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Robert Barro’s disgusting piece in the New York Times

September 11, 2011

One would think Harvard University would be more than a bit embarrassed to have such a right wing hack as Robert Barro out in public.  That a professor (of economics) could write such drivel as he has today is an indictment of our educational system, the economics profession, and the mainstream media.

He titles the piece “How to Save the Economy”; it should be called “How to Save Oligarchy”.  The article could easily have been written by any 19th century servant of aristocracy and can’t possibly be considered “economics” if, by that term, we mean some form of quasi-objective science.

He begins with the standard oligarchic call for selective austerity: “Today’s priority has to be austerity, not stimulus”… and “fiscal discipline has to start now”.   He calls for an increase in the eligibility age of Social Security and Medicare, a decrease in future benefits through stricter inflation indexing, the elimination of various deductions that mostly benefit the middle and upper middle classes, and of course a quite non-austere lowering of the marginal income tax rate for individuals.  He then proceeds to recommend an austere consumption tax of 10% and a non-austere elimination of both the corporate and estate tax.

Barro pathetically brings Keynes into his argument.

 …John Maynard Keynes understood in his 1936 masterwork, “The General Theory of Employment, Interest and Money” (the first economics book I read), the main driver of business cycles is investment. As is typical, the main decline in G.D.P. during the recession showed up in the form of reduced investment by businesses and households.

What drives investment? Stable expectations of a sound economic environment, including the long-run path of tax rates, regulations and so on. And employment is akin to investment in that hiring decisions take into account the long-run economic climate.

If Barro actually read this work he’s in desperate need of a refresher.  Yes, Keynes determined that investment was the main driver of the business cycle but, completely counter to Barro, his major conclusion was that we could not at all rely on private investment to be sufficient and needed instead to substantially socialize it.  Keynes provides exactly zero support for Barro and it’s completely disingenuous to bring him into his argument.

Barro calls his recommendations “market-friendly” but that’s completely false since the capitalist society he supports is a near pure oligopoly having little to do with what we normally think of as a “market”.  Contra Barro, 21st century capitalism, along with its merry band of well fed supporters, are best described as market-hostile. The corporations that dominate the globe – just 500 corporations account for an incredible 40% of global revenue – do everything within their great power to minimize and restrict the competition that true markets require.  If Barro truly sought market-friendly policies, he would need to push for drastic regulation or break ups of all the major corporations in the world today.  The “market-friendly” label is just a quasi-democratic sounding fig leaf designed to hide his real class based agenda.

How is it remotely possible that a sane response to the collapse of global capitalism could be a further cut in worker purchasing power through consumption taxes and attacks on vital retirement and health programs?  Or cuts in the tax rates of an oligarchic class that’s never been richer or smaller and has no idea what to do with its existing hoards?  Barro has no claim to science and, unless Harvard has a Department of Propaganda for Oligarchy, should be dismissed immediately.

From → Dynamics, Suppression

  1. Tom Hickey permalink

    Follow the money.

  2. Barro is a national resource. However, he is in the wrong department. He should head a department of Anti-Economics. Or have a lifetime Federal appointment as False Counselor of Economic Advice.

    Economists worldwide should check their policy advice and theories against him.They should go back to the drawing board and very, very, very carefully recheck if they agree on any point with him – or with most other members of the Harvard or Chicago faculty.

  3. An excellent insight Calgacus into how to utilize such a great national treasure. And glad to see you have a blog going!

  4. The last weekend New York Times was really polluted with garbage coming from the Harvard Economics Department. Barro and Mankiw — the two leading (pseudo)”intellectual” servants of the plutocracy. They don’t even feel the need anymore to camouflage their propaganda with some economic argument.

  5. Thanks for the compliments, Jim. Haven’t been able to do as much at my blog as I would like, but hope to in the nearish future.

    I am not entirely unserious above and here. Most disciplines/sciences have one basic aim, however much academia and academics try to avoid it. Finding out The Truth. But the dismal science of economics has another primary aim. How are we going to concoct fairy tales that will make rich people richer?

    But modern mainstream economics – well – I think there is some genuine intellectual interest in a strange phenomenon there. Take these two aims #1 Make rich people richer #57c FInd out the Truth (or avoid it). I don’t think they satisfactorily explain modern mainstream economics. It’s not just finger painting with the coproliths produced by “regular economists”. It manages to be always exactly wrong in ways that don’t clearly make rich people richer and don’t seem to have much to do with Truth-seeking or Truth-avoidance /lying. People like Barro seem to be always exactly wrong more than they should be by random chance. It’s as if your horoscope were always exactly wrong, your homeopathic remedy always poisonous, your alchemy capable of turning gold into lead.

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