Jeffrey Sachs is an interesting case. Obviously a brilliant academic, and in many ways a prime member of the economic establishment, he was involved in designing the so-called shock therapies administered 20-25 years ago to countries in financial difficulties, with disputed results. That is, the numbers look good — Bolivian inflation fell from 20,000% per year to 11% — but the resulting benefits may not have been fairly distributed. Of course it’s hard to know to what degree a single economist could influence that standard human course of action.
Nowadays Sachs is a consultant to UN Secretary-General Ban Ki-moon, and has become known as a promoter of not-quite-establishment ideas like environmental sustainability and poverty alleviation, in the process befriending Bono and Angelina Jolie. A celebrity economist for the slightly left of center crowd, in other words.
So it’s not surprising he’s pissed about Obama’s most recent giveaway. But he’s more than miffed; he’s predicting that the present course will generate a growing backlash, eventually resulting in a third party if the Democrats don’t change their ways.
This may take time. The level of political corruption in America is staggering. Everything now is about money to run electoral campaigns, which have become incredibly expensive. The midterm elections cost an estimated $4.5 billion, with most of the contributions coming from big corporations and rich contributors. These powerful forces, many of which operate anonymously under US law, are working relentlessly to defend those at the top of the income distribution.
But make no mistake: Both parties are implicated. There is already talk that Obama will raise $1 billion or more for his reelection campaign. That sum will not come from the poor.
The problem for the rich is that, other than military spending, there is no place to cut the budget other than in areas of core support for the poor and working class. Is America really going to cut health benefits and retirement income? Will it really balance the budget by slashing education spending at a time when US students already are being outperformed by their Asian counterparts? Will America really let its public infrastructure continue to deteriorate? The rich will try to push such an agenda, but ultimately they will fail.
It’s a hopeful outlook, at least. But he points out that the rich start this conflict with a big advantage:
…the richest 1 percent of American households now has a higher net worth than the bottom 90 percent. The annual income of the richest 12,000 households is greater than that of the poorest 24 million households.
This is openly class warfare being discussed by a former Harvard and current Columbia economics guru. I wonder what his fellow Columbia and Harvard graduate in the White House thinks of such a strategy. Sure would change things…