There was an UK Guardian article today (September 23, 2013) – The American dream has become a burden for most – which argues that the narratives about the American dream are becoming increasingly recognised as a “delusional myth”. The discussion is relevant for a number of growing research agendas that attempt to construct a new understanding of what has been happening over the neo-liberal period (say, the last 3 decades), how the financial crisis occurred, why it is persisting, who underpins the well-funded campaign against budget deficits as a means of reducing unemployment and redistributing national income towards the bottom of the distribution, and how we might go about reforming/restructuring a global financial order that clearly does not work in the interests of all (make that almost everybody!). One such research agenda is emerging from the field of network analysis and some of the results to date provide a chilling picture of who controls the world financial markets and the governments and central banks that seek to regulate these markets. Essentially, if we want to engage in serious reform we have to unseat the power of some 161 individuals.

Today, I was (perhaps) going to discuss the Federal coalition’s so-called budget costings, which they have released this afternoon a day and a half before the federal election is held. The major policy proposals are not costed and the whole exercise makes a mockery of their claims to transparency. The Coalition hired three so-called experts to validate the “costings” (after the debacle in the last election when their were major mistakes in the arithmetic revealed) and those characters should be ashamed of themselves for giving their imprimatur to such a shoddy process. Even from the pittance of information they have released it is clear they do not understand the macroeconomic reality and will damage overall growth. So that is all I intend to say about that matter. But in the last few days I have done a few media interviews (radio) on an article that appeared in the local Fairfax press, but was originally published in the Strike! Magazine as – On the Phenomenon of Bullshit Jobs by LSE anthropologist, David Graeber. The title in the local article had changed to “nonsense jobs” – a sign of the conservatism of our press. The interviews I did were interesting because the article brings together a number of strands that further expose the weakness of the economic theory taught to students in most universities. That is much more interesting to write about here than the tawdry realities of Australian politics at present which can be described as indecent ignorance.

Writer of popular textbooks on macroeconomic myths, N. Gregory Mankiw has just put out a paper – Defending the One Percent – which is due for publication in the Journal of Economic Perspectives. The paper presents a narrative about the shift in the US personal income distribution (sharply towards higher inequality) since the 1970s in terms of rewards forthcoming to exceptionally skilled entrepreneurs who have exploited technological developments to provide commensurate added value (welfare) to all of us. As a result, rewards reflect contributions and so why is that a problem? In other words, the “left” (as he calls the critics of the rising inequality) are wrong and are in denial of reality. That view is unsustainable when the evidence is combined with a broad understanding of the research literature. Ability explains the tiniest proportion of the movements in income distribution. Social power and class, ignored by the mainstream economics approach, provides a more reliable starting point to understanding the rising inequality.

I was sent a copy of a survey report – Grand Old Party for A Brand New Generation – which was produced by the so-called College Republican National Committee, which is a conservative university-based organisation in the US aiming to recruit people into the GOP. What emerges is that a lot of opinions are expressed but once you consider them in detail the only possible conclusion is that American college students (inasmuch as this is a representative sample) are hopelessly mis-educated on these matters – like the rest of the population. The level of internal inconsistency with respect to positions taken on macroeconomic policies that is demonstrated in the survey results is quite stunning. But don’t blame the students, their teachers and political leaders let them down too. The economic debate around the world is so infested with neo-liberal myths that it is hard for any alternative viewpoints to get oxygen. Yet the data keeps rejecting the mainstream views, which, it seems, only serves to solidify them further. We are all caught in a morass of mis-education – and our societies are drowning as a consequence. Nero fiddled. We do something else. Civilisations do not last forever.

Today is Part 2 of my little mini-series on “Learning standards in economics”. It might appear to be a break in continuity from yesterday’s blog but when I get around to Part 3, I think you will see the way in which today’s discussion fits well. Last month (January 24, 2013), the Peter Peterson Foundation – which is just a propaganda front for people with too much money and influence designed to advance spurious ideas about the economy – released a statement – College Students Launch Campaigns Across the Country to Activate a New Generation on the Nation’s Fiscal Challenges. When I delved into what it was about the story became very mirky indeed. Teams of students are being assembled under the banner of what we might call the “we are self-important and want to show it” banner and being coaxed into action The essential part of education – the search for knowledge – is the missing part. The myth that the US government is going broke is the starting point not the enquiry.

Regular readers will know that I place the shifts in the distribution of national income (at the sectoral level) as one of the keys to understanding the current economic crisis and the what needs to be done to get out of it. I covered this early on in this blog – The origins of the economic crisis. The mainstream press is now finally latching on to this issue, which is good but sadly the media is still allowing itself to be captured by mainstream economists who have a particular and wrong view of what has been happening, why it has occurred and what the implications of it are for public policy. The fundamental changes that are needed to policy frameworks and societal narratives before the crisis is full resolved are still so far off the radar though. Until we start promoting discussions such as that which follows there will be only limited progress to a sustainable solution.