There’s nothing original here (and apologies for the less-than-clever subject). I just wanted to do a drive-by and point out/quote approvingly a couple good posts from David Ruccio about Paul Krugman’s role of inequality and the crisis. First,
Krugman’s clearly in trouble, and his mainstream economics training is not much help. So, let’s offer him some assistance: First, he needs a theory of inequality, a theory of value that explains the conditions and consequences of the growing gap between wages and productivity. Call it a theory of exploitation. Then, he needs to trace the effects of growing exploitation on both wage-earners (who go into debt to maintain consumption) and profit-takers (who funnel one portion of those profits into the salaries of managers and another portion into new financial instruments). Call it a theory of financial fragility based on capitalist exploitation.
Then, after reviewing some a new CBPP report, Ruccio concludes that the tax code is not a sufficient mechanism to address inequality:
So, if we want to understand the links between inequality and capitalist crises, we need to start by analyzing the growing gap in the distribution of income prior to the onset of the crises. And if we want to eliminate that gap and avoid the next crisis, we have to move beyond the class structures of capitalism that created them in the first place.
Also, unrelated, Ruccio has a nice post on the anti-blog essay that has gotten so much attention the last few days. I’ll just chime in that I feel perfectly inadequate at doing anything other than questioning, but that there is real value in that, and other bloggers who do the same should keep it up. I’m aware that I often go well past the questioning stage and into providing answers, but it’s usually just thinking out loud. I’m guessing this is the same for many other bloggers too, who are seeking some sort of discourse. The more bloggers we have, the wider and more heterodox the discourse can be.
Finally, I’m vacation-blogging from Germany, so I’ll have a few thoughts tomorrow based on anecdotal observations from the country. Sneak preview: the landscape, citizenry, and architecture are way more awesome than the deficit hawks at the top of their government.