Neo-liberalism and Ed Deform and Krugman on Rand Paul's "Better Dead than Fed"

Ed Deform's connection to neo-liberalism can be defined in one dirty word: CHOICE

CORE in Chicago began with 8 people reading Naomi Klein's "Shock Doctrine" to try to make sense of what was being done to the schools because so much of it didn't make sense educationally or even rationally, the idea of a grander privatization conspiracy began to make sense. In fact, the only thing that made sense.

Paul Krugman nailed Rand Paul and others of his ilk to the wall in Monday's column, Milton Friedman, Unperson. Some people connect Friedman to the emergence of neoliberalism (see Naomi Klein's Shock Doctrine - movie is here) and thus, ed deform which is based on NL.

Krugman doesn't use the term "neoliberal" but has referred to the concept of "shock doctrine" in a 2011 column on Wisconsin's assault on unions where he does give Klein her dibs:

The story of the privatization-obsessed Coalition Provisional Authority [in Iraq] was the centerpiece of Naomi Klein’s best-selling book “The Shock Doctrine,” which argued that it was part of a broader pattern. From Chile in the 1970s onward, she suggested, right-wing ideologues have exploited crises to push through an agenda that has nothing to do with resolving those crises, and everything to do with imposing their vision of a harsher, more unequal, less democratic society. Which brings us to Wisconsin 2011, where the shock doctrine is on full display.

Remember, CORE in Chicago began with 8 people reading Klein's book to try to make sense of what was being done to the schools because so much of it didn't make any sense educationally, the idea of a grander privatization conspiracy began to make sense. In fact, the only thing that made sense.

Before I go on with Krugman's discussion of Milton Friedman, who called for the end of a public school system, I want to point to a thought I've been having: that basically we are seeing that many Republicans and Democrats are ideologically neo-liberals. Obama, the Clintons and so are in many ways are our union leaders, with Randi Weingarten leading the pack. In other words, you won't see UFT/AFT leaders placing the blame where it is due but instead putting it on individuals: Joel Klein, Bloomberg etc instead of educating the membership as what is really happening so they can be better equipped to defend themselves.

[By the way - look at handing principals unfettered power over the staff and Tweed's often non-intervention no matter how abusive the principal is, as the mini form of neo-liberalism.]

Here is some more info on neo-liberalism, a different animal from what is viewed as "left" leaning liberals in this country.

In the U.S. political liberalism has been a strategy to prevent social conflict. It is presented to poor and working people as progressive compared to conservative or Rightwing. Economic liberalism is different. Conservative politicians who say they hate "liberals" -- meaning the political type -- have no real problem with economic liberalism, including neoliberalism.
"Neo" means we are talking about a new kind of liberalism. So what was the old kind? The liberal school of economics became famous in Europe when Adam Smith, an Scottish economist, published a book in 1776 called THE WEALTH OF NATIONS. He and others advocated the abolition of government intervention in economic matters. No restrictions on manufacturing, no barriers to commerce, no tariffs, he said; free trade was the best way for a nation's economy to develop. Such ideas were "liberal" in the sense of no controls. This application of individualism encouraged "free" enterprise," "free" competition -- which came to mean, free for the capitalists to make huge profits as they wished.

See Afterburn for more tenets of neoliberalism and you will recognize so much of ed deform policy.

Now, back to Krugman's piece where he contrasts the libertarianism of Rand Paul with Milton Friedman, actually making Friedman look rational.

August 11, 2013

Milton Friedman, Unperson

By PAUL KRUGMAN

Recently Senator Rand Paul, potential presidential candidate and self-proclaimed expert on monetary issues, sat down for an interview with Bloomberg Businessweek. It didn’t go too well. For example, Mr. Paul talked about America running “a trillion-dollar deficit every year”; actually, the deficit is projected to be only $642 billion in 2013, and it’s falling fast.

But the most interesting moment may have been when Mr. Paul was asked whom he would choose, ideally, to head the Federal Reserve and he suggested Milton Friedman — “he’s not an Austrian, but he would be better than what we have.” The interviewer then gently informed him that Friedman — who would have been 101 years old if he were still alive — is, in fact, dead. O.K., said Mr. Paul, “Let’s just go with dead, because then you probably really wouldn’t have much of a functioning Federal Reserve.” 

OK, we've established Rand Paul is an idiot. But Krugman does some interesting analysis of where the right wing Republican nut jobs have gone:

What ever happened to Friedman’s role as a free-market icon? The answer to that question says a lot about what has happened to modern conservatism. For Friedman, who used to be the ultimate avatar of conservative economics, has essentially disappeared from right-wing discourse. Oh, he gets name-checked now and then — but only for his political polemics, never for his monetary theories. Instead, Rand Paul turns to the “Austrian” view of thinkers like Friedrich Hayek — a view Friedman once described as an “atrophied and rigid caricature” — while Paul Ryan, the G.O.P.’s de facto intellectual leader, gets his monetary economics from Ayn Rand, or more precisely from fictional characters in “Atlas Shrugged.”

How did that happen? Friedman, it turns out, was too nuanced and realist a figure for the modern right, which doesn’t do nuance and rejects reality, which has a well-known liberal bias.One way to think about Friedman is that he was the man who tried to save free-market ideology from itself, by offering an answer to the obvious question: “If free markets are so great, how come we have depressions?”

Until he came along, the answer of most conservative economists was basically that depressions served a necessary function and should simply be endured. Hayek, for example, argued that “we may perhaps prevent a crisis by checking expansion in time,” but “we can do nothing to get out of it before its natural end, once it has come.” Such dismal answers drove many economists into the arms of John Maynard Keynes.

Friedman, however, gave a different answer. He was willing to give a little ground, and admit that government action was indeed necessary to prevent depressions. But the required government action, he insisted, was of a very narrow kind: all you needed was an appropriately active Federal Reserve. In particular, he argued that the Fed could have prevented the Great Depression — with no need for new government programs — if only it had acted to save failing banks and pumped enough reserves into the banking system to prevent a sharp decline in the money supply.

This was, as I said, a move toward realism (although it looks wrong in the light of recent experience). But realism has no place in today’s Republican Party: both Mr. Paul and Mr. Ryan have furiously attacked Ben Bernanke for responding to the 2008 financial crisis by doing exactly what Friedman said the Fed should have done in the 1930s — advice he repeated to the Bank of Japan in 2000. “There is nothing more insidious that a country can do to its citizens,” Mr. Ryan lectured Mr. Bernanke, “than debase its currency.”

Oh, and while we’re on the subject of debasing currencies: one of Friedman’s most enduring pieces of straight economic analysis was his 1953 argument in favor of flexible exchange rates, in which he argued that countries finding themselves with excessively high wages and prices relative to their trading partners — like the nations of southern Europe today — would be better served by devaluing their currencies than by enduring years of high unemployment “until the deflation has run its sorry course.” Again, there’s no room for that kind of pragmatism in a party in which many members hanker for a return to the gold standard.

Now, I don’t want to put Friedman on a pedestal. In fact, I’d argue that the experience of the past 15 years, first in Japan and now across the Western world, shows that Keynes was right and Friedman was wrong about the ability of unaided monetary policy to fight depressions. The truth is that we need a more activist government than Friedman was willing to countenance.

The point, however, is that modern conservatism has moved so far to the right that it no longer has room for even small concessions to reality. Friedman tried to save free-market conservatism from itself — but the ideologues who now dominate the G.O.P. are beyond saving.

When Krugman says, "The truth is that we need a more activist government than Friedman was willing to countenance," he is talking about economic intervention. The education community has seen the disaster capitalism of an activist federal, state and local government and I wish Krugman would one day give his attention to that. The common core has put both the anti-ed deform real reformers and the ultra-right anti-government wing-nuts (Glenn Beck) on the same side.

If Krugman could untangle that know he should get another Nobel Prize.

AFTERBURN 
Note how the merger mania in the airlines leads to LESS choice, higher prices and worse service. Whatever works for profits.

Some tenets of neo-liberalism as described by Elizabeth Martinez and Arnoldo Garcia at CORP WATCH:

The main points of neo-liberalism include:

1. THE RULE OF THE MARKET. Liberating "free" enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers' rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say "an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone." It's like Reagan's "supply-side" and "trickle-down" economics -- but somehow the wealth didn't trickle down very much.
   
2. CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care. REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance of roads, bridges, water supply -- again in the name of reducing government's role. Of course, they don't oppose government subsidies and tax benefits for business.
   
3. DEREGULATION. Reduce government regulation of everything that could diminsh profits, including protecting the environment and safety on the job.
   
4. PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs.
   
5. ELIMINATING THE CONCEPT OF "THE PUBLIC GOOD" or "COMMUNITY" and replacing it with "individual responsibility." Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves -- then blaming them, if they fail, as "lazy."