I've argued this narrative recently that as liberals we should be glad we're Americans these days. We used to look to Europe with envy for their much stronger welfare state. Then there were the Bush years where W made us the laughing stock of the world in many ways.
However, at this point I'd argue that the progressive future is much brighter in America than elsewhere. Sure the French, the Germans and other Northern European countries have better welfare states-even Britain is better; but it's impossible to envy Britain today between David Cameron, the rise of the Scottish Independence Party, Labor may be doomed. Both Labor and Britain-if Scotland leaves Great Britain will be a lot less 'great.'
However, things are going in the right direction in the US and in the wrong direction in Europe. The reason for this is very clear: the EU. There are 2 big problems with the EU:
1. The euro monetary union without fiscal union
2. The inherently undemocratic nature of the EU itself. Considering that few countries have voted to get in it how does the EU feel it has the right to command national governments?
Bill Mitchell has a good piece about when the left failed to fight austerity. He mentions an influential book in the 70s that had the wrong thinking in it.
"In the Introduction to the 2009 reprint of his book by Transaction Publishers, we read that:
"The state has three ways to finance increased budgetary outlays: create state enterprises that produce social expenditures; issue debt and borrowing against future tax revenues; raise taxes and introduce new taxes. None of these mechanisms are satisfactory. Neither the development of state enterprise nor the growth of state debt liberates the state from fiscal concerns. Similarly, tax finance is a form of economic exploitations and thus a problem for class analysis."
"Consistent with his Marxist leanings, O’Connor believed that the government would increasingly place the tax burden on the working class, which would heighten the class conflict inherent in American capitalism. He also recognised that the working class was being subjected to ‘divide and conquer’ strategies by capital, which undermined their capacity to organise effectively and defend their shares of national income."
"But, even though his focus on the distribution conflicts by class of his alleged crisis are worthy in themselves, he effectively adopted the mainstream macroeconomic notion that a currency-issuing government is financially constrained."
"While that was true during the Bretton Woods fixed exchange-rate system, where governments had to constrain their expenditures to meet the central bank requirements to sustain the currency parity, it was certainly not true after 1971, when President Nixon, effectively ended the gold convertibility and floated the US dollar."
"It appears that O’Connor didn’t grasp the significance of what happened in August 1971 and proceeded as if nothing significant had changed."
"In fact, the body of teaching in undergraduate macroeconomics courses that students are subjected to today also reflects a failure by the authors of those textbooks to appreciate what actually happened in August 1971. The chapters on public finance in those textbooks and the articulation of the so-called fiscal constraints that governments face are irrelevant in the modern fiat currency monetary systems."
"The main point of the blog is that by adopting the mainstream view that a currency-issuing government (in the era of fiat currencies) was financially constrained and could not run continuous fiscal deficits he failed to create a new theory of the state fiscal relations that would underpin a coherent and powerful ‘left’ narrative."
"At the time, his work and related work by other ‘left’ writers, was very powerful and, seemingly, scared the bejesus out of those on the ‘left’, who may or may not have been attracted, at least in part, to the mechanics of ‘Keynesian’ economics and the obvious empirical fact that it had been used successfully for several decades in the Post World War 2 period, to sustain rising real incomes for workers, full employment and income-support safety nets of various levels of generosity across the advanced world."
"In the period following the publication of the Fiscal Crisis of the State a myriad of left-wing and socialist orientated articles, academic papers, books emerged which reflected the fact that the authors had begun to absorb the underlying message – that currency-issuing governments were financially constrained."
http://bilbo.economicoutlook.net/blog/?p=31403#more-31403
I agree with that but I think another side to it is the unthking allegiance of the Left to 'Europe' which I can see from many leftist comments still seems to think 'But for the Grace of the EU Germany will start WWIII,'
"Germany, frustrated by the failure of intergovernmental negotiation to deliver a federal Europe, has chosen to use its economic might to establish the federal Europe it has always craved. It is a difficult course, but the alternatives are not obvious. It is surprising that Owen Jones thinks leftwing progressives should give up on fighting neoliberal ideology in Europe but can win the battle by retreating to the home front, a la Ukip, in the most neoliberal of all the 28 member states, albeit one not shackled by the weaknesses of an ill-devised monetary union."
http://diaryofarepublicanhater.blogspot.com/2015/07/should-left-abandon-eu.html
There had better be an alternative when you see what Germany really has in mind:
http://diaryofarepublicanhater.blogspot.com/2015/07/wolfgang-shauble-unveils-fourth-reich.html
The old leftist euroskepticism has proven right:
"The list goes on, and it is growing. The more leftwing opponents of the EU come out, the more momentum will gather pace and gain critical mass. For those of us on the left who have always been critical of the EU, it has felt like a lonely crusade. But left support for withdrawal – “Lexit”, if you like – is not new. If anything, this new wave of left Euroscepticism represents a reawakening. Much of the left campaigned against entering the European Economic Community when Margaret Thatcher and the like campaigned for membership."
"It would threaten the ability of leftwing governments to implement policies, people like my parents thought, and would forbid the sort of industrial activism needed to protect domestic industries. But then Thatcherism happened, and an increasingly battered and demoralised left began to believe that the only hope of progressive legislation was via Brussels. The misery of the left was, in the 1980s, matched by the triumphalism of the free marketeers, who had transformed Britain beyond many of their wildest ambitions, and began to balk at the restraints put on their dreams by the European project."
"We have watched our friends on the Left apologise for 1930s policies. We have seen them defend a regime of pro-cyclical fiscal cuts imposed on the whole eurozone by a handful of "Ordoliberal" reactionaries in the German finance minstry."
However, at this point I'd argue that the progressive future is much brighter in America than elsewhere. Sure the French, the Germans and other Northern European countries have better welfare states-even Britain is better; but it's impossible to envy Britain today between David Cameron, the rise of the Scottish Independence Party, Labor may be doomed. Both Labor and Britain-if Scotland leaves Great Britain will be a lot less 'great.'
However, things are going in the right direction in the US and in the wrong direction in Europe. The reason for this is very clear: the EU. There are 2 big problems with the EU:
1. The euro monetary union without fiscal union
2. The inherently undemocratic nature of the EU itself. Considering that few countries have voted to get in it how does the EU feel it has the right to command national governments?
Bill Mitchell has a good piece about when the left failed to fight austerity. He mentions an influential book in the 70s that had the wrong thinking in it.
"In the Introduction to the 2009 reprint of his book by Transaction Publishers, we read that:
"The state has three ways to finance increased budgetary outlays: create state enterprises that produce social expenditures; issue debt and borrowing against future tax revenues; raise taxes and introduce new taxes. None of these mechanisms are satisfactory. Neither the development of state enterprise nor the growth of state debt liberates the state from fiscal concerns. Similarly, tax finance is a form of economic exploitations and thus a problem for class analysis."
"Consistent with his Marxist leanings, O’Connor believed that the government would increasingly place the tax burden on the working class, which would heighten the class conflict inherent in American capitalism. He also recognised that the working class was being subjected to ‘divide and conquer’ strategies by capital, which undermined their capacity to organise effectively and defend their shares of national income."
"But, even though his focus on the distribution conflicts by class of his alleged crisis are worthy in themselves, he effectively adopted the mainstream macroeconomic notion that a currency-issuing government is financially constrained."
"While that was true during the Bretton Woods fixed exchange-rate system, where governments had to constrain their expenditures to meet the central bank requirements to sustain the currency parity, it was certainly not true after 1971, when President Nixon, effectively ended the gold convertibility and floated the US dollar."
"It appears that O’Connor didn’t grasp the significance of what happened in August 1971 and proceeded as if nothing significant had changed."
"In fact, the body of teaching in undergraduate macroeconomics courses that students are subjected to today also reflects a failure by the authors of those textbooks to appreciate what actually happened in August 1971. The chapters on public finance in those textbooks and the articulation of the so-called fiscal constraints that governments face are irrelevant in the modern fiat currency monetary systems."
"The main point of the blog is that by adopting the mainstream view that a currency-issuing government (in the era of fiat currencies) was financially constrained and could not run continuous fiscal deficits he failed to create a new theory of the state fiscal relations that would underpin a coherent and powerful ‘left’ narrative."
"At the time, his work and related work by other ‘left’ writers, was very powerful and, seemingly, scared the bejesus out of those on the ‘left’, who may or may not have been attracted, at least in part, to the mechanics of ‘Keynesian’ economics and the obvious empirical fact that it had been used successfully for several decades in the Post World War 2 period, to sustain rising real incomes for workers, full employment and income-support safety nets of various levels of generosity across the advanced world."
"In the period following the publication of the Fiscal Crisis of the State a myriad of left-wing and socialist orientated articles, academic papers, books emerged which reflected the fact that the authors had begun to absorb the underlying message – that currency-issuing governments were financially constrained."
http://bilbo.economicoutlook.net/blog/?p=31403#more-31403
I agree with that but I think another side to it is the unthking allegiance of the Left to 'Europe' which I can see from many leftist comments still seems to think 'But for the Grace of the EU Germany will start WWIII,'
"Germany, frustrated by the failure of intergovernmental negotiation to deliver a federal Europe, has chosen to use its economic might to establish the federal Europe it has always craved. It is a difficult course, but the alternatives are not obvious. It is surprising that Owen Jones thinks leftwing progressives should give up on fighting neoliberal ideology in Europe but can win the battle by retreating to the home front, a la Ukip, in the most neoliberal of all the 28 member states, albeit one not shackled by the weaknesses of an ill-devised monetary union."
http://diaryofarepublicanhater.blogspot.com/2015/07/should-left-abandon-eu.html
There had better be an alternative when you see what Germany really has in mind:
http://diaryofarepublicanhater.blogspot.com/2015/07/wolfgang-shauble-unveils-fourth-reich.html
The old leftist euroskepticism has proven right:
"The list goes on, and it is growing. The more leftwing opponents of the EU come out, the more momentum will gather pace and gain critical mass. For those of us on the left who have always been critical of the EU, it has felt like a lonely crusade. But left support for withdrawal – “Lexit”, if you like – is not new. If anything, this new wave of left Euroscepticism represents a reawakening. Much of the left campaigned against entering the European Economic Community when Margaret Thatcher and the like campaigned for membership."
"It would threaten the ability of leftwing governments to implement policies, people like my parents thought, and would forbid the sort of industrial activism needed to protect domestic industries. But then Thatcherism happened, and an increasingly battered and demoralised left began to believe that the only hope of progressive legislation was via Brussels. The misery of the left was, in the 1980s, matched by the triumphalism of the free marketeers, who had transformed Britain beyond many of their wildest ambitions, and began to balk at the restraints put on their dreams by the European project."
http://diaryofarepublicanhater.blogspot.com/2015/07/should-left-abandon-eu.html
I certainly don't know what the answer is for Britain-the liberals of Britain have to somehow convince the Scotts that they don't want to leave Britain. Certainly there is nothing the EU can do about it unless they have the power to not allow Scotland to leave. It seems that many British leftists would rather try their hand at being run by Germany after all.
I don't see how you oppose austerity though and yet support the euro. So the conservative Ambrose Pritchard gets it right:
"To the extent that these gentlemen know what they are doing - and most Nobel economists would dispute that - they have certainly not risen to the challenge of pan-EMU leadership. As ex-official Philippe Legrain writes in Foreign Policy, Germany is proving to be a "calamitous hegemon".
"By a twist of fate, the Left has let itself become the enforcer of an economic structure that has led to levels of unemployment once unthinkable for a post-war social democratic government with its own currency and sovereign instruments. It has somehow found ways to justify a youth jobless rate still running at 42pc in Italy, 49pc in Spain and 50pc in Greece, despite mass emigration."
"It has acquiesced in the Long Slump of the past six years, deeper in aggregate than the span from 1929 to 1935."
"By a twist of fate, the Left has let itself become the enforcer of an economic structure that has led to levels of unemployment once unthinkable for a post-war social democratic government with its own currency and sovereign instruments. It has somehow found ways to justify a youth jobless rate still running at 42pc in Italy, 49pc in Spain and 50pc in Greece, despite mass emigration."
"It has acquiesced in the Long Slump of the past six years, deeper in aggregate than the span from 1929 to 1935."
"It meekly endorsed the EU Fiscal Compact, knowing that it imposes a legal requirement on eurozone states to slash their public debt by 1.5pc of GDP in France, 2pc in Spain and 3.5pc in Italy and Portugal, every year for the next two decades - a formula for near permanent depression. It outlaws Keynesian economics, and indeed classical economics. It is a doomsday construct."
http://diaryofarepublicanhater.blogspot.com/2015/07/time-for-european-left-to-lexit.html
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