Friday, June 10, 2011
Populism in the NYTimes: Krugman denounces Creditor Class, (almost) calls for Jubilee
Surprising article (http://www.nytimes.com/2011/06/10/opinion/10krugman.html) by Paul Krugman nailing the cause of our economic malaise squarely on its head: the Rentier Class. Rentiers is an archaic word for the asset-owners and creditors, the people who don't do any work but profit wholly from money and their ability to drive up prices for things people need.
A sane society would make their economic activities illegal. They are economic parasites, living off of the production of others, contributing nothing.
Krugman calls them out as having hijacked the political process. Public policy now favors creditors, and the rentier class in general, continuing to squeeze the average worker and small business owner. As he puts it:
"Consciously or not, policy makers are catering almost exclusively to the interests of rentiers — those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else's expense."
Krugman Calls for Jubilee?
Krugman even admits that debt relief could do a lot to promote overall economic recovery. Dare we say he is on board with the Jubilee solution? Reading this quote, it appears he is almost there:
"But the reality is just the opposite: creditor-friendly policies are crippling the economy. This is a negative-sum game, in which the attempt to protect the rentiers from any losses is inflicting much larger losses on everyone else. And the only way to get a real recovery is to stop playing that game."
Other choice quotes:
"While the ostensible reasons for inflicting pain keep changing, however, the policy prescriptions of the Pain Caucus all have one thing in common: They protect the interests of creditors, no matter the cost. ... No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios."
How They Maintain Their Power
Krugman offers only the most superficial analysis of how this Rentier Class maintains their hegemony on political power, but he is correct insofar as his analysis goes:
"And that explains why creditor interests bulk so large in policy; not only is this the class that makes big campaign contributions, it's the class that has personal access to policy makers — many of whom go to work for these people when they exit government through the revolving door. The process of influence doesn't have to involve raw corruption (although that happens, too). All it requires is the tendency to assume that what's good for the people you hang out with, the people who seem so impressive in meetings — hey, they're rich, they're smart, and they have great tailors — must be good for the economy as a whole."
Posted by Justin at Friday, June 10, 2011