Yves has invited me to participate in her annual fundraising campaign, suggesting that I share insights on misguided ideas within the realms of economics and geopolitics. For nearly two decades, Naked Capitalism has powerfully fought against the spread of subpar economic theories and the misleading rhetoric that accompanies them.
To combat this ideological misinformation, I recommend contributing to Naked Capitalism. Supporting this platform enables a broad and critical discussion among its contributors and commentators, ultimately striving to address the inequalities embedded in current systems of power and finance. Please consider visiting the Tip Jar to support this important work. After all, any economist would argue that contributing generously to Naked Capitalism serves your best interests.
This initiative is particularly crucial in light of the looming financial crisis. We’re navigating through a mixture of fake news and misguided cause-and-effect perspectives, especially influenced by members of Trump’s cabinet. The media amplifies their neoliberal remedies, allowing them to sidestep the profound systemic issues that should not be ignored.
At Naked Capitalism, we are unafraid to tackle these uncomfortable truths.
In compiling a list of misguided economic ideas, it became evident that many of these issues stem from a problem of vocabulary. The language used often resembles Orwellian doublespeak, designed to distort reality, misdirect blame, and create a false dichotomy, as evident in the current policies of both major political parties. There’s a prevailing narrative suggesting that the labor force, debtors, and what Mitt Romney has referred to as “takers” are demanding too much, thereby burdening his class of “makers” with increased taxation. Social Security and Medicare become focal points in portraying these programs as excessive handouts to those deemed less deserving.
This narrative inverts the classical idea of a free market. It proposes that ‘free’ means free from economic rent, perceived as ‘unearned’ by the so-called takers, while our contemporary approach, known as neoliberalism, favors financialized rentier income. Additionally, it overlooks the fact that the very notion of a “free market” is somewhat contradictory, as markets rely on contract enforcement, which necessitates state intervention to resolve disputes.
The rhetoric aimed at undermining public measures intended to safeguard the vulnerable frames such protections and progressive taxation as unwelcome encroachments upon “free markets.” It erroneously claims that wealth polarization and deindustrialization stem from a Darwinian process favoring the fittest, rather than the most predatory actors in the economy. This viewpoint conveniently ignores the financial exploitation draining resources from markets for tangible goods.
A pressing example of this trend is the Republican effort to align with Democratic members in a bid to “save” Social Security by proposing cuts, similar to the infamous Grand Bargain sought by President Obama. This pretense suggests an inherent crisis, implying that the so-called “problem” cannot be remedied easily. Advocating for an increase in Social Security and Medicare contributions, particularly from high-income individuals who currently contribute nothing, is a simple and effective solution. Furthermore, it’s important to challenge the misleading idea that Social Security and Medicare cannot be accounted for in the national budget, as is done for military spending. There’s no necessity to pre-fund Social Security—or even the Post Office, for that matter—another common argument meant to prepare the way for their privatization.
The optimal approach would be to prevent the financialization of Social Security and pensions entirely. This represents a critical flaw in the concept often labeled as pension-fund socialism (more accurately referred to as pension fund finance capitalism)—essentially coercing employers and labor into forced savings. These funds end up lending to the government (for Social Security) or being invested in stocks and bonds, and increasingly private equity, which inflates financial asset prices. Consequently, wages become disconnected from spending on real goods and services.
This shift has resulted in the transformation of industrial capitalism into finance capitalism. Another Orwellian twist lies in the misleading term “pension fund socialism,” which implies that workers are somehow miniature capitalists, investing in stocks and bonds via mutual and pension funds.
The 19th-century notion of socialism envisioned a natural progression from industrial capitalism to a mixed public/private economy, where governments would provide essential services at subsidized or no cost instead of privatizing them to extract monopoly rents at inflated financialized prices.
I have aimed to illustrate what I perceive as the overarching theme of Naked Capitalism’s ongoing critique of today’s neoliberal deindustrialization. We all share concerns regarding the complicity of the Democratic Party in this trend, which often finds itself at odds with Democratic Socialists who seek a more significant role, as opposed to merely symbolic distractions from the true essence of the Democratic National Committee—the softer facade of the hard-right financial capitalism associated with Wall Street and the neocon military establishment.
So, I urge you to stand in solidarity! Support this platform as it strives to empower ordinary citizens. Please visit the Tip Jar and contribute generously. Your support represents a charitable act of mutual aid aimed at fostering a richer dialogue and creating a better society.
