Feeding Monopolies And Zombies

Made in the USA: Socialism for the Rich. Capitalism for the Rest

- Thomas L Friedman

I understand why Democrats are fuming. Donald Trump ran up budget deficits in his first three years to levels seen in our history only during major wars and financial crises – thanks to tax cuts, military spending and little fiscal discipline. But now that Joe Biden wants to spend more on pandemic relief and prevent the economy from tanking further, many Republicans – on cue – are rediscovering their deficit hawk wings.

What frauds. We need to do whatever it takes to help the most vulnerable Americans who have lost jobs, homes or businesses to Covid-19 – and to buttress cities overwhelmed by the virus. So, put me down for a double dose of generosity.

But, but, but … when this virus clears, we ALL need to have a talk.

There has been so much focus in recent years on the downsides of rapid globalisation and “neoliberal free-market groupthink” – influencing both Democrats and Republicans – that we’ve ignored another, more powerful consensus that has taken hold on both parties: That we are in a new era of permanently low interest rates, so deficits don’t matter as long as you can service them, and so the role of government in developed countries can keep expanding – which it has with steadily larger bailouts, persistent deficit spending, mounting government debts and increasingly easy money out of central banks to finance it all.

This new consensus has a name: “Socialism for the rich and capitalism for the rest,” argues Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, author of ‘The Ten Rules of Successful Nations’ and one of my favourite contrarian economic thinkers.