Who are you going to believe, me, or your own lying eyes?
A lot of digital ink has been spilled recently on the rise and spread of agnotology in America. Why don’t Americans listen to experts anymore? Why don’t they trust scientists? Why do they instinctively assume their leaders are lying to them about everything? Why don’t they trust mainstream news outlets anymore? Why are they instead listening to “outsiders” who are obviously shills and charlatans? Why are they listening to “alternative” medical practitioners and quack doctors? Why are they giving credulity to seemingly outrageous conspiracy theories shared online? Why do they reject basic facts?
A lot has been written about that already, so I’m not going to review it here. I’m just going to interject one reason that I haven’t read about anywhere else that I know of.
That reason is economists.
Specifically, the fact that economists told middle America since at least the 1980s that free trade would be good for everyone in America, and that anyone who said otherwise was an ignorant rube who didn’t understand basic economic “science.”
The economists who incessantly proffered this view were “experts” from the most prestigious schools in America—Harvard, Yale, Stanford, Princeton, Georgetown, the University of Chicago, and the like. They claimed it was a settled argument, and that economics had “proven” it beyond the shadow of a doubt through equations as surely as we had proven the movements of the stars and planets. Even the way they framed the argument backed this up. They invoked the “Law” of comparative advantage, suggesting that this was a law of the universe on par with those of physics or chemistry. Anyone who disputed it might just was well believe that water runs uphill or the earth is flat, they claimed (although they weren’t above invoking a little magic on occasion):
[David] Ricardo attempted to prove theoretically that international trade is always beneficial. Paul Samuelson called the numbers used in Ricardo’s example dealing with trade between England and Portugal the “four magic numbers”. “In spite of the fact that the Portuguese could produce both cloth and wine with less amount of labour, Ricardo suggested that both countries would benefit from trade with each other”…Ricardo’s theory of international trade was reformulated by John Stuart Mill. The term “comparative advantage” was started by J. S. Mill and his contemporaries… (Wikipedia)
This became a nearly universal creed among economists and journalists. If there was one article of absolute faith, this was it. Surveys of economists indicated that nearly 100 percent of them agreed with statements about how free trade is always beneficial, and that it always benefits everybody. These economists claimed that free trade was an unstoppable force of nature as inevitable as the tides or the seasons, and that it would make all of us much better off in the long run. The most notable proponents of this creed wrote for the influential New York Times: Princeton economist Paul Krugman; and Thomas Friedman, whose boundless enthusiasm and turgid prose in defense of untrammeled trade and cosmopolitanism seemed at times to border on the absurd. Friedman, a multi-millionaire, published several books on the topic over the ensuing decades, celebrating the wonders of globalization and free trade.
So these were the so-called “experts” Americans were listening to throughout the eighties, nineties, and 2000s, right up until 2008.
Free trade—and its universal benefits—became the standard orthodoxy for both major American political parties beginning in the 1990s. The effect of this cannot be overstated. There truly was no alternative. And voters who pushed back against this orthodoxy were belittled and marginalized by both political parties in the ensuing decades.
Now picture the reality on the ground for ordinary middle Americans, particularly in areas that are considered to be Trump bastions in the heartland of the U.S. today.
Businesses that had been the cornerstones of communities for many generations began to disappear left and right. They either lost out in the newly globalized struggle for profits and went under; moved most of their operations overseas to take advantage of cheaper labor; or were bought out in the accompanying wave of financialization and were “restructured.” In each and every instance, these businesses—formerly the sources of prosperity for so many Americans—were gone, never to return. This happened throughout the eighties and nineties.
Just like an ecosystem, a local economy is a sort of trophic pyramid, and once the primary producers have died off, it will affect all the smaller levels of the pyramid above. The money circulating in the community began to dry up for other businesses in the “food chain” of the local economy like small businesses, bars and restaurants. The people who would have been their customers no longer had jobs, and hence the money to pay for local goods and services. What this meant was that small local businesses with tight margins now had less customers and subsequently went under. This led to the phenomenon of “boarded up main streets” seen in small towns all across America. All as the result of free trade agreements.
At the same time, a flood of cheap consumer goods inundated the market in the United States. These ultra-cheap goods were shoddy, Chinese made garbage, practically made to be thrown away, but Americans had no other choice but to buy them thanks to their shrinking incomes and the lack of alternative sellers who had long since gone under due to cutthroat price competition. Gigantic mega-businesses who could most effectively take advantage of far-flung global supply chains drove local businesses under, even while wresting generous subsidies and tax breaks from local governments. As local businesses fell one by one, this led to a domino effect throughout local economies where the businesses that were once cornerstones of the community went under, their market niches invaded by the transnational big-box chain stores. The small corner store getting replaced by Wal-Mart became a cliché repeated thousands of times over across the United States in the past several decades. Everybody knew it was happening, but no one could stop it.
In almost every small town in America, commerce today is dominated by a few behemoths like Wal-Mart, Home Depot, Lowe’s, Target, Costco, and chains like Applebee’s, Chuck E. Cheese and Taco Bell. All the money that would have circulated in the local economy was instead pulled out and sent to stockholders in New York, San Francisco, London, and other distant financial centers. Whatever small businesses that remained were dealt another successive death blow by the rise of online shopping and the dominance of Amazon’s monopoly over e-commerce. This “retail apocalypse” was ignored by politicians of both parties. Additionally, local newspapers shut down because they could no longer support themselves through ad revenue—everything was now increasingly online and all the ad money now went to Google and Facebook. This led to information black holes in small towns all over America. People now increasingly went online to get their information, and this online world became a perfect vector for spreading disinformation by bad-faith actors like bots and trolls.
And what happened to the jobs? We were told that people who worked in factories were expendable, and that “making things” was only for dumb losers. Farm jobs had long since been eliminated thank to Big Agriculture. The party that ostensibly defended the working class just told everyone to go out and acquire “more education,” and that this would somehow solve the problem. Yet education did not become more accessible at this time, rather it became prohibitively more expensive and harder to access. Four-year college degrees were practically unobtainable without extensive parental support. The staggering amounts of debt one had to take on without this support practically ensured a lifetime of indentured servitude. This debt became impossible to discharge even in bankruptcy—a change supported by both political parties. Meanwhile, collages and universities became virtual empires overnight, building pharaonic architecture to attract rich students with deep pockets (often foreign-born) and raising tuition into the stratosphere to compensate.
Those who had the financial wherewithal and academic inclination were able to escape to the few remote college towns and distant big cities where such colleges and universities were located. Everyone else was left to drown. The small towns fell into ruin. The Republican columnist Keven Williamson sneered that they “deserved to die,” although it wasn’t entirely clear whether he was referring to the towns themselves or the people living in them. And the other party was no different either, abandoning Middle Americans and making their pitch exclusively to those areas that were, in Hillary Clinton’s words, “diverse, dynamic and moving forward.” High-level Democrats openly enthused that they would have a solid electoral majority once the people in these small towns finally kicked the bucket.
It was a sorting operation on a grand scale—winners from losers, sheep from goats. The “losers” remained behind in the small towns that were drained of their most entrepreneurial inhabitants; the “winners” moved away to a handful of high-tech hubs and exurbs that were growing exponentially, especially in the Sun Belt. Because all of the economic activity was now concentrated in a very small number of cities, the cost of real estate in these cities exploded, making even educated, affluent “winners” economically precarious due to sky-high housing costs. Yet no one in the political or professional economic classes offered any real solutions, or even acknowledged that it was happening.
Meanwhile, back in the small towns, the only jobs left were those in the service industry that paid paid minimum wage or close to it—a wage that had peaked in the 1960s and declined ever since. Here is a graphic of the largest employer in every state. Notice that the “red” states are dominated by Wal-Mart.
The only other alternative was the “Eds and Meds” economy of colleges and hospitals. Both of these metastasizing economic sectors were predatory and extractive, bleeding their customers dry even as they provided the only source of employment in rural areas that paid above minimum wage and offered decent benefits (aside form the prisons that were increasing located in rural areas and filled with the economic “losers”). The graphic above makes this dynamic painfully obvious.
America became staggeringly unequal. An entire infrastructure of poverty developed consisting of payday loan stores, car title loan stores, cash-4-gold stores, blood banks, urgent care clinics, Dollar Stores, pawn shops, and other predatory businesses. Cash-strapped small towns instituted aggressive policing tactics to compensate for lost tax revenue, including issuing very expensive tickets for every minor infraction (which often disproportionately targeted minorities). Tent cities sprang up from coast to coast like dandelions in the springtime. At the corner of seemingly every major intersection and at every freeway off-ramp were people holding up cardboard signs begging for spare change. People started GoFundMe sites to pay for ruinously expensive health care costs, since their low-wage, part-time jobs didn’t offer health insurance coverage. Then, to add insult to injury, beginning in the late nineteen-nineties they now also had to compete for low-wage jobs with immigrants from across the border who were arriving by the truckload in small towns across America in a race to the bottom, while politicians of both parties looked the other way. Any concern over this situation was castigated as “racist.”
All this occurred even while billionaire monopolists become incomprehensibly richer. People in these towns who couldn’t make ends meet no matter how hard they worked were treated to the spectacle of America’s billionaires going to bed at night and waking up billions of dollars richer the next morning, day after day, while their own lives fell apart due to things like unemployment, divorce, drug abuse, arrests, and just plain old bad luck.
What was the “expert” response to all of this? How did the economists from Yale, Harvard, Princeton, Stanford, and other elite institutions react to this economic earthquake?
Free trade is good. Full stop. Anyone who says otherwise is a dimwitted dolt who doesn’t understand the fundamental laws of economics. Besides, nothing can be done about it. They pointed to the affordability and ubiquitousness of ultra-cheap goods made by sweated labor in the global South as proof positive that free trade had benefited absolutely everyone. “Just look at your iPhone!,” they exclaimed.
Americans in small towns and suburbs were also told by these same elite experts that their suffering and that of their close friends and neighbors was justified because Chinese workers were bring “lifted from poverty” even as Americans were increasingly falling into it. Any concern over the increasingly dire poverty and deaths in Middle America was derided as backward parochialism by by professional economists and the neoliberal politicians who listened to them.
These experts, of course, were the same people in big cities who owned almost all the stocks and had benefited handsomely from globalized free trade. These members of what eventually became known as the “Professional Managerial Class” had managed to insulate themselves from foreign competition through legal means such as hard-to-obtain licensing requirements and hyperexpensive education, even while valorizing “competition” for everyone else. Both political parties were one hundred percent in the tank for globalized free trade: the Democrats toothlessly pushed for more education and means-teased social programs for the poorest of the poor, while the Republicans preached an old-fashioned grit-and-bootstraps ethos that castigated people who fell behind for their own lack of gumption and blamed poverty on poor character and moral failings (e.g. having children out of wedlock, excessive drinking). Republicans claimed the real threat to Americans was “dependence on big government” rather than unemployment or economic disintegration.
This message was broadcasted incessantly day after day, week after week, month after month, and year after year by professional economists burnished with impressive credentials from America’s finest institutions. They all sang from the same hymnal in absolute harmony. I live in the Rust Belt, and it’s impossible to overstate just how aggressively this message was pushed throughout the eighties, nineties and early 2000s. There was no dissent in the mainstream corporate media; none whatsoever. The “losers” in this system were told that they deserved what they got, we were told, and each and every one of us were now competitors in the high-stakes, winner-take all struggle of globalism, whether we wanted to be or not. There was simply no alternative.
Yet older people remembered a time that it didn’t used to be that way. They remembered when people could easily find a local job if they wanted one, even without a staggeringly expensive degree and massive debt. When you didn’t have to move far away from your family if you didn’t want to. When you could afford to raise family on a single breadwinner’s salary. When you could buy a house in your 20s. A time when there weren’t quite so many boarded up storefronts, panhandlers, food banks, or people living in their cars. When small local businesses thrived instead of just Wal-Mart and Amazon. They told these stories to their children as if they were describing some sort of long-vanished and forgotten culture, even though it had existed within their own lifetimes. As the satirical Onion headline put it, “Remains Of Ancient Race Of Job Creators Found In Rust Belt.” But the unfortunate circumstance of institutionalized racism during this time period allows any sort of nostalgia for this lost era to be dismissed as “racist” by members of the PMC.
What did the highly credentialed experts in economic “science” have to say to these folks? Sorry pops, that world is gone forever, and it’s not coming back. Suck it up, buttercup. Or else they refused to even acknowledge that anything had changed. Educated academics like Harvard’s Steven Pinker told Americans that’ “You literally never had it so good,” as did columnists in the New York Times like Nicholas Kristof. Anyone who said otherwise was derided as a backward parochialist who couldn’t’ understand cold, hard facts. Concern over America’s domestic disintegration—i.e. ordinary Americans who had been harmed by globalization—was derided as hopelessly ignorant and racist by members of the PMC who disproportionately staffed the corporate media and academic apparatus.
So, given the experience of the average American on the ground that I described above, is it really any wonder that experts began to lose their credibility? The average American looked around them and saw with their own two eyes what was happening right in front of them. They saw the increasing joblessness, homelessness, and poverty. They saw how their neighbors were struggling to make ends meet. They saw the boarded up storefronts, the tent cities, the crumbling infrastructure, the payday loan stores, the aggressive police, the people living in their cars, the people working for peanuts at Amazon and Wal-Mart, the foreclosures, the opioid overdoses, the suicides, and on and on and on.
And what did the professional economists continue to tell us? That none of it was happening! There was nothing to worry about, they insisted. After all, the statistics informed us that everything was fine. Throughout it all, economists assured us that free trade was good for everyone, full stop, and both political parties agreed with that assessment. This was the unassailable word of the so-called experts—the very smart economic “scientists” with high IQs and fancy degrees.
During this same time period, economists also told the public that there was little to no inflation. Now there really has been very little inflation, based on what inflation actually measures—a sustained increase in the average prices of goods you normally buy over time. As stated above, the prices of goods actually fell during this time, due to things like global wage arbitrage, automation, price competition by emerging oligopolies, and efficiency gains. Whether it’s towels, furniture or silverware, previous generations often paid much more for their manufactured goods than we do. The price of computers and electronic goods has fallen sharply, to the point where even poor households can afford large flat-screen televisions and smartphones.
The problem is, the average American doesn’t understand what “inflation” is as economists define it. All they know is that their paycheck doesn’t go as far as it used to. They saw the costs of housing skyrocket. They saw education and health care costs practically double each year. Inflation doesn’t measure those things, and there is a good reason for that. Their costs are not determined as much by the overall supply of money as by status competition and monopoly. Real estate is a local market, and the reason for its precipitous rise in growing urban areas is the one we already touched on above.
Nevertheless, such sophisticated arguments fell on deaf ears. Economists persistently told Americans inflation was low, yet the fixed costs of necessities like housing and health care were killing them, which are the very things inflation indexes specifically omit! Economists did a poor job of explaining this logic to the public, in large part due to elitism. By eliminating the very things American were going broke paying for from the inflation calculus, people began to assume that economists were somehow “cheating” or “covering up” these costs on purpose. The fact that these were “official government statistics” made people lose faith in the veracity of what the government was telling them more broadly: “How can ‘inflation’ be low when a hernia operation coast $100,000 and my school just doubled my tuition?”
The other thing economists told middle America was the unemployment rate was low. This, of course, was measured by the “official” unemployment rate. Due to this rate being low, the politicians were able to wave away concerns from their constituents about rising costs and inequality. After all, if the the official unemployment rate was low, they thought, then what are these people complaining about?
But this official unemployment statistics covered up a very different reality experienced by ordinary people on the ground. Sure, unemployment was officially low, but most of the jobs were awful! Competition for higher-paying jobs became ever more fierce over the years, and good paying jobs with benefits ever more out of reach for most people, especially if you didn’t happen to live in an urban area. Big corporate employers in the service sector routinely pared back working hours to avoid paying benefits, and even you worked just one single hour a week you were counted as officially employed. Underemployment was also not counted, meaning that people who had gone out and gotten expensive degrees but could only find low-paying wage work were invisible in the statistics. People dropping out of the workforce were also not counted, and neither were prisoners—both significant numbers of Americans. Finding a job in the era of automation and outsourcing became something like a game of musical chairs.
So this divide between lived experience and “official” government statistics further deepened the rift and sowed mistrust in political institutions and credentialed experts.
The average American also didn’t understand complex financial institutions like the Federal Reserve that increasingly seemed to control everything from behind the scenes. All the average American saw was that Wall Street and the wealthy investor class were repeatedly bailed out and made whole at every turn, while the average citizen was left to drown during the financial crisis. This led to the rise of all sort of kooky conspiracy theories such as those outlined in the notorious best-seller “The Creature from Jekyll Island”, which has been aggressively pushed by libertarian conspiracy theorists like Ron Paul, who insist that “fiat money” is the real reason behind the nation’s economic pain. Such theories obscured the actual reasons for this pain, such as a generation of stagnant wages, financial engineering, the demise of unions, global competition, corporate consolidation, and both political parties being run by and for a small group of wealthy oligarchs.
This was the economists’ gospel in a nutshell: Free trade is good; unemployment and inflation are low. That was the mantra from their eighties onward through today. And, even though some of the confusion is based on misunderstanding, this “reality” described by economists was 180 degrees opposite from what most Americans have experienced in their own lives from the 1980’s onward.
So, given all of the above, is it any wonder Americans stopped trusting the experts?
Think about that. Let me just say that again: the experts told them that what they saw happening all around them was not actually happening. So that’s what I mean when I say that economists are a major reason why people have lost trust in both credentialed experts and the mainstream corporate media.
And yet they somehow they trust Donald Trump. Why? Because back in 2016 Trump acknowledged that what they saw all around them was actually happening! In fact, he was the only politician to do so. It’s true that a few others like Bernie Sanders did as well, yet the Democratic party was successful in stifling his message and keeping him off the ballot. The Republican Party, ironically, had much less control over its rank-and-file members. These members of the party finally had a candidate who said out loud what they all knew to be true, and had been true for a long time. He phrased it crudely, and with an undercurrent of xenophobia and racism, but at least he acknowledged what the experts had arrogantly and confidently told them wasn’t happening.
So is it really a surprise they now trust Donald Trump more than these so-called experts? Given what I outlined above, is any wonder that the people who live in the small towns and rural villages across the country transferred their faith and loyalty from the credentialed experts to Trump? After all, the credentialed experts had been saying that free trade was good for everyone for nearly forty years. Trump said otherwise, and was the only one who did so (outside of the dissident parts of the Left that had been expelled from the mainstream Democratic party and had no political home, that is). Given the number of times I referred to columnists at The New York Times above, is it any wonder why people in small towns believe that the Times is “fake news?”
Of course, as I’ve said so many times before on this site, economics is a pseudoscience, and economists are really pushing political agendas rather than doing any sort of objective “science.” But I believe that the sneering dismissal of the ignorant rabble that emanated from the ivory towers of academia over the past forty years of neoliberal globlization set the stage for the rejection of any and all expertise that we are now experiencing on the part of the common people. The blowback means that real scientists—actual, legitimate physical scientists and medical doctors—are not being listened too either, thanks to the specious scientific pretensions that economists claimed while free trade was gutting the middle class. To the average American, these are yet more experts pissing on their leg and telling them its raining, just like the economists did for all those years. Why should we believe them?
For example, the conspiracy theories invoked to explain why inflation was low in the statistics but seemingly high in real life took on a life of their own. After all, if you can believe in a secret cabal of bankers and politicians running the Federal reserve, and government statisticians manipulating the unemployment rate, is it that big a leap to believe in a secret cabal of businessmen deliberately engineering a recession, or a secret cabal of virologists secretly engineering a global pandemic? We’ve practically been primed to believe it thanks to the economists’ pretensions of dressing up of political opinions as economic “science” over the past several decades.
The real reason for the economic pain of so many Americans was obscured because it had to be. If people really knew the truth, it would inevitably lead to a push for Leftist politics of the type promoted by Bernie Sanders, and this is the greatest fear among the oligarchs who run America. To avoid that (from their standpoint, terrifying) outcome, the oligarchs had no choice but to peddle paranoid conspiracy theories as the alternative. But now, like the sorcerer’s apprentice from the fairy tale, they have lost control of their own creation. The politics of conspiracy and paranoia have been let loose from Pandora’s Box and are beyond anyone’s ability to control and manipulate at this point. The duplicity of economists, the corporate media and politicians pushing globalism as good for everyone has destroyed the credibility of all experts, not just economists. It has killed faith and trust in media and the experts, no matter how reasonable or accurate those experts may be. This will not end well. We are truly lost, and cannot even find our way to the truth anymore, nor recognize it if we could.
But it all started with economists. Remember that.
ADDENDUM: The economics profession was also instrumental in getting us to ignore environmental limits and denying the consequences of climate change. In doing so, they attacked the credibility of actual scientists, and that has also contributed to the lack of faith in experts we are seeing today.
13 thoughts on “The Reason Americans Don’t Trust Experts – Economists”
Absolutely terrific summation and explanation. Mirrors many of the things I wrote in my book about constitutional reform, True Reform. I live among the PMC, and certainly qualify as a member thereof by virtue of my education and socio-economic profile, but most of my neighbors just don’t get it.
Whenever anyone tells me about good unemployment numbers -whether in good times,”we’re practically at full employment!” or bad, “see the numbers aren’t like in the Depression!”, I trot at the Bureau of Labor & Statistics own numbers – the real unemployment figure. The U6 – marginally employed plus discouraged job seekers plus employed part time for economic reasons – stood at 18% at the end of June. That’s real unemployment, not the official U3 of 11.1%.
So, yes, you can never believe what an economist tells you, because they will lie to you even about facts.
A blogger I follow pointed out that unregulated capitalism results in “a wide variety of toothpaste choices at attractive prices for a population of people with no teeth.” (Chris Ladd of politicalorphans.com, formerly GOPLifer.)
I often read your work and wish I had some witty remark to make in the comments, only to find, at the end of the essay, that you’ve already said it all. Please write that book.
I’ll add only that I understand, thanks to your work (esp. pieces like this and your essays on neoliberalism), that I know subjectively what it’s like to live in an ideological state like the Soviet Union or North Korea. This is it. We’re here. Our society is just as ideological.
Great piece! The word ‘commoditization’ springs to mind:
A bad car is the same as a good car: it gets you from A to B.
Bad calories are the same as good calories.
An unskilled worker is the same as a skilled worker.
All belief systems are equally valid…
Great essay, I expect would nothing less from a “science” that created a fake Nobel prize to give itself legitimacy
This is a good article and I agree with it. The only thing I would add is that I don’t think economics is a ‘pseudoscience’ as much as it is a branch of psychology/sociology. Since the powers that be generally don’t like the conclusions of psychology/sociology in terms of how to address economic problems, we end up with economic models that completely ignore the real world. In the real world, consumers and producers don’t always behave rationally. Economics assumes rationality (also that being an informed consumer is not only possible but likely) and that’s the first big mistake it makes.
But I actually DID learn some useful things studying economics at the college level. For example, monopoly/oligarchy is profitable, true competition is not…so it will NEVER be in the interests of (rich, already established) capitalists to encourage true innovation and competition. Thus laissez-faire economics will always result in monopoly/oligarchy and wretched conditions for the working class. I wish more people understood this, it would help so much IMO.
You’re right, pseudoscience isn’t the right word. I’m not sure what the best descriptor is, although I think you’ve got it right–economics is psychology, and sociology and history as well, yet it proclaims itself supreme to all of those disciplines. Really it’s a subset of them.
It’s true that the ultimate goal of business is to circumvent the market and eliminate competition. You see this time and time again in the history of capitalism, from Standard Oil to Amazon. If the state constantly has to step in to make markets “competitive”, than how can we maintain the myth of laissez-faire?
I am a student studying economics, and I am very glad that I can read your blog, your deep thoughts in a very interesting presentation. Thanks for your work!
I thought I would check out what Krugman has actually said about free trade.
“Contrary to what some seem to believe, textbook economics doesn’t say that free trade is win-win for everyone. Instead, trade policy involves very real conflicts of interest…..The small groups that benefit from protectionism often have more political influence than the much larger groups that are hurt.” It was the politicians who promised to pass laws to take the gains of the winners and redistribute them to the losers and equalize things out so everyone won. The economists fault was that they believed the politicians.
Yup: see this https://getpocket.com/explore/item/economists-on-the-run?utm_source=pocket-newtab
It’s a bit like saying, “Well, that was more flammable than I thought,” after the house has burned down.
I mean, I’m glad he has adopted a more nuanced view. There’s not enough of that from influential people.
From my understanding, the assumption was that some of the overall economic gains would be used to cushion the blows of free trade.
But I can tell, you that magical asterisk was almost never highlighted or discussed in the vast majority of encomiums over free trade that were shoved down the throats of inhabitants of the Rust Belt over the past several decades. The editorials all described it as a win-win situation for everyone. The “losers” had no one to blame but themselves. Just hit the books.
What I’m wondering, is, what the heck made Krugman think that would happen? What would lead him to believe that in a post-Reagan America busily dismantling the welfare state and selling low taxes and small government, that there would be any serious attempt to deal with t fallout from free trade? Either he’s deceitful or naive, and neither one of those is complimentary.
“Krugman played a major part in attacking what he saw as economic ignorance by “strategic traders” who argued that U.S. jobs and wages might be seriously affected by competition from cheap labor in the developing world. When William Greider, the former Washington Post journalist, warned in a deeply reported book called One World, Ready or Not: The Manic Logic of Global Capitalism that developing nations were gearing up for major industrial competition that would mean “[s]ome sectors of Americans are triumphant and other sectors are devastated,” Krugman called it a “thoroughly silly book.” When Michael Lind, another prominent public intellectual, suggested (accurately) that U.S. productivity growth might not be enough to offset “the global sweatshop economy,” Krugman declared Lind to be ignorant of economic “facts” and said that “one should not expect someone who does not work in the field to be able to get it right without some guidance.” Krugman was no less kind to fellow economists who dared to question the free trade consensus. When Tyson was chosen to head Clinton’s Council of Economic Advisers in 1993, Krugman said she lacked the “necessary analytical skills.””
“It was all just bad economics, Krugman said. Don’t worry so much about what all the other countries are up to; things will even out thanks to neoclassical concepts such as comparative advantage, which allows all nations to benefit from open trade. Indeed, those who advocated anything resembling government interference in markets and “fair trade” (more tariffs, unemployment insurance, and worker protections) over “free trade” were usually branded protectionists and excluded from the debate. Clinton, reveling in his reputation as the “globalization” president, barely held a meeting on the fate of the industrially displaced. When his old Rhodes Scholar pal from the University of Oxford, Labor Secretary Reich, openly advocated reinvestment in education, training, and infrastructure at a time when Clinton was keen on deficit-cutting, Reich was also edged out of the conversation and, eventually, the administration.”