The 2016 election changes everything

In my penultimate three-hour lecture to my college seniors each year, I exhort my students to see how the neoliberal globalization agenda has been disingenuous about the harm that has come to the working class in the US.  Neoclassical economists (among whom I am numbered) have consistently advanced a free trade agenda -- and for compelling reasons -- but we have failed to ensure that policy makers understand that there are losers as well as winners in the globalization game, and the case for free trade includes the requirement that winners compensate losers at the end of the day.

This is not a minor matter. In fact, as has been shown by Dani Rodrik and others, for every one dollar gained in free trade, five dollars are redistributed.  If anything, the true impacts of free trade are primarily about “redistribution” and only secondarily about greater overall efficiency and aggregate economic activity.

I remind my students that there is no honest economic case for free trade without an effective system for ensuring that the so-called Kaldor-Hicks compensations (transfers from winners to losers) are made in some form.  Further, the evidence is clear: those compensations are rarely made.

I have been working in this area for decades, and I show them carefully and extensively how the postwar bargain between the political elite and organized labor was prescient – some, with the help of an elderly Keynes, actually expected this to happen.  Shortly after World War II there emerged a thoughtful social contract, including social safety nets, to compensate labor for those expected gains to multinational businesses and investors.

Globalization would give business increased profit opportunities and political elites some insurance against a third world war (the decline in global integration in the interwar years was thought a contributory factor to WW2), and the post war social bargain would compensate labor for the loss of economic bargaining power and the increased economic risks they would endure over time.  Unemployment insurance, labor union protections (the UN Declaration of Human Rights soon followed, listing the right to organize into unions as a fundamental human right), continued old-age public pension programs (such as social security in the US), and health care programs (such as the National Health Service in the UK) were put in place.

I go on to show my students that from the end of the War until the 1970s, both free trade and the social bargain were largely honored, but since then the plight of the working class in the US has dramatically worsened. As expected, the decreased bargaining power of labor hurt them, but instead of the agreed-upon social bargain supporting them when they needed it most, that social bargain was badly eroded from the OPEC oil crises of 1973-1975 onward, with an escalation of that harm taking place under Reagan and since. (Reagan’s assault on the air traffic controllers was a pivotal moment in this degeneration.)

The business class and their political agents took their vastly improved economic wealth and converted it into increased political power. Citizen's United is just one recent channel for this effect.  It was not the first.

Notably, at just the time the economic plight of the working class became terrible, their political capacity to enforce the social contract was diminished.  This is akin to having your house burn down with your home insurance policy inside it.  At precisely the moment when the working class needed their contract with America to come through for them, they were told that policy would not be honored.

I take the time to offer the solemn argument that as the future economic and power elites of society, my students, economics students all, need to acknowledge that the economics profession has allowed itself to be used by the commercial elite against the working classes. We have taken the benefits and failed to pay a fair price for playing the game, leaving the working class to hold the bag. I exhort them to embrace the critical analytical and ethical tools needed to fight for more justice for the working class in America.

This is an exhausting endeavor. I cover enormous terrain - three centuries of thought and policy, dozens of books, many dozens of analytical papers, twenty-five years of my own work and the scholarship of the leading lights in the field. I construct my argument as carefully as I can, and present it with equal care.  I spent many years as a strategic management consultant, profiting in my own way from the benefits of the international economic system, and I must account for myself. For twenty years or more, I have felt the teaching has been worth it. In fact, I once said this was one of the two lectures that made it worthwhile for me to teach as a long-time visitor in an elite liberal arts college on top of my duties teaching graduate students at a state university and my private consulting obligations.

But last night, my second lecture following the 2016 presidential election, I realized that the message was now different. I was admonishing twenty-one-year old college students to embrace an ethical duty to the working classes only a couple of weeks after they witnessed the potential annihilation of the biosphere, corruption of the Constitution and their rights under it, and an erosion of their future prospects by that same working class and their apparently dangerous hero.

It hit me slowly, late in the process. I am wedded to this message and, as an old war horse, slow to change my cadence, I spent too little time thinking about the implications of what had just happened.  But it slowly dawned on me that my students do not any longer owe the working class very much at all.  In their rage — ignorant by choice, as the influence of fundamentalist Christian ideology in America has taken on the ugly and self-extinguishing form of rejecting expertise and education — the working class, largely white working class men, has deeply compromised the future of my students. For twenty years, I have told young elite college students about to assume their place among the privileged elite that they should not allow market fundamentalists to disguise the power of the system to do grave harm to the most vulnerable; that they should be honest about the pros and the cons of market capitalism.  (The economic case for market capitalism is strong, but there is no case for it at all without a place for a strong government to play a number of critical roles.)  But in the wake of the 2016 presidential election, how can I ask my students to sacrifice for the men and women who did not take the time to figure out that a billionaire with a sordid history of exploiting others was not a working-class hero?  Or that a political party, the GOP, that has engineered and continues to engineer the destruction of the social contract – destroying unions, public schools, transferring up to 90% of labor productivity increases from working people to their employers, and restricting their recourse to defend themselves in court, and now, astonishingly, is threatening to destroy social security and medicare -- is not their ally?  Or that their choice to dine on Jim Crow rather than a real dinner (the insight courtesy of DuBois) made them vastly less worthy of our support?  Or, finally that their decision to ally with their own political and economic enemy because Mr. Trump helped them galvanize their uncontrolled anger – a decision that may well destroy their own and the capacity of many to survive retirement and provide a safe world for our grandchildren – made my students collateral damage in this war?

This lecture -- this critical lecture central to my long-time message about the deficiencies of neoclassical economics -- has been transformed by this presidential election. I am inclined to not teach the course again. The working class has declared war on all of us, and I must take down their flag. De minimus, it cannot be the ethical duty of young college students to sacrifice for those who would choose to do them so much harm.  This is not Schadenfreude — we need not wish upon them the self-inflicted suffering that is likely on its way; there will be suffering enough without our contribution.  Instead, it is time to scramble for economic, political and perhaps our literal survival.  I can no longer ask my students to do much else.

Hate Trumps Love

Hate Trumps Love
Ignorance Trumps Education
Deceit Trumps Truth
Religion Trumps Science

Some said they rejected statist solutions and embraced capitalism, yet they embraced an enemy of capitalism who will destroy trillions of dollars of economic value, despite clear and constant warnings from virtually all professional economists and investors.

Some said they were angry at government, yet they elected in droves the very people who broke government.

Some said they were angry at corruption, yet they elected one of the most corrupt men ever to stand on a public stage in American politics.

Some said they cared about the Constitution, yet they elected a man who has shown through word and deed that he neither understands nor cares at all about democratic Constitutional values, but will instead exercise violent, autocratic, anti-constitutional powers to seek vengeance whenever he pleases. And a man who will appoint to the Supreme Court men who will suppress the voting rights of minorities, the reproductive health rights of women and the civil rights of the LGBTQ community.

Some claimed to care about "reason" (too laughable to write without quotation marks) yet they voted for a candidate who rejects science and threatens to pull the plug on the Paris Accords, humanity's last chance to save the biosphere and ourselves from self-extinction.

What this candidate promised was hate, not love. Ignorance, not education. Deceit, not truth. And his own special brand of myth making (which the religious imagined resonated with their own views of God), not science.

The study of rationality talks about "revealed preference." It says we must discard what people say they want or think, and instead infer their values and desires from their actions.

Today, the American people chose to become an existential threat to the other 7 billion people on the planet and to half of their own citizens at home. No matter what they say of themselves, they chose hate over love, ignorance over education, deceit over truth, and religion over science. They showed us who they are. We must hold their feet to the fire -- they did not choose capitalism, good government, and Constitutionalism, no matter what they say of themselves. They chose an authoritarian populist, a liar, an abuser, a misogynist, a vengeful sociopath to lead them, just as so many foolish mobs have done to their grave discredit and later horror so many times in history.

When Hitler was made Chancellor in 1934 few had in mind Kristallnacht, Dachau or Auschwitz. Few had in mind Jewish ghettos and genocide. You want a Strongman, you take your chances. Be careful what you wish for.

In their defense, the Constitutional experiment that took place here from 1789-2016 has always been flawed, and it was doomed from the start. (The blind hubris of white men who deny the searing hypocrisy of our early history is not worthy of any defense.) A Constitution, notably, provides protections against minorities (its fundamental purpose in replacing a simple majoritarian system) because its founders believe the natural tendency of mankind is to do minorities harm. The price one pays for such protection against evil is that the Constitution, a slow changing document by design, is used by the enemies of progress as a weapon against change, and, notably, used by the enemies of inclusion to exclude those they dislike or fear. No matter how prescient the writers of a Constitution can be, the world will change too much for them to have anticipated its needs, and the Constitution will, like the leeches applied to poor George Washington on his death bed, become the millstone around its citizen's necks that finally drowns them.

Last night, we drowned. Be cheered: it was our fate.

I apologize to all those who were victims of my belief over the years that mankind is fundamentally good. I was a victim of confirmation bias, trying to prop up my youthful delusion that, when I had to chose between Rousseau and Hobbes, my choice of Rousseau and the goodness of man in a state of nature made sense. Hobbes said we needed an absolutist, a sovereign protector who infantilized us with his power, and when push comes to shove, would chose such an ugly figure over democracy.

I also apologize to the rest of the world community for the grave harm that the American experiment, choosing to turn Fascist and denialist, will have on the rest of you.

Soon, Trump's America faces its own RÖHM PURGE. In '34, it took only three days to kill off all the opponents of Nazism and re-create the SS as its arm. (We will soon see increasingly militarized police in our inner cities if history means to repeat itself. The SS became more powerful than the German Army within a few years -- watch for signs of that.) Perhaps there will be some solace in the house cleaning that removes resistance and reason from Trump's path, as there will surely be Republican bodies that fall upon that heap outside the back door. Will Paul Ryan be the first to be hoisted on his own petard?

Those of us who can read and write and remember even an iota of history can see the writing on the wall. If you are young enough, make plans to leave.

Christian America Chooses to Self-Destruct by Following 15th century Islam's Anti-Scientism

One of the greatest ironies of our Age is that modern America is arguably a culmination of the ascendancy of the West and it seeks to destroy itself with the very weapon that made it possible. Those who paid attention to history know that as late as 1600, the Arabic world was far ahead of Europe. Arab science dominated European superstition. But the rise of a special brand of Islamic Faith forced the Arab world to turn away from science, lose their advantage, fall further and further behind the West, and ultimately turn over world domination to Western Empires, leading to the ascendancy of the material, technological, practical American version of Western Empire. Our version of the Enlightenment -- one of the practical inventor who drove standards of competition in industry ever upward, reined in by the practical policy maker who insisted that the blessings of the earth be shared democratically -- was arguably our sine qua non.

And now it is being destroyed.

Today, we face the rise of a new brand of Christian Faith that rejects or diminishes science, much as did the Arab world of the 13th to 15th centuries. The Arab world's scientific community today is a tiny fraction of what it rightfully should have been. Religion poisoned their destiny, relegating them in large part to many of the disasters they have endured during the 19th, 20th and 21st centuries. We are following in their path.

Today, nearly half of Americans repudiate science, expend enormous energy setting our understanding of the world and universe backward, fight to deprive children of an honest education, and suppress the use, much less the advance, of science. Today, while the CDC cries out that we do not have the funding to fight Zika's invasion of the continental US, many Americans apparently believe that Zika is a "government conspiracy." When the next virus comes along -- and it will assuredly come along -- we may be doomed to prevaricate and sermonize instead of blasting it with the might of modern science.

The enemies of modernity say the vast majority of climatologists and other scientists clamoring about changes in the earth's ecosystem are lying for research funding. Thus the Anthropocene Epoch, so named because we have caused an astonishing implosion of the biosphere, is apparently a political ploy.

Ironically, the very Americans who are, for a host of odd reasons, so anti-Muslim have decided to follow in the footsteps of the Arab World in the 15th century and hand over our leadership of the world, trading it in for superstition and nonsense. We are taking the lead offered by Islam in how to destroy the most advanced society on Earth in short order.

The passing of the American Empire is not the whole price, unfortunately. For with our obstinate passing we may take the biosphere with us. But until then, we get to prove that those who failed to pay attention to history are doomed to repeat it.

Safe Spaces are NOT in conflict with free speech and university discourse, but fundamental to them

The University of Chicago has taken a stand on students and activists demanding that university life protect them from political, racial, gender, orientation, and other forms of verbal assault from which they may take offense.  UC has announced that it will provide no safe havens (so-called safe spaces) for students who wish to limit discourse they deem excessively hurtful. The argument, it seems, is that a higher education demands a rigorous give-and-take and being protected from offense by those who disagree with us is counterproductive to that enterprise.  Perhaps some at UC, and those who support this position, think this is about the first amendment, a right that assures us that the government is limited in the threats it may employ in response to our public disagreement with it.

Confusion in the media -- including social media -- is rampant.  This is apparently a complicated issue.  But it is a shame to see that even UC has failed to work out the nuances before announcing what appears to be blanket policy on the matter.

Notably, the First Amendment is itself a safe space creator.  It says the government cannot shut down our dissent of it without very good cause.  (We cannot, for example, incite violence or revolution without consequence).  The First Amendment thus creates a safe space -- a constitutionally-protected space, in which grievances of our government can be aired without fear of repercussions.  The fundamental protection of free speech in the US Constitution creates a safe political space for criticisms of those in power.  Anyone, anywhere is "free" to say whatever he wishes; one has the legal right to free speech when one is free to speak what is on one's mind without fear of government reprisal; that is, when one is free to speak safely. 

For speech to be free, it must take place in a safe space.

Notably, the First Amendment says nothing about our right to be heard without being challenged, nor about our right to hear or not hear others.  In public discourse we are not obliged to attend to anyone we don't like, but we may have those voices foisted upon us from time to time. So free speech neither guarantees us an audience for our ideas, nor protects us from others' reaction to our arguments.  We are under no obligation as citizens to hear each other out.  The common view that a right to "free speech" affords us to say anything without reprisal from anyone or, even more oddly, the duty to listen to anyone who wishes our attention, is simply right not.  The legal right to free speech allows us to speak freely, safe from government reprisal.  That's about it.  Free speech requires safety, and free speech of any other sort must be protected in other ways.

Notably, universities play a critical role in society that require that university communities obey rules somewhat different from those in civil society generally.

If universities are to meet their goal of open and honest discourse, there are times and places when and where we in fact must be obliged to hear other arguments -- beyond the obligation of the citizen to do so in everyday life.  We cannot teach and learn without hashing out opposing positions, on at least disagreements about salient features of the argument.  How shall we interpret the evidence describing society as it exists today and in history and what it means for tomorrow?  What obligations do we have to ourselves and one another as ethical citizens of a nation and of the world?  How shall we determine the proper roles of government, business, the ordinary citizen?  How shall we determine the truth of scientific theory and the meaning of scientific experimental findings?  There will always be disagreements about what we the meaning of what we are seeing in the world and what best might be done about it, and vigorous debate about values and practice are often both essential for arriving at the best possible understanding of it.

But we are only obliged to hear other arguments within reason. We are not obliged to hear all other arguments, no matter how ill-prepared, anti-scientific, hateful, dysfunctional, etc. This is not a simple dictum that suggests that "one must be nice" although that may be part of an effective, civil society.  There is something more to it than decorum.

There are constraints on the qualities of an argument in university life that comprise the quid pro quo that earns one the right to be heard.  Most people engaged in this discussion in the media seem to miss the fact that university life both requires that (1) we hear disparate and even disagreeable voices more actively than we do in everyday life, and (2) we have the right and duty to constrain those voices far more tightly, demanding that they meet logical, evidential and coherent standards of argument.  This is the point of education -- to take the naturally emotive, illogical, biased, and self-advancing positions of our students and teach them how to shape those opinions into defensible arguments, ordered by logic, supported by evidence, and articulated in a civil manner.  College discussions that fail to get beyond the emotional and illogical tone of social media do students a great disservice; this is especially challenging in on-line teaching, where students seem especially inclined to fall into such awful habits.  One of the most important roles of the educational institution is to teach and demand these thinking and communication skills -- in both their transmission and their reception. 

An often-missed piece of the safe space puzzle is that the academy not only has the right to ask us to listen, even to offensive arguments, but also the obligation to demand that the way in which these arguments be presented, as well as critiqued, meet reasonable standards of reason and rhetoric.  This is naturally challenging -- both emotionally (to hear the ugly) as well as intellectually (to prepare and to critique logically and fairly).  To make it feasible for emotional human beings to engage well in these efforts, everyone must at a minimum feel safe to do so.  Anger and fear may be motivating, but they should be set aside as well as possible by the rules and the norms of the game.  Faculty and other university administrators cannot demand that students "hear each other out" without discharging their own duty: to ensure that the rhetoric employed be both worthwhile and civil.  The quid pro quo for being obliged to listen is that those who choose to address us do so in sensible and productive ways and it is the role of faculty and university administrators to teach and enforce such intellectual and social skills.

Hence, safe spaces are not, as is imagined by many, antithetical to university discourse, but in fact part of the foundation of energetic, honest, and thorough discourse of the most unpopular ideas.  In university life, students must first be assured that they are safe from nonsensical, angry, hateful, invective attacks on one's person or position -- much less time-wasting attacks -- the very sort of behavior that all reasonable faculty forbid in their classrooms -- before the university has the right, and duty I would add, to demand that students hear one another out.  Universities are not caged "octagons," into which students are thrown together to fight in no-holds-barred, death matches.  No one, much less a young adult in college, should be expected to endure aggressive and sustained taunts about their race, sexual orientation, or politics -- nor should students be encouraged to engage in such counterproductive conflicts (which I fear the UC policy and other like it may unleash).  Learning how to participate in civil, educated discourse is one of the fundamental purposes of higher education, and it is the university's challenge to create the milieu in which university residents interact according to these productive behaviors.

We must treat civil discourse as the equivalent of a safe space and provide it to our students.

Of course, the idea of a "safe space" can be, and has been, misconstrued and misused.  Chalk signs of "Trump 2016" should not have been met with official condemnation at Emory (how was this uncivil or threatening?)  The professor enduring the shrieking Yale student is not what we wish for -- but the question is how to promote sense and sensibility instead of encouraging students to endure the tirades of those who disagree with them.  Trigger warnings can be excessive --some learning is admittedly quite uncomfortable (although I have my suspicions that many of those who promote the idea that learning is uncomfortable have not subjected themselves to much identity-threatening discomfort themselves).  Anything can be excessive.  But in a society in which it is still much harder for some people to feel safe -- it is indisputable that a young black man who insists upon his legal and civil right to see a police warrant before having his car or home searched is much more likely to endure illegal violence against him, for example (an eventuality the First Amendment most assuredly tried to protect us against) -- we cannot hope to hear from the marginalized, and have no right to demand that they listen to the majority.  This doesn't mean that everyone will feel perfectly safe when we seek to behave civilly and productively -- most of us don't like being confronted in the public square and young people are prone to consider disagreement with their values and ideas a serious offense, even when they are not communicated inappropriately.  But it does mean that universities are obliged to facilitate courteous discussion and forbid bullying in all forms. And it does mean that safe spaces are not contrary to the form of free speech that must be conducted in university spaces, but fundamental to them.

No one in civil society is obliged to listen to the angry, incoherent rantings taking place in the political rally of one's opponent, and no one in is obliged to do the same on campus merely because of one's status as a student.  Enrollment in a university comes with a social contract (apparently in need of clarification): the university ensures that civil, quality discourse populates the classroom and the commons and in exchange its students agree to engage (speak and listen) with integrity and engagement.  Only once the University of Chicago and other quality colleges and universities deliver their end of this bargain have they the right to demand that students deliver on their end of it.  But the idea that a safe space is somehow in conflict with "free speech" or the mission of a university is not correct.  I believe UC may have jumped the gun, failing to address its own obligation in this critical quid pro quo; it must first ensure civility and safety before it demand its students listen openly to all criticism of their positions.  At that point, they may insist that students endure the discomfort of vigorous disagreement about even their most sacred shibboleths, but until then students do have the right to insist that the university be a well-regulated, safe community in which this to-and-fro is to take place, one in which the civility and decency of classroom discussion shall be carried over into the university commons.

Note that social media and ordinary civic discussion may allow -- and perhaps there is nothing that can be done to stop -- nonsensical, emotive, partisan utterances, couched in invective, that pass for "speech."  But it would be disastrous to allow the nature and sensibilities of social media -- perniciously and massively influential in the formation of public opinion in 2016 -- to infect university life, where our duty is to do much better than this.

Indeed, create and support -- and do what we can to enforce -- an environment in which civil, sensible discussion takes place and its opposite banished. Then insist that each of us listen civilly to what the other has to say.  Do not confuse this with the confused desire to subject members of the academy to crude and hateful attacks under a very confused banner of "free speech" that has nothing to do with either freedom or speech.

Economic Policy Tutorial for the Presidential Campaign

There are basically two economic GOALS: more efficiency and more equity. There is a looming, binding, long-term CONSTRAINT, as well: sustainability. All three trade-off against one another (e.g., more equity is sometimes less efficient) but sustainability constraints must be obeyed or you destroy the ecosystem and/or natural resources needed to survive.

Economic policy must be evaluated against all three:
1. How well does it improve efficiency (what we get out of the resources we are free to use without creating an environmental debt that cannot be paid back)?
2. What impact does it have on equity?
3. Does such behavior keep us alive in the long-term or does it threaten to destroy the system or the environment (or both)?

There is a lot of chatter about economic policy that is nonsensical and/or deceptive.

For instance, there is talk of the US being a highly taxed economy. That's an outright lie. Neither businesses nor individuals are highly taxed in the US relative to civilized economies.

There is also deceitful chatter about how lowering corporate PROFIT taxes would improve economic activity. The logic is distorted and misleading. The maximization of profit leads to the same economic activity with higher or lower corporate taxes, with a few technical exceptions (and they have to do with businesses alternative investment opportunities -- which are actually too low in this milieu to be interesting to them). Do we want more jobs? Incentivize the creation of them by subsidizing new employment. Do we want more investment? Incentivize investments by making the net cost of investment even lower (interest rates are at an all time low, so this would require some form of subsidization). Do we want more domestic employment and investment? Again, subsidize such activity or penalize overseas investment and employment. There is no good argument for lowering corporate profit taxes -- taxes already close to a post-WW2 LOW and profits close to a WW2 HIGH-- as it is. This is simply one more plutocrat or lobbyist or demagogue fooling the trumpets into thinking we are not a pro-business nation -- a mantra that is simply untrue.

There is sometimes chatter about making the tax rates simpler by making them FLATTER. This has the potential to vastly DECREASE equity -- taking from the poor and giving to the wealthy -- and REDUCING overall economic activity at the same time, as the marginal rate of consumption is higher in the lower income brackets. Simpler may be good -- the complexity is inefficient and unfair -- flatter is NOT. It's lose-lose.

Listen to a candidate who says he wants a SIMPLER tax code -- that's win-lose (simpler is good but we lose the capacity to incentivize some important stuff -- like home ownership), but walk when he starts to talk about a FLATTER (regressive) tax code.

This leads some true haters to propose a CONSUMPTION tax. This is a way of both crushing the poor (who spend virtually all their income on the goods and services they need to survive) and further dampening aggregate demand -- and thus hurting economic activity, as well. A consumption tax is a massive lose-lose proposition. It is for those who never read Dickens and secretly like the idea of people starving in the streets, locked up in poor houses, and orphans begging for a second bowl of porridge.

With the exception of Sanders (and Reich on the outside looking in) we hear far too little about what must be done to even put a small dent in the monstrous raping of the 99%. The top 0.1% are in charge and are the recipients of virtually all the gains of our productivity (efficiency) growth for four decades. The rest of the top 1% are their foot soldiers, picking up some scraps. The bottom 90% have been done grave harm for decades. This is grossly inequitable, has caused massive tragedies, personal and community, and terrible inefficiencies, as well. A massive redistribution of income and wealth would be very, very likely to undo only a tiny % of the damage done by the levels of expropriation that have occurred since 1980. Political discourse -- even the most radical of it -- rarely even broaches the truth, as it is so extreme. Were we to undo the expropriation of the 99% that has taken place, we would have to dismantle the entire American system. Few want revolution. So most of us (the clear headed and fair minded and timorous among us) are willing to discuss much smaller compensations. But all economic policy offered by candidates should be assessed against this standard: how far are they willing to go to make this system more equitable? The kids are at the table and one kid has 99 cupcakes and the other 99 kids have one cupcake each. If a candidate thinks the kid with 99 cupcakes needs more cupcakes -- walk. If a candidate says everyone deserves a few crumbs more -- listen.

But remember that the perfect is the enemy of the good -- if you demand that every kid gets two cupcakes, no more and no less, you might get nothing.

Further, because of explicit racism over centuries and inadvertent racist impacts of the past four decades, African Americans are in trouble. Globalization has (intentionally and inadvertently) done grave harm to union workers, and Blacks had found a home in unions that gave them some insulation against outright discrimination. Globalization since the 70s has thus hurt all working men and women, but Blacks were hurt disproportionately more. Further, the financial crisis of 2007+ has caused an enormous loss of home equity -- and this loss has destroyed the vast majority of the assets of African American families. Many were hurt, but Black folks were disproportionately hurt and hurt as a much higher % of their savings and retirement money. As well, massive dislocations of urban economies has led to massive unemployment for young urban dwellers, with Blacks hurt more once again. If a candidate is not willing to offer some compensation and some plan for making good on what has been taken over and over again from the Black community (and are both clear headed and fair minded -- and do not want a revolution), walk.

Perhaps the second most threatening force in the modern American milieu is the militarization of the police. With the fall of the Soviet Union, the military needed "work" and the wrong element in government (those who call themselves "Law and Order" but are, and have always been, "Order without Law") employed them to help arm and train a civilian police force to become a standing army, just the sort of force the Founding Fathers warned us about repeatedly, and tried to protect us from in the Bill of Rights. A confluence of a few horrifying American cultural and political trends -- the white supremacist desire for a replacement for Jim Crow, the infiltration of police forces around the country by the KKK, a protective loyalist culture among police that got transformed from loyalty to one's brother (a good thing) into something insidious (most become acculturated into a culture of lying to protect murderers among their ranks behind the thin blue line), the Pentagon off-loading billions of dollars of insanely destructive war materiel onto local-yokel police departments, the massive growth in the equipping and training of SWAT teams, the vastly distorted and pernicious and racialized War on Drugs that gave these crazies an excuse to go to war against the people they were supposed to "serve and protect," and a for-profit prison complex -- and we find ourselves living in a dystopian nightmare in which Americans, many Black, must live in fear that if they are stopped for a traffic incident they could end up dead. Any candidate who does not address this (expect even the bravest to mumble in craven ways about how much police lives matter, for the American culture now makes that the opening prayer on this matter) must be rejected by fair minded and decent people.

Finally -- and for some of us this may be the good news -- we are threatening ourselves with extinction. That is, we just may admit, at least accidentally, that "we are the virus" and kill ourselves off. The planet (not this biosphere, but something hotter and drier) will survive without us -- and billions of sentient beings will be freed from the terrible suffering we inflict on them and each other. But, if you still cling to hope, then you must demand that your candidate say just what he or she thinks of climate change, the Paris Accords, and just how we are going to massively re-incentivize the economy to invest in and employ sustainable technologies and set aside the brutally destructive oil economy that is cooking us like a batch of boiled eggs. Surely, no personal vendetta against a candidate can free any fair minded and decent person from the moral obligation to vote for someone who is willing to at least stem the tide of global warming long enough for our children and perhaps grandchildren to live out their lives before humans enter the parched, dystopian future that is our destiny.

Make America Sane Again

Don't ask me how it's done. But it does seem clear to me that there was a time when most people tuned into three mainstream networks and listened to Walter Cronkite together.

This meant that there was room for disagreement and differing interpretations, but we all began in the same place. Same facts, same editorializing. We were anchored there, as the cognitive psychologists say. When you're anchored, you don't wander very far. So in the end we were pretty close together -- and the GOP and Democratic voters could talk, party -- even intermarry. It was a civil time for most.

Then the proliferation of cable. We thought it might well bring a diversity of points of view, hoping that it would enrich the discourse with more minority and extreme ideas. The old model (shown a century ago by Hotelling) made us converge on the center in our perspectives. The new model would allow each of us to choose from among many and varied news sources, broadening and diversifiying our thinking.

Except that is not what happened.

It turned out that the old three-network-centrist model was not the binding constraint. What constrains us is... us. Start with our incapacity to process varied and diverse points of view. So most people settled on one cable news network, one narrow sliver of a perspective, and started to think like a Panda bear eats -- bamboo shoots for breakfast, lunch and dinner.

Further, we faced other cognitive constraints -- for example, we remember best what is vivid and recent (two well studied biases) -- cable networks knew that to capture and keep us in their market share they needed to up the ante, and make their narrative the most compelling, the most fiery, the most dramatic -- the most combustible. Martial music and banner headlines touted a small narrow sampling of the violence on the planet and called it "terrorism" -- and this sold their bill of good to our most primal fears, and that became the new theme: EVERYONE IS COMING TO GET YOU!

And look at where we are. The RNC is now the Hang 'Em High Party, calling for lawlessness (they want to arrest, try, and execute Clinton in a kangaroo court of their own, and they want to their gun-toting Pinkertons to kill with impunity anyone who keeps them up at night). The Left is better, but also narrowly focused -- for them the Wall Street Banksters are after their homes, white cops are after their friends, Christians are peering into their bedrooms.

Fear is the new currency.

We've been afraid before, but in the past, cool heads had a chance to prevail, perhaps because we shared a media. But now, there is a lunatic calling Hillary Clinton a treasonous crook shouting his message day and night on one "newscast" while on another Trump is being called out for a rapist and a thief. If either are true, we do hope the judicial system finds them guilty. But that no longer matters, because today the average Joe thinks he knows the truth before investigation -- his need for visceral stimulation has been met day and night by a noxious, narrow media voice that seeks to keep him in a trance, and this requires that he never take a deep breath and ask, Wait, what? Can that be true?

If you point out that there is another point of view -- watch out! People defending their little house on the prairie from Injuns are not in the mood to listen.  There's a whole lot of shooting going on but not much else.

___

http://people.bath.ac.uk/ecsjgs/Teaching/Industrial%20Organisation/Papers/Hotelling%20-%20Stability%20in%20Competition.pdf

The true meaning of the Trump political brand

The GOP platform is brutal, regressive, and terrifying -- one position after another appears to be the work of medieval churchmen -- and the GOP establishment is responsible for allowing it to happen, if not initiating much of it.

Yet -- and this seems to be less obvious to many -- until now, the GOP establishment was actually at the gate holding off the barbarians.

You heard me. The GOP establishment, as awful as they are, were holding off something worse.

As this picture unfolds many are showing that they do remember some of their history lessons. Many are aware of the fascistic dangers of this uprising. Many are not oblivious to the very successful demagoguery that has characterized the rise of Donald Trump.

Yet too few seem to have noticed that Donald Trump is not himself a medievalist. He has not invested himself in a lifetime of bigotry, repression and hate. Donald Trump is not out of The Crucible. He is not Ibsen's Brand. He has not devoted a lifetime to righteousness, much less hate. He would have found Sir Gawain's quest to take the punishment for his minor sin of hubris absurd. Further, Trump does not have the resume of a despot. He was not rejected from Art School, not raised by a poor, single mother in poverty, not scoffed at for having off-kilter revolutionary ideas. Trump was born with a silver spoon in his mouth and it is now platinum.

Trump is not, at heart, a demagogue. He is not a hater, a moralizer, a revolutionary, or even a racist. If this movement burns the place to the ground, Trump has much more to lose than gain (unless he has shorted the entire Dow Jones Index).

Trump is a con man, a salesmen, and -- it is becoming increasingly clear -- a marketing genius. He is a businessman, and this campaign has been his marketing campaign. What Donald Trump has done is NOT bring his own brand of hate to the people and fueled a populist uproar with racist, ethnic language.

What Donald Trump has done is revealed something FAR WORSE.

Trump has HELD A MIRROR UP TO THE AMERICAN PEOPLE. He is a brand marketer -- he looked around and said "what political brand will win the White House?" and what he discovered -- and implemented sociopathically (he is THAT, and sociopaths shape shift well by their nature) -- is what he found out among us.

Trump is winning and winning big because he is the only candidate to transform his brand into the public's image of itself. This is not God creating man in his own image. This is a would-be God who created his own image as a crystal clear reflection of what he saw in man.

And that is very frightening. Trump is a sociopathic, empty vessel, reflecting back what we want to hear so as to maximize his gains.

What Trump has shown us is that nearly half of us are homicidal racists. That half of us will cheer on violence, even killing, of people in the streets. That half of us are emotionally moved by the idea that The State should be armed by a militarized police force that is absolutely above the law. That the civil liberties of people take a back seat to law and order and safety -- and the gut feelings of the mob.

What Trump has shown us is NOT that, like the impoverished and frightened Germans of 1933 who were taken in by a true demagogue, Americans are equally gullible, that the Good German can be remade here.

What Trump has shown us is that when a sociopathic brand marketer holds a mirror up to the American people, the reflection that he sees is brutally ugly, violent and hateful.

The leaders of the GOP establishment have long been craven, and their cowardice and their abandonment of duty -- so many are not in Cleveland fighting for their country, now that it is not profitable for them to do so -- is tragic. The GOP establishment has long been willing to play along with the racist haters in code, but they never wanted it to come to the surface. Explicitly, racism and hate and violations of civil liberties have not been in the GOP platform, and now that it has become explicit, they do not want to be sullied by any of it.

It turns out that Jeb! and Kasich and Fiorina and Rubio ... and Romney (I will pass on Cruz as he seems to be the real demagogue) WERE HOLDING THE BARBARIANS OFF AT THE GATES. Now that they have forsaken us and turned their backs on the Trump-infested RNC, a marketing genius has mirrored our soul and the reflection is monstrous.

It is not right to say that Trump is a hateful demagogue who has fooled the simple and fearful into following him to Hell.

It is not right to say that the GOP has created Trump by promoting the explicit fomentation of evil.

More tragically, a sociopathic marketing genius took our pulse and discovered that one of the biggest American brands ever to be created in the political arena, a brand that merely reflects who we already are, is HATE.

Thurman Arnold: Do institutions exist apart from their manifestations in the real world and shall they be judged by anything less?

In 1937, Thurman Arnold published the brilliant The Folklore of Capitalism. So prescient it could be read today toward many good ends.

In it, he argued that the real life political systems that fail us matter far more than their idealized states. That capitalism had failed us in the 1930s could not be denied, and the resounding defenses of capitalism that argued that the real-world application of capitalism was flawed -- and thus the Great Depression was not to be blamed on the system -- rang hollow in the face of such misery. Arnold was not easier on socialism or communism, arguing that their effects in practice were the best judge of them, and equally partisan defenses that said that communism or socialism in theory were somehow justification enough for their advocates, despite their own abysmal failures in real life, were not useful or credible.

Thurman Arnold argued that policy that should help people was far too heavily constrained by simple-minded ideology (but that's socialism!) and even more primal fears of change.

Judge a system by its impacts on the people it is meant to serve, and work hard to make that system work well with smart policy, unfettered by political ideologies and silly fears about the meaning of feeding hungry people and building badly needed roads. Arnold was teaching at Yale Law at the time but later, because -- or despite? -- the clarity of his vision, was brought into the war time government.

His arguments about judging capitalism, communism or socialism by its real world impacts and not by their idealizations, their sacred texts, reminds us of the discussion of whether religion does us grave harm. Whenever a violent Muslim or Christian, Jew or Hindu (and, shockingly, the occasional Buddhist) does something terrible, the open-minded come out of the woodwork to condemn the individual act and not the system of belief. When a homophobic Muslim or Christian kills people we hear all around us "that is not the nature of Islam!" and "he is not a true Christian!"

But is it fair to judge a religion not by its impacts situated as it is in the real world but on what it says of itself? Is it fair to let capitalists or socialists tell you what kind of a beautiful world it would be if they got to do it all their way? Do we let violent criminals say: "do not judge me by this act, as I say unto you that I am a good and deserving person"?

Or was Arnold right that political-economic systems and, by inference, religious institutions, and other social institutions should be judged by their behavior, by their impacts on the well-being of the people they are meant to serve, and not by their self-serving narratives?

The DNC's Ultimatum Game with Progressives

Economists and rationalists got something important dead wrong.

They sorted it out in an oft-repeated experiment called the Ultimatum Game.  It's an exceedingly simple game and experiment. People play in pairs. They are told they are to split some money -- say $10. One person is assigned the role of deciding how to split the loot. 50/50? 60/40? 90/10? All for me and none for you (the Trump move)?

The second decides if he or she will take the offer. If he accepts the offer, they split the money according to the rule proposed. If she declines the offer, neither get anything.

Economists argued for a long time that rational people take ALL OFFERS (other than 100/0). That is, if I offer to take $9 and leave you $1, then you are being offered a choice between $1 and nothing, and rationally choose the dollar. If I offer to take $9.99 and leave you one penny, you are being offered a penny -- or not -- and take the penny.

The problem with this sort of rational analysis is that it may be that rational people take the penny (or the dollar) but real-life people DO NOT. In thousands of runs of this experiment, real life people tend to reject offers in which they are treated very unfairly. In fact, the data from these thousands of experiments show that people tend to reject offers in which they are being offered less than 20% of the original prize. Make an offer of 75/25 and most of us take it begrudgingly, but offer 85/15 and most of us reject the 15, preferring nothing at all to allowing you to take 85.

Why is this relevant right now? Because the Democratic establishment is counting on Progressives to be rational, and take something over nothing. Take Hillary over Trump or Cruz, because 25 is better than 0. Some Progressives are of course irrational -- many or most people are irrational -- so they may reject the offer because they are too angry to think clearly or because they are confused. BUT THE DEMOCRATIC PARTY ESTABLISHMENT IS WRONG TO THINK ALL PROGRESSIVES ARE IRRATIONAL. Many are smart human beings who understand that they have to take 25 begrudgingly, but should reject 15 because the level of unfairness would not be tolerable and should not be incentivized. That is, many Progressives who are balking at a vote for HRC are not confused about Cruz or Trump being the 0 and Hillary being better, but they are thinking that Hillary is the 15 that should be rejected in order to discipline the DNC into behaving more fairly and not the 25 that should be taken begrudgingly.

The lesson is clear: the DNC *must" find a way to make Hillary the 25 (the choice that we take begrudgingly even if we feel we have been treated unfairly) and not allow her to be seen as the 15 (the choice that is so unfair we would rather take 0 and thus punish the DNC into changing in the future). This will include substantial offers to Sanders and Progressives to write parts of the party platform.

I do understand that Obama got away with offering Hillary too little in 2008 and yet won, anyway. But had the economic crisis not hit us in September of 2008 closely following McCain's admission that economics was not his strong suit, the outcome of that election may well have been different. Obama should have offered more to Clinton supporters to earn their votes (his sense of entitlement was not right IMO). In fact, because Clinton supporters in 2008 played the part of DNC loyalists and supported Obama then, many of them consider it very unfair that Sanders supporters are being such poor team players now (and some of them are lousy team players). So Obama's selfishness then is hurting us now, as well. It is surely better to earn votes through consultative programs and doing good for your constituencies than through demands for loyalty oaths and dues-paying. Progressives are not soldiers sworn to die for the flag. They are people in need who expect politicians to try to do their jobs and serve the people fairly. The DNC can say correctly that they are the lesser of two evils, but remember the 80/20 rule: if you are the 15 instead of the 0, people who care about fairness (and liberals care more about fairness than others) will reject you. It is human nature to do so.  If the DNC wants to win in November, it must be the 25.

The DNC's Ultimatum Game with Progressives

Economists and rationalists got something important dead wrong.

They sorted it out in an oft-repeated experiment called the Ultimatum Game.  It's an exceedingly simple game and experiment. People play in pairs. They are told they are to split some money -- say $10. One person is assigned the role of deciding how to split the loot. 50/50? 60/40? 90/10? All for me and none for you (the Trump move)?

The second decides if he or she will take the offer. If he accepts the offer, they split the money according to the rule proposed. If she declines the offer, neither get anything.

Economists argued for a long time that rational people take ALL OFFERS (other than 100/0). That is, if I offer to take $9 and leave you $1, then you are being offered a choice between $1 and nothing, and rationally choose the dollar. If I offer to take $9.99 and leave you one penny, you are being offered a penny -- or not -- and take the penny.

The problem with this sort of rational analysis is that it may be that rational people take the penny (or the dollar) but real-life people DO NOT. In thousands of runs of this experiment, real life people tend to reject offers in which they are treated very unfairly. In fact, the data from these thousands of experiments show that people tend to reject offers in which they are being offered less than 20% of the original prize. Make an offer of 75/25 and most of us take it begrudgingly, but offer 85/15 and most of us reject the 15, preferring nothing at all to allowing you to take 85.

Why is this relevant right now? Because the Democratic establishment is counting on Progressives to be rational, and take something over nothing. Take Hillary over Trump or Cruz, because 25 is better than 0. Some Progressives are of course irrational -- many or most people are irrational -- so they may reject the offer because they are too angry to think clearly or because they are confused. BUT THE DEMOCRATIC PARTY ESTABLISHMENT IS WRONG TO THINK ALL PROGRESSIVES ARE IRRATIONAL. Many are smart human beings who understand that they have to take 25 begrudgingly, but should reject 15 because the level of unfairness would not be tolerable and should not be incentivized. That is, many Progressives who are balking at a vote for HRC are not confused about Cruz or Trump being the 0 and Hillary being better, but they are thinking that Hillary is the 15 that should be rejected in order to discipline the DNC into behaving more fairly and not the 25 that should be taken begrudgingly.

The lesson is clear: the DNC "must" find a way to make Hillary the 25 (the choice that we take begrudgingly even if we feel we have been treated unfairly) and not allow her to be seen as the 15 (the choice that is so unfair we would rather take 0 and thus punish the DNC into changing in the future). This will include substantial offers to Sanders and Progressives to write parts of the party platform.

I do understand that Obama got away with offering Hillary too little in 2008 and yet won, anyway. But had the economic crisis not hit us in September of 2008 closely following McCain's admission that economics was not his strong suit, the outcome of that election may well have been different. Obama should have offered more to Clinton supporters to earn their votes (his sense of entitlement was not right IMO). In fact, because Clinton supporters in 2008 played the part of DNC loyalists and supported Obama then, many of them consider it very unfair that Sanders supporters are being such poor team players now (and some of them are lousy team players). So Obama's selfishness then is hurting us now, as well. It is surely better to earn votes through consultative programs and doing good for your constituencies than through demands for loyalty oaths and dues-paying. Progressives are not soldiers sworn to die for the flag. They are people in need who expect politicians to try to do their jobs and serve the people fairly. The DNC can say correctly that they are the lesser of two evils, but remember the 80/20 rule: if you are the 15 instead of the 0, people who care about fairness (and liberals care more about fairness than others) will reject you. It is human nature to do so.  If the DNC wants to win in November, it must be the 25.

The Too Big to Fail Meme Explained

The Too Big to Fail (TBTF) meme is, if understood, a shorthand for something more than the size of the Wall Street investment banks.

TBTF is of course the idea that because banks are interconnected in our financial system, the failure of a large bank has repercussions on the rest of us. Hence, we are obliged to rescue them when they are on the brink of failing.

The three key questions that arise are: (1) what’s wrong with having to rescue a failing bank, (2) can it be avoided and (3) are there other issues here not being discussed directly?

(1) What’s wrong with having to rescue a failing bank? Those who wish to let failing banks fail without our help are in a few camps. One camp says that they don’t deserve to be rescued for poor performance and misconduct of their own doing, especially when others, more innocent and more vulnerable, e.g., homeowners, were not rescued. It smacks for good reason of favored person status among the plutocrats. (Recent revelations of the SEC turning a blind eye even on actual convictions of hedge fund investors reinforces this view as does the extraordinary lack of criminal charges in the case of the financial crisis.) Another camp – most mainstream economists are in this group – care very little about what is fair and more about efficiency and the role of incentives. These folks worry about so-called ‘moral hazard’ which is the idea that if a firm knows in advance that you will rescue it if the risks it takes on blow up in a downside scenario, that firm will take on too much risk and impose too much risk on the rest of us. (In its financial decision making, they are now discounting the downside of highly volatile investments, thus raising the ranking of those that impose the greatest risks on the enterprise and on the rest of us.) In other words, we not only rescue banks for failing normally, but we distort their incentives so they are more likely to fail. Still another camp is comprised of “free-market” ideologues (the subset who are not charlatans merely promoting the power and profit of business, but the group who actually believe in markets) who do not want the government bailing out anyone; they want firms to be unfettered to both succeed and fail. The bailouts make them unhappy for obvious reasons.

(2) Can it be avoided? The simpler TBTF critics want us to believe that by making banks smaller, they will be small enough to fail. This may not be right for a few reasons. (1) Small banks are still interconnected, so small bank failures will still lead to small charges to the rest of us – the problem that they are not being forced to fully subsume their own costs and mistakes goes on; (2) Break large banks into many small banks and if they fail the sum of those small charges may still add up to a lot of problems for the rest of us, demanding a rescue of some sort, anyway; (3) the chaotic/ catastrophic aspect of financial systems means that a butterfly flapping his wings can cause a tsunami – so even small bank failures that are still connected can cause outsized harm. (If you unplug a supercomputer you have tampered with a tiny part of it but you have caused a major problem.) So interconnectedness counts as well as size and it may be too complex for us to forecast and manage.

(3) The other issues not being discussed were highlighted in The Big Short where we learn that the investment banks are problematic for reasons apart from their size and interconnectedness. We see firsthand that the big investment banks (especially Goldman Sachs) have displaced the market altogether – fixing prices when it would cost them profit until they can manipulate buyers into taking on toxic assets and only then moving prices in line with market pressures. THIS MARKET DISPLACEMENT is (1) illegal, loosely, but should be punishable by extreme measures; (2) a product of power and opacity more than size; (3) a product of incompetent regulation, although it may not even be possible to regulate this sort of behavior. THIS FEATURE IS ARGUABLY MORE IMPORTANT THAN SIZE. All arguments in favor of markets, all arguments in favor of finance capitalism, all arguments that say that we have to take the bad (gross inequality) to get the good (supposed efficiencies) go out the window if THERE IS NO MARKET, but instead there is a profit-seeking vulture at the heart of the system fixing prices for their own profit.

So this problem cuts at the heart of finance capitalism. If you solve it, the system we have may be justified (with other fixes). If you don't solve it, all the formal arguments for finance capitalism go out the window and you may as well try socialism or something else.

In this last, both political extremes, socialists and social democrats at one end, and Tea Partiers on the other, can agree. Mainstream and radical economists can agree. We need a financial system in which banks are not so interconnected that their mistakes make us sick – but that is hard to fix. We need a financial system in which banks are not so big that their failure will cause crises – but making them small is not a complete solution. And, arguably most important, we need a financial system in which markets function honestly and players are never so powerful, opaque, or “made” (like a mobster) that they can manipulate prices of billions of dollars without vigilant regulation and extreme prosecution.

The surprising rise of American Fascism and what to make of it

In my youth, we often sat around wondering how it was that men like Mussolini and Hitler took power. Where were the good and moral people when they were needed to stand up to them? We and our teachers were perplexed by the idea of a Good German, the fellow who found the Fascists' promises of a return to Glory so compelling they would look away at tragic displays of discrimination and violence.

We are rapidly learning, by watching many of our fellow countrymen in 2016 embrace a narcissistic, sociopathic fascist, how the terrors of the 20s and 30s came to power and did so much evil in the world.

Some of those furtive American fascists were obvious to us all along. They were quick to defend violence against innocent black teens in our own streets, quick to defend violence perpetuated against innocent Muslims running from our bombs overseas. While few defended the confederate flag or outright racism, they were awfully quick to find examples of their distorted, self-imagined concept of "reverse racism." We saw through them then. They did not hide their evil from us, despite displays of high handed morality.

But admit it: some of those who have come out of the woodwork, some of those excitable followers of the madness, the Trumpery, of our time, were not so obvious. You saw them on social media, in the street, in your workplace, and you thought, admit it: deep down, he's a nice guy.

And now you don't know what to think. Here's my suggestion: the Good German was not evil -- he was simply human. Sociopathic marketing geniuses like Mussolini, Hitler and Trump can see through them and turn them into willing foot soldiers more easily than you can imagine. Stalin and Mao had the advantage of communist regimes to back them up, but Mussolini and Hitler and Trump are the products of democratic processes. They sell a bill of goods to the disenfranchised, angry, underclass -- and the selling is good.

Forgive them. But don't stop trying to get them to see what is wrong with electing the last president of the United States of America.

Market Fundamentalism is an Existential Threat

I did not know when I was a young man that my field of study, economics, would some day become the basis of a religion, one powerful enough to threaten the very existence of human beings.

Neoclassical economics was rightly proud of one of the more brilliant proofs in the history of the world. The proof began with clear and focused inspiration by Adam Smith, carried on through the 19th century, especially with Ricardo, the Austrian marginalists, and Walras; was modified critically by Pareto; and was parsed and formalized by the modern general equilibrium theorists and greats such as Arrow and Debreu.

That proof said something extraordinary. It said that if certain exacting conditions could be fully met, a free market system is provably the best economic system imaginable, best meeting the needs of individuals in a society that embraces it.

This is not merely an ideological assertion. Not rhetorical. Not a point of view. This is the product of a massive compilation of mathematical and logical argument. It is not to be dismissed merely as a matter of politics -- at least, not by the rational.

Many took this quite seriously, as they should. Many argued very forcefully that capitalism must be assertively advanced at the expense of other, lesser, systems. The belief in markets, the belief in capitalism, took on a religious fervor. In its extreme form, it took on the form of faith-based dogma, a body of belief best described as market fundamentalism.

Good economists understood that the proof, nifty and clever as it was, is subject to those "exacting conditions." Good economists understood that the proof says IF those conditions are met perfectly THEN the case is made.

Unfortunately, two things are undoubtedly true, and all good economists know both.

One, those conditions are never met, and have never been met. That is, the proof in favor of capitalism is a proof in favor of one economic system over another in a fictitious world of theory only.  A world that does not and has never existed.

Two, and it took another profound proof to understand this, economists discovered the second best theorem that says, in short, that if you do not meet all those exacting conditions perfectly (say you meet them all approximately) there is no guarantee that the results will resemble the results of perfect competition at all. In other words, economic systems are subject to a form of chaos such that 100% of the conditions lead to something optimal, yet 99% of the conditions may lead to something awful. Catastrophe theory in action.

As the conditions are never met, there is no economic theory that says that in the real world there is actually a general case for capitalism. The case for capitalism must be made on a case-by-case basis, examining the well being of people before and after they move to and from capitalism to and from other economic systems.

None of this has stopped the Market Fundamentalists from carrying on, quite dishonestly, as if economists have provided them with a sacred text that says that unfettered markets are good for all of us. They fill the Congress, think tanks, and other places of influence, pushing for the interests of the few (capitalism does remarkably well for the 1%) but pushing for them disingenuously in the name of a political-economic system that they claim, feverishly, is good for everyone. But the evidence says this is palpably untrue. Some forms of capitalism in many places have done the poor grave harm; life-and-death harm is exceedingly common.

And it is not just about inequality. It is also about human survival, as capitalism allows powerful parties who are grossly enriched by unfettered environmental regulation to destroy our air and water and biosphere broadly for profit. They do so in the name of market fundamentalism, literally mocking those who would ask, can we not do better by collectively acting as if we all matter? If extinction by environmental devastation is the outcome on the one hand, we must surely consider alternatives to a system that is killing us (and many innocents who have neither say nor profit in our system).

As Naomi Klein says, "this changes everything." Political economic discourse must admit that capitalism, at least in its current form, may be lethal. Reasonable people examining alternatives may disagree. E.g., is Sanders' social democracy, what he calls democratic socialism, nearly enough?  But those who would trot out their market fundamentalism, and deny most of the scientific and other evidence before our eyes, in order to continue to profit from their special place in the system, are guilty of negligent homicide -- of entire species, homo sapiens, and many others. This is a hanging offense, but if we do not stop them, there will be no one left to hang them when we reach what the Cambridge University Center of Catastrophe Studies considers the limit beyond which the last 100,000 human beings, living in a stone age of sorts, can never be expect to bounce back. This tragic end to humankind may take place in the next century.

When the last woman standing pounds her fist into the earth and curses the rest of us, it will be far too late to say "I told you so."  Can the market fundamentalists be defeated in time?  We may have already run out of time, but our only hope is to take action today.  A Republican Congress is likely to stand in the way of implementing the Paris Agreement on Climate Change, as it is a very late attempt to turn around environmental destruction. The fate of humankind may well hang in the balance of the Congressional elections of 2016.