Like the Aztecs, our theory and practice compound terrible odds. These odds may be in line with the rationale of our belief system, but they contradict the data. For many, the current economic goal is not to reduce unemployment or to increase employment (inverse, and not necessarily correlated). It is to curry favor by re-framing the market policy’s actions for their own advantage. They want the Gods to reward “me.” Goldman Sachs recently issued a memo reaffirming this type of theory and practice, and its senate appearance had 100s of memos and e-mails that spun policy to its own purpose, even if it undercut the broader purpose of the policy.
From the cultural side of political economy, I am beginning to argue that the assumptions of the old model no longer hold because the motivation and action pathways have changed. I’m wondering when the Aztec priests caught on that their sacrifices weren’t working out.
The signs that the stimulus failed are in the success of the economy. What success, when there are no jobs? Fed Ex announced 45,000 temporary openings for the holidays, corporations are sitting on close to $2 trillion in cash, and Bank of America earned $2.78 billion in profit in the July quarter, Ford just reported earning $1.69 billion last quarter. Has outsourcing, cash hoarding, and profit expansion inhibited and blocked job growth?
In new, embedded culural assumptions, it could be that the new source of expansion is sourced in the permanent lost of jobs.