Haiti, even more so than our invasion of Iraq. We have had a long history of abuse in our relations with this democratic island nation that is led and populated by descendants of former slaves. America will never be truly free until it comes to terms with its past as imperialist, slaveholders and conquerors/exterminators of entire tribes and nations of people. Most of this past helped consolidate power in our nation today and contributes to our corrupt ways as can be seen by our actions in Iraq, Afghanistan, Guantanamo and, now, the Island nation of Haiti.
Thursday, July 19, 2007
A poorly written plot, and we believe this stuff?
I want to make a confession – I am a political junkie. I enjoy politics. My favorite blogs to read are political and sports blogs. Although, I contemplated starting a blog that was political, so I could push an agenda and challenge the power-structure in our nation, I had a fleeting moment of good judgment and decided not to. My favorite blog of all time was Billmon’s Whiskey Bar. I was just a reader, but he had insight and wit. The problem with political blogs is simple as the old adage – opinions are like assholes, everyone has them.
Friday, July 6, 2007
Why I am a Luddite?
I rely on technology to navigate in this world. I am fully indoctrinated into American culture with a Masters degree in Economics. I can find my way around the computer quite well without being information systems technician. I know just enough to stay employed in this pecuniary economy.
It is my belief that most of the people I encounter everyday are not happy in their roles each one plays in this same economy. We each feel something is missing or we should be doing something else. Out connection to each other via electronic media, cell phones and text messaging leaves all of us feeling incomplete. I believe the primary component missing in our lives is a connection to place and community - culture. Contrary to the diversity specialists and multi-cultural advocates, culture is not tied to self-esteem or an individual's identity. Culture is attached to place and when we can buy culture through the mail and identify with images we see on television or on our computer, we lose a connection to our community and history. This loss is much greater than most people realize, for without this history we cannot function as citizens. We are no longer responsible for a place and neighborhood, but are rather concerned only with ourselves and our families. To be successful is to be mobile and if the community surrounds us is in danger of collapse, the successful ones will move their families to a new community. This lack of responsibility to a place is what is driving America to forget its glorious past and focus instead on its perilous future and each of our escapes.
All of this is driven by our new technologies and the only way to salvage our past is to begin taking care of a piece of land, however small at the expense of a pension, insurance, mobility, pecuniary gain. All wealth derives from material resources. The pecuniary wealth holders among the professional classes hold on the wealth is precarious at best as our collapsing housing market currently foreshadows. Buying and holding property cannot bring a return on an investment that is subject to exponential laws, unless it becomes speculative. However, these returns do not increase the real value of the land. Only stewardship and community building can raise the real return on the land.
The real return comes with a sense of place that is received from becoming part of a social network that depends on this place for its survival. We no longer have many places left in the US that are locally dependent as we rely more and more upon foreign imports of inferior products. These products are not inferior because they are produced by an inferior foreign people, but rather because they are not produced with care. They are produced with only one goal in mind -- profit. A local producer cares about what happens to the products he or she sells within the community because these products reflect on his or her reputation in the community. Multi-national global corporations have no such cares, outside of how they effect their bottm-lines. All this brings me back to the only permanent solution to the disease that infects our global culture, for lack of a better term describing our current condition.
We must place an emphasis on community and our local environments over technological advancements. Any technology that breaks apart a local community or harms a local habitat, should be restricted if not banned. Without such restrictions, we will continue down the path of individual pursuits of financial rewards at the expense of everything that is necessary for the pursuit of human freedoms and dignity in each of our lives.
Monday, June 25, 2007
Opinions over Facts
I have to admit to being slightly uncertain of my convictions. For the most part I am not sure of much. What gets my ire is when anyone proclaims something that they are certain of or dismisses something because it is preposterous and violates some notion they have about the ways of the world they are certain of.
- We should have concern and compassion for our fellow human beings.
- War is bad and should always be avoided in almost all instances.
- We should preserve local resources and strive for a sustainable economy.
- We share the Earth with other species and we should have some reverence for all species on Earth.
- We should not take ourselves too seriously.
- Love is universal and is the closest thing to an absolute humans can experience
Monday, June 18, 2007
Getting Smaller
Apparently a new study is out revealing that Americans are now on average three inches shorter than their European counterparts. We are also the shortest among the 18 top industrial countries despite having the largest per capital GDP. Thirty years earlier we were the tallest and three inches taller than our European counterparts. That is quite a switch.
Things do not look good for America. We are a dying nation. Everywhere we look around us we can see doom. Even our myths (television, games, Internet, etc.) are all about death and destruction. 9-11 was just a foreshadowing of our eventual collapse.
Krugman, ever the economist, explains our declining height on socioeconomics. Although partially right, he only alludes to the specific problems. Our bodies are made of the earth. We are destroying the earth that we are living upon. As the quality of our environment deteriorates, our bodies follow suit.
We have been consuming oil, coal and chemicals for so long we have forgotten we are nourished by the soil. We flush our soil away to the oceans and our bodies are a reflection of the meager shape of the topsoil we grow our food upon and the modified foods we pump into our bodies without the slightest notion or reverence for the Earth that provides for us.
Over time we slowly wilt away as cancers and disease consume our weakened flesh. For this to be happening physically before our eyes without our conscious acknowledgment can only be explained by minds that have become increasing numbed and slowed as a collective Alzheimer's disease slowly eats away a memory of our more glorious past while we operate under the continual disillusionment that we are an all-powerful and giant people, even as we verifiably shrink from existence.
Wednesday, June 13, 2007
Water Pistol Man
Putting out fires on a world wide mission,
Did you ever stop to squirt the flowers in your own backyard?
--Michael Franti
I used to care. I mean I thought a lot about politics and what I should do personally to make the world a better place. I was far from perfect -- I'm American and I love my conveniences, and I rely upon fossil fuels, and I don't do enough to stop wars around the world that we support with our money and our lifestyles. I see an unjust world and I've felt wrong about it and my part in it for a long time.
I suppose that is what made me a liberal. I would listen to talk radio and get angry. So many people calling in on their cellphones while driving in their SUVs or big trucks to complain about liberals for caring about the state of the world and raising their taxes. As angry as I was, I could never match their contempt for those they called liberals. And there I was, a bleeding heart liberal who cared about people dying around the world in our name and about the environmental havoc we were wreaking on our world.
Now, we are in a war in Iraq. The Democrats are in control in congress and we were suppose to be making progress in bringing our troops home. There was a lot of hope in the air in November 2006. What we have instead is an increase in the number of troops and a further escalation of the War. What should be obvious to us is that we have no intention of leaving Iraq and letting Iraqis decide what should be done with their oil. The number one benchmark is that the Iraqi Parliament must pass the oil law allowing foreign ownership of their oil. We are doing the multinationals biddings in this war. As usual, it is all about profit and these profits put our congresspeople into their positions and promise to keep them there as long as they continue to do the bidding of the primary wealth holders of the world. So, we are not leaving Iraq anytime soon. We will have a presence there until the oil is gone. We might not call it an occupation at some point in the future, but the Iraqi people will suffer under our influence and for our lifestyles for many years to come. So, Why am I not part of the Netroots working the channels for change, naively campaigning for the democrats to defund the war, or marching on Washington all by my lonesome intent upon attaining change.
Because I no longer care. I cannot keep caring for the lives of others around the world. I only have a water pistol and I cannot put out all the fires - let alone one of them. So, now, I grow a garden and I don't own a cellphone and I'm not hooked up to cable and I drive a Toyota Echo. I know, I am still, plenty plugged into the system. I have my job to pay back debt through student loans. I still use gasoline and buy it cheap when you consider the lives lost to get that oil to America. I have way more stuff than any one person needs. But, slowly I am unplugging myself from the pecuniary economy. I am not going to rely upon experts to tell me how to feel or how to vote for different initiatives around the world. I only see a small part of the world and I know how I can make that small part a better place for me, my family and the surrounding community which remains small in comparison to the global world we think about today that has not gotten one bit smaller despite the technological innovations we have today. I can grow my garden and reduce the amount of fuel for the transportation of food around the world. I don't use chemical fertilizers or pesticides. I don't watch the news anymore and I read the papers with the eyes of a skeptic.
Some experts accuse my withdrawal from the political realms of the antiwar voices as a sign of apathy that ends up contributing to the war effort. And other experts accuse the antiwar voices as giving hope to the enemies in Iraq and endangering the lives of our soldiers. I am tired of listening to either side. I don't want to be a part of it anymore. I am going to reduce my footprint on the world and stop supporting the corporations and the financial wealth holders who profit off of the killing. I am not going to listen to the opinions of experts informing of conditions at locations on the planet that are far removed from my community. The world will be a better place when we trust that local communities around the world know how best to use their local resources for the benefit of their local community. I became interested in economics because I believed that money would explain a lot about the forces that guide policy in America. I still believe that and any advice that suggests following the money is good advice.
But Real wealth is not money. Wealth is influence and the control over resources. Wealth is synonymous with power. And we allow a few people to have power over us by giving them influence and letting the idea of money and our financial security be the prime motivator for our lives. Somehow we have to take back that power. If I can (or if you can) take back the control over the food you put into your body, I and anyone else, takes the first step toward redistributing wealth in this country. Redistributing wealth through Democratic initiatives won't solve the underlying problems in our society. Instead, we have to take back the land from the corporations and grow our own food in ways that are environmentally and ecologically sound. We can do this by taking care of a piece of land we own that is under our care. A garden is the first step.
When I was in graduate school pursuing a PhD in Economics, I was assigned to teach an Introductory Economics course for my assistantship requirements. I assigned my students twice-weekly readings of Paul Krugman's column in the New York Times editorial page. Of course, his column were political and I risked being accused of endorsing a Liberal agenda and swaying young minds, but Krugman was also an economist and his columns often gave a political perspective from an economic point of view. I was careful to focus in on the economic aspects of his columns and left the political portion open to discussion without criticizing or endorsing his opinions.
Upon leaving graduate school, the New York times began offering a paid service called Timeselect and Krugman's column was temporarily beyond my reach. I was ecstatic to learn the Timeselect was being cancelled a week ago and I could access Krugman's column and blog once more at the New York Times online page.
Krugman has a new book coming out with the same title as his blog "The Conscious of a Liberal." In the Introduction to his Blog, Krugman describes the growing inequities of income in the US. There is little doubt that the current disparities in income between the haves and the have-nots in our society - as well as around the globe - is troubling, to say the least. But Krugman appears to endorse a view that the recent trend, beginning with the Reagan administration, is a return to the previous days in America described as the Gilded age when robber barrens controlled the wealth of industry and had vast influence over political discourse in the US. Under this view, the depression era and post-war build-up of Government infrastructure supporting liberal agendas created an aberration in US history where wealth was distributed more equitably among the members of out society. This was the result of investment in public education, liberal legislation supporting unions and working families, and many other government programs and initiatives. Generally, I am in support of this view - but I also think it only tells part of the story leading to the solution of returning to more government run programs.
While income was distributed more evenly in American society during the great achievements of the post war liberal era, there was also a continuing migration from rural areas to urban and suburban areas as many Americans left income poor, yet self-reliant, households in rural America. This left vast rural areas in the control of large agricultural conglomerates with no ties to the people in these previously resilient communities.
These thriving rural communities may have been populated by households that were described as low income, but as my Grandma said of life on the farm, “We didn’t have no money, but we were never hungry.” The economies in these rural areas were kept aloft through the informal economy that could not be described with income. It can be better illuminated in the oownership records with many small farms owned by individuals with little income, still living pleasant and comfortable lives through their interconnected relationships and economic transactions with the community that were not pecuniary in nature. These transactions can be described as bartering, work-sharing, cooperatives, gifts and neighborliness. What makes the inequality in America today much more daunting than the inequality of the past is the reliance upon income over relationships amongst our neighbors.
In effect, although this postwar liberal era can be seen as a panacea through many lenses - the result of large government projects and initiatives - the liberal policies also contributed (and continue to contribute) to the loss of our rural communities and economies to the economic incentives of greater profits through the capture of economic transactions that previously were not part of the formal economy. Today we see the same trends in privatization in security, warfare, disaster relief and education. A closer look at Krugman's analysis might reveal a coup whereby liberal policies built up large government infrastructures through tax payer dollars enticing waves of Americans from rural areas to abandoned their communities and self-reliant lifestyles for the income supported lives of our modern era. Now the government (which is vastly subservient to corporate agendas) has began the process of selling (giving away) this infrastructure to the wealthy few - leaving in place a huge and much more chilling corporate/military infrastructure designed to serve the money interests while leaving citizens without income, property or the means to sustain themselves.
All of this leads to the current situation with the Eric Prince lead Blackwater along with other security firms. Imagine a future where the Generals are competing with CEO's for government funds. We may be witnessing the onset of the second civil war if congress begins the process of reducing these private mercenary companies. Eric Prince and his family have given vast sums of money to Republican campaigns with radical Christian and nonconservative agendas. He has given zero dollars to democrats. He is in control of the worlds largest private military and is being questioned by a democratic congress. It has the makings of a great Science fiction novel at the very least.