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“Seeing the System: Alan Greenspan, Unemployment, and the Validation of Radical Analysis


Tim Wise

"What’s

the difference between a radical and a liberal?" It is a question I’m

regularly asked at lectures, usually by college students struggling with their

own sense of the world, trying desperately to figure out where they stand on the

seemingly endless spectrum from right to left. Often it is put to me by College

Democrat types: folks who are frustrated by their party’s lack of commitment to

social and economic justice, but who can’t quite bring themselves to break with

the group they consider the only alternative to the far right.

Usually,

I answer the question in the fairly predictable way: by explaining that at the

most basic level, the difference between radicals and liberals is one of focus,

and where one places the crux of the problem for our current predicament,

whatever that might be. In terms of economics, liberals tend to believe that the

larger system of which we are a part is basically just, and that injustices and

negative goings-on within that system are mere unintended consequences of an

otherwise well-oiled and beneficent machine: a little tinkering here, a little

reform there, perhaps a little more money for those at the bottom, and

everything will basically be O.K.

On

the other hand, the radical believes that the system itself is the problem: in

terms of economics this means that the system of profit does not create hardship

as the unfortunate sidelight of an otherwise warm-and-fuzzy social order;

rather, we believe that the pain experienced by people under such a system is

very much inherent to that system, and is in fact required by it in order to

function. People are out of work in such a system, and thus poor and even

destitute, not because the system is breaking down; but indeed, because it is

working exactly as intended.

Now

at first, this is an analysis that most don’t want to accept. And that’s no

surprise, as "seeing the system" goes against everything most of us

have been taught since we were young: the idea that one can be whatever one

wants if one simply tries hard enough and plays by the rules. The notion of the

U.S. as a pure meritocracy where individual failings are just that-individual,

is a very seductive ideological posture, and one that few have ever subjected to

real challenge.

The

good thing for those of us who are radicals however, is that every now and then

we get a little help in proving the larger point from the most unlikely of

sources, and this week was no exception. For as I write this, Americans have

just been told that we must brace for a ratcheting up of interest rates: three

times in one day as we enter May, and another likely hike in the middle of the

month. And why? Well, as Federal Reserve Chair Alan Greenspan explains, the

economy is too healthy, unemployment has fallen too low, and wages-God

forbid-have started to inch upward for too many, thereby raising the specter of

dreaded price hikes. As such, it has now become necessary according to the

worldview of the Fed-one that is shared by all major players in both the

Democratic and Republican parties and certainly by their Presidential

candidates-to raise the cost of borrowing money, thereby cooling off the

expansion and hiring spree, and perhaps even nudging the unemployment numbers

back up a bit.

But

wait: what was that? Intentionally slowing down job and wage growth?

Intentionally doing something to push unemployment up-and thus, put folks out of

work? Exactly right, and thus, it is Alan Greenspan who has demonstrated this

week the accuracy of radical analysis as to the nature of the economy under

which we labor and live. This former devotee of the market-worshipping,

pseudo-intellectual cultist, Ayn Rand, now demonstrating clearly that pain and

suffering, low wages and poverty are not the result of individual moral failings

or a decline in the Protestant work ethic, but rather, are built-in to the

nature of modern capitalism.

The

fact that wages for most workers are still at lower real dollar values than they

were in the late 1970′s, or that most of the wage gains have been at the top of

the employment structure and that over 40 million working people still lack

health insurance is of no consequence: according to Greenspan, things are too

good for too many people, and now it is time to tighten our monetary belt. But

what does it all mean, outside the confines of economists’ models and reserve

bank meeting rooms?

Well

consider this: when the Labor Department says the unemployment rate is 3.9

percent-the current official rate and a 30-year low-this is hardly an accurate

depiction of the joblessness picture in the U.S. After all, the official

unemployment rate doesn’t include those who have grown so discouraged by their

job prospects that they’ve stopped looking for work, nor does it include the

many who work only seasonally and so they don’t actively seek employment for

much of the year, nor does it count those persons who are able to pull down only

a handful of hours-perhaps temping-and instead counts these as if they were

every bit as employed as the full-time salaried employee. If these persons were

counted in the official unemployment/underemployment rate, the number of such

folks would at least double, coming to around 8%, or perhaps even as high as

10%. That the Labor Department does in fact keep this number-called the U-7 rate

but never reported to the general population-is only further confirmation that

the propaganda system in this land requires intentional obfuscation of the true

state of economic affairs.

And

so it is essentially a matter of official monetary policy to maintain

unemployment at around 8-10% of the potential workforce-around 9-11 million

people in all-so as to keep the economy from "overheating," which

really means to keep wages from rising too high, thereby forcing companies to

either raise prices or suffer a loss of profitability as workers pocket more of

the value produced by their output. If we assume that many of these 9-11 million

unemployed and underemployed persons have dependents, and that lacking steady

income they likely also lack bankable wealth-producing reserves to call on in

hard times, it is fair to estimate that over 20 million Americans are stuck in

the ranks of the poor and near-poor thanks to the conscious decisions of

economic elites to keep them there.

The

doors that this simple and readily apparent fact of American life has the power

to open are substantial: after all, if people are out of work and poor (and

thus, often in need of public assistance) because of a deliberate economic

policy; and if, indeed, the destitution of these individuals is something which

is required so that the rest of us may enjoy lower prices by maintaining a

certain degree of slackness in labor markets, then not only should we not

disparage the poor for their poverty, but indeed, we should perhaps consider

them among our most noble citizens: sacrificing their own good for the

well-being of us all.

To

witness what the Fed is doing this summer to interest rates-all because workers

are supposedly doing too well-is to witness perhaps one of the central

organizing issues of the new decade: simply put, that working people are hurting

and will continue to hurt in this system so long as the interests of the owning

class are put ahead of those of everyone else. As long as jobs and wages are

seen as zero-sum games-and profit maximization seen as the penultimate goal of a

national economic policy-working people will continue to be played off against

one another, rotating in and out of financial instability. To highlight the

structural nature of economic hardship-and the Fed’s actions make this much

easier for radicals to do effectively-is to provide a new way of discussing so

many of our most vexing political and social issues. It is to allow citizens to

potentially rethink their stereotypical and negative views about the poor, about

people of color (blamed for "taking" jobs from whites), and the real

sources of whatever pain and insecurity they may be experiencing in their lives.

It is to launch a frontal assault against the myth of meritocracy and the

"magic" of the marketplace, and it is to make clear the overlapping

worldviews of the two dominant political parties in America: a clarity that will

be desperately needed if we are ever to build an effective alternative to the

status quo.

So

this week, let those of us who are radicals do something we probably never

expected to find ourselves doing: thanking Alan Greenspan for making the nature

of our economic beast more apparent than any army of sociologists could ever

hope to do. And let us go forward, using the facts pulled from the very

headlines of the mainstream press, as we strive to make the public "see the

system" for what it is so they may join in an effort to replace it.

Tim

Wise is a Nashville-based activist and educator. He can be reached at [email protected]