It made sense two centuries ago to describe the theories and practices of the world of finance as political economy.
Politics, as we have just seen in the past couple of months, play just as important a role in the economy as economic factors, such as employment and interest rates. When discord dominates the halls of Congress, the economy is bound to suffer; sound-bite declarations replace thoughtful solutions.
Whatever ails the world affects our country, and whatever ails our country affects every little village or city, since we rely on banks and mortgages that are internationally invested, federally controlled, even when locally serviced. As such, as disgusted as we are with our leaders, we need to speak out and give them advice before electing others.
Though we teach in philosophy that every argument has a counter-argument, that every position can be opposed by an equally strong or valid one, there are times when this is not true.
Some arguments are invalid, because their premises are false or their structure is faulty. Some arguments are irrelevant when lives are at stake.
To say, then, that the Bush and Obama administrations’ TARP was a failure because it bailed out banks to stabilize and stimulate the economy in a way that didn’t filter downward is telling only part of the story.
The other part was the “cash for clunkers” program that had an immediate ripple effect on the reduction of pollution, conservation of energy and retaining manufacturing jobs. The smallest of investments produced the biggest bang for the bucks! Who knew?
Negotiation is commonly understood as a zero-sum game, where opponents find a middle-ground on which they agree. Of course there is posturing and grand-standing, bravado and chest-pounding, but at the end of the day, a compromise is achieved.
If President Obama intends to lead the country before the next election rather than become irrelevant, he must find ways to lead with informed compromises, to lead as if the fate of the country is at stake, not simply his own re-election.
Since the economy is influenced by politics (We didn’t need S&P’s downgrading to remind us of this fact), let’s be politically careful, ideologically honorable, and above all, prudent. Prudence, after all, ensures survival, not principled stubbornness, even when principles are compromised.
As some military historians remind us, if Hitler wasn’t as insistent on continuing his march eastward to beat the Soviet Union, he may not have lost World War II. Likewise, all the so-called socialist policies of the former Soviet Union or China have proven disastrous in their infatuation with heavy investments on armaments and heavy industries. Ideological narrow-mindedness leads to economic ruin.
Economic solutions to economic problems are not that complicated if the will to look at the big picture for long-term solutions exists. We know how to reduce burdensome regulations, close tax loopholes, increase exports, build infrastructure, create jobs.
Legalizing immigration and charging $100,000 per entry, for example, would raise billions over time. Likewise, legalizing marijuana would decrease legal costs and raise millions in tax revenue. How about combining most counties in the state and in some cases consolidating them within existing city governance?
Any other ideas, anyone? Desperate times call for desperate measures. No idea is too silly to be aired.
Some theories are politically or ideologically informed, and as such are unscientific (untestable): They prove what they assume rather than find out the outcome after facts are examined. Let’s not repeat the folly of Arthur Laffer of the Reagan era who served an ideology, but come up instead with creative solutions, regardless of political affiliation.
Instead of asking: Why can’t we all get along? We should ask: What is the right course of action for the nation? If we don’t know the answer, let’s adopt a trial-and-error methodology, piecemeal engineering, as Karl Popper suggested. This would add humility to our public discourse and replace the arrogance of millionaire politicians. If President Obama or any other member of Congress ends up not being re-elected, it’s a cheap price to pay to improve our economy.
As the latest political squabbles illustrated, our democracy does work. It’s a messy process that brings out ugliness, discord and deep-seated emotions. There is nothing wrong with that as long as it’s constructive. Unless we want a dictatorship, this is the price we must pay: listening to extreme views we abhor. Who knows, perhaps among the cacophony of economic advice, a sweet note of brilliance will emerge to set us straight.
Bill Cosby is reputed to have said: “I don’t know the key to success, but the key to failure is trying to please everybody” He might be right.
Raphael Sassower is professor of philosophy at UCCS and is the author of Postcapitalism (2009). He can be reached at firstname.lastname@example.org Previous columns are at sassower.blogspot.com