Tag Archives: glenn greenwald

Glenn Greenwald On The New Yorker‘s Admission

Since the U.S. elections results, the media has been hysterically claiming that Hillary Clinton lost the election because of “Russian hacking”. This is mainly to suffocate the debate on why Clinton really lost. A lot of journalists leaning Hillary Clinton before the election do this Russian hacking thing regularly either on TV, or on Twitter or in their articles. Even Paul Krugman has been mentioning Vladimir Putin’s name in almost every article since Nov 9.

There is of course little truth to all this. The main reason this story has attention is that Julian Assange’s WikiLeaks leaked emails of John Podesta, a former White House chief of staff. It’s true that Russia tries to hack the U.S. government servers regularly and hence it’s become easier for people promoting the Russian hacking story to claim that WikiLeaks’ source is the Russian government. But nobody has given any proof of this, yet.

But instead of stopping, the hysteria keeps continuing. Recently The New Yorker published a 13,000-word cover story (Mar 6, 2017) on Trump and Russia/Putin. 

The online version has this header image:

But toward the end of the long essay, The New Yorker makes this admission:

No reasonable analyst believes that Russia’s active measures in the United States and Europe have been the dominant force behind the ascent of Trump and nationalist politicians in Europe. Resentment of the effects of globalization and deindustrialization are far more important factors.

So despite so much hysteria, the magazine is conceding to the effect of globalization and de-industrialization on workers.

Glenn Greenwald of The Intercept has a nice critique of The New Yorker‘s cover story. He says:

As long as the Russia story enables pervasive avoidance of self-critique – one of the things humans least like to do – it will continue to resonate no matter its actual substance and value.

And quoting the cover story’s reference to globalization and deindustrialization, he says:

As Even The New Yorker Admits™, the primary reason for Trump, for Brexit, and for growing right-wing über-nationalism throughout Europe is that prevailing neoliberal policies have destroyed the economic security and future of hundreds of millions of people, rendering them highly susceptible to scapegoating and desperate, in a nothing-to-lose sort of way, for any type of radical change, no matter how risky or harmful that change might be. But all of that gets to be ignored, all of the self-reckoning is avoided, as long we get ourselves to believe that some omnipotent foreign power is behind it all.

Donald Trump has to be resisted but a strong alternative would not be neoliberalism.

The Soon-To-Be Conventional Wisdom: “Fiscal Policy Is Not So Good”

Donald Trump is the President-elect of the United States. It hardly needs to be mentioned how bad his campaign was. Glenn Greenwald rightly called him an abusive, misogynistic, bigoted, scary, lawless authoritarian.

However on the economic scale, Trump’s plans seem to be to the left of Hillary Clinton. Trump wants to pump the prime, meaning do a fiscal expansion and also put tariffs.

Trump is yet to take his office, but the narrative change about fiscal policy has already started. The important thing to remember is that this is done by economists who might otherwise not object to it – at least the fiscal stimulus.

In other words, just to oppose Trump, economists are on the path to build a conventional wisdom that fiscal policy is neutral or impotent or even destructive if it’s expansionary (as in higher expenditure and/or cuts in tax rates).

Example: Lawrence Summers’ article A Badly Designed US stimulus Will Only Hurt The Working Class for Financial Times. While obviously unable to deny the importance of fiscal expansion (because it works), Summers says:

I am optimistic regarding the efficacy of fiscal expansion. But any responsible economist has to recognise that, past a point, it can lead to some combination of excessive foreign borrowing, inflation and even financial crisis. As Dornbusch showed, in emerging markets this can happen quite quickly. In the US the process would take longer.

Moreover, he also goes on to argue that China is not gaining unfair advantage by keeping its exchange rate at a highly devalued level. Notice the change in tone in Summers’ language. From writing about how the constraints are far, Summers is now saying that fiscal policy is not that good. Surely he’s using a language to hedge himself —as any economist should do—but he’s clearly not saying that, “Fiscal expansion will be good for the US economy. Trump should rather design taxes to be progressive” but instead, giving innuendos that fiscal policy is not that good.

Even a non-progressive system of taxation or even tax cuts for the wealthy can be expansionary. It raises inequality but the size of the pie is still rising. To me it’s still better than a neutral fiscal stance. But Summers’ language is such that it is worse.

Obviously no economist will jump overnight to shifting his/her position to saying, “fiscal policy is impotent or worse expansion destructive”, after the elections, from a position, “fiscal policy should be expansionary” before the elections. So conventional wisdom will be created slowly over the next few months – slowly manufacturing constent, borrowing the phrase from Noam Chomsky.

Is my reading of Summers wrong? Time will tell! But why didn’t Summers ever complain about the non-progressive system of taxation earlier?