October 31, 2013
Dedicated to David Wright who is about to celebrate his 50th birthday.
Alan Greenspan the former chair of the Federal Reserve has just published a book an occasion that allows time for reflection. In his pomp he was known as Saint Alan and the economic consensus he helped shape, today appears unruffled and widespread. The austerity programme followed by the UK government recently commended by Greenspan, a supporter of George Osborne. One of the important ingredients for economic success according to Mr Greenspan (speaking several years ago) is the need for `growing worker insecurity which reduces pressure for compensation and decent working conditions` the UK government is following that piece of advice to the letter. Meanwhile in the USA wealth resides in the hands of a tiny fraction of the population a `section so small that the census doesn’t even pick it up…a tenth of a percent of the population`. This has political implications because power is held in limited hands and helps explain the ideological hinterland of Barack Obama, a centrist amid a right wing consensus. Unsurprisingly there has been no Obama New Deal. Given this situation, one need not wonder why adherence to the market continues unabated. Even though the crash of 2008 is considered worse than 1929, but in the 1930s a new consensus emerged, while today a conservative orthodoxy dominates. Read more of this post