December 28, 2010
A Dissenting Establishmentarian

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…

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Posted by Chuck Dupree at December 28, 2010 10:02 PM
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I think the country is desperately in need of a third party. It can be called the "Poor People's Party". I'm convinced my 2012 vote will confirm my thinking, because no matter what the lame duck congress accomplished, Obama's policies regarding executive power, state's secrets, imprisoning people without charges, and the rest are too similar to the Bush administration's policies. Secondly, I do believe Obama took his pledge to "change" Washington off the table as soon as he took the oath of office.

Maybe Obama should aim for a 1.5 billion dollar campaign war chest because he will need it to convince me he deserves my vote again.

Posted by: Pat on December 29, 2010 4:51 AM

I've voted all my life for the Democratic candidates for President; but never again. The Republican politicians have [mostly] terrible social/religious "philosophies"; but they do --sort-of--in recognizable code language, reveal their beliefs to the public. Obama has shown himself to be the Elmer Gantry, in reality nothing but the adept follower of the standard "route to personal private/corporate riches" --"revolving door" modern American Government. Upon his taking the oath of office as President of the United States, he knew he had achieved "apprentice" level; and subsequently his natural performance has been squarely aimed at acquiring "journeyman" status on his road hopefully to joining, or at least being allowed to associate with, the ruling class. He has revealed no other competing beliefs.
So we need a second party-to replace the Democratic Party, the demise of which Obama is performing as smooth-talking funeral director.

Posted by: Hoffmann on December 29, 2010 7:58 AM

I get a real kick out of economists that are so totally blind to reality that they can come out with pure unadulterated ignorant nonsense.

When 8 out of 9 Supreme Joke "justices" are graduates or have attended only two universities, the poor are definitely screwed.

When 6 out of 9 Jokes are catholic, it might skew the decisions toward the right.

When the Supreme Joke could give corporations unlimited funding rights, then a free and open market is not even a fairy tale.

Somewhere someone is going to get the Supreme Joke out of politics? Not going to happen.

Posted by: Economics is amusing on December 29, 2010 1:34 PM

I recall sitting on a bus and reading that Sachs was on his way to fix the economy of the new post-USSR Russia. Haven't those people suffered enough? I wondered.

I wouldn't trust a word that man says. At best, he's a classic "true believer."

Posted by: JoyfulA on January 1, 2011 9:45 PM
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