Dean Baker. “If economics were like astronomy, the experts in the field would all be calling for the government to spend what is needed to boost growth. But economics is not like astronomy. When [the Reinhart and Rogoff study a] key piece of evidence arguing for austerity was discredited, many experts just doubled down.”

See on truth-out.org

There is a close relationship between the political economic ideas viewed as legitimate in capitalist society and ideas viewed as meritorious in the discipline of economics. This is not unique to the current time period, but has been a long-standing feature of the relationship between the political culture of capitalism and dominant economic theories. The inability of mainstream economists to offer appropriate solutions to the Great Recession was not the result of timidity, but rather the result of a decades-long movement within the discipline to bury Keynes with differing versions of the notion that competitive market systems are efficient and, most importantly, reflect the reality of existing capitalism. Monetarism, Rational Expectations morphed into New Classicism, Real Business Cycle arguments, and DSGE modeling, have all contributed to the blinding of the discipline to the instability of capitalism and the fragility of the financial sector. What’s more, its underscored the tendency to view the market system as forever hovering about full employment equilibrium, quickly moving back to that equilibrium if displaced by “random” exogenous shocks. Government, in this view of things, is more often than not the source of such shocks and, as such, should be kept from “interfering” in the system.

In short, free markets work well – indeed efficiently – and should not be tampered with by government. But this argument has been a feature of bourgeois culture since the beginning of capitalism. The business class is forever going on about the efficiency of the market and the inefficiency of government; the bourgeois rallying cry has always been “leave government out of the market”, unless business acumen dictates subsidizing or saving a corporation or two. And within the profession, the notion that free market systems generate outcomes that benefit society as a whole either through economic growth or efficiency or both, has been around since Adam Smith and David Ricardo and is a central theme of the current crop of neoclassically inspired macroeconomists. The suggestion, as made by Keynes – but also Marx, Veblen, Kalecki, and Minsky, that the free market system may not move toward efficient outcomes or may not bring about benefits to society as a whole is taboo.

It’s important to not lose sight of the cultural role played by the discipline of economics in providing arguments intended to celebrate capitalism. Economics plays an important ceremonial role in bourgeois culture, one that almost always trumps its role as science intended to explain things as they really are.

This past December marked the 190th anniversary of the Monroe Doctrine, the 1823 policy declaration by President James Monroe that essentially made Latin America the exclusive reserve of the United States. And if anyone has any doubts about what lay at the heart of that Doctrine, consider that since 1843 the U.S. has intervened in Mexico, Argentina, Chile, Haiti, Nicaragua, Panama, Cuba, Puerto Rico, Honduras, the Dominican Republic, Guatemala, Costa Rica, El Salvador, Uruguay, Granada, Bolivia, and Venezuela. In the case of Nicaragua, nine times, and Honduras, eight.

Sometimes the intrusion was unadorned with diplomatic niceties: the U.S. infantry assaulting Chapultepec Castle outside Mexico City in 1847, Marines hunting down insurgents in Central America, or Gen. “Black Jack” Pershing pursuing Pancho Villa through Chihuahua in 1916.

At other times the intervention was cloaked in shadow—a secret payoff, a nod and a wink to some generals, or strangling an economy because some government had the temerity to propose land reform or a re-distribution of wealth.

For 150 years, the history of this region, that stretches across two hemispheres and ranges from frozen tundra to blazing deserts and steaming rainforests, was in large part determined by what happened in Washington. As the wily old Mexican dictator Porfirio Diaz once put it, the great tragedy of Latin America is that it lay so far from God and so near to the United States.

But Latin America today is not the same as was 20 years ago. Left and progressive governments dominate most of South America. China has replaced the U.S. as the region’s largest trading partner, and Brazil, Argentina, Uruguay, Paraguay, and Venezuela have banded together in a common market, Mercosur, that is the third largest on the planet.  Five other nations are associate members. The Union of South American Nations and the Community of Latin American and Caribbean State have sidelined that old Cold War relic, the Organization of American States. The former includes Cuba, but excludes the U.S. and Canada.

See on www.counterpunch.org

MAINSTREAM macroeconomics has a pretty poor reputation these days, both among the public at large and among economists in other fields. This is hardly surprising….

See on www.economist.com

The notion that all the GOP has to do is introduce some immigration reform, drop race-baiting, and start generating TV ads showing brown-skinned Latinos hanging with good ol’ southern white boys, misses some very important points. To begin with the GOP would need to overcome the distrust it has engendered among Latinos through its use of racist, misogynistic, and xenophobic language and the support it’s given to proto-fascists like Joe Arpaio and nativist, gun-totting, protect-our-borders, vigilante groups. But, more importantly, it overlooks the fact that one of the reasons Latinos do not flock to the Republican Party is because GOP ideology does not resonate with them. And no, I do not mean the demeaning “government as Santa Clause” view hoisted upon Latinos and other “they don’t look American” groups, mentioned by a shell-shocked Bill O’Reilly on election night.  I instead mean a conception of government that’s more in line with the Democratic Party of the New Deal and Great Society era, and a political attitude that echoes the Pink Tide that’s been sweeping through Latin America for at least the last thirteen years. In short, the GOP’s conception of government clashes with conceptions that are rooted in Latino culture and evident in the politics of Latin America.

Latino’s bring with them a Catholic tradition that emphasizes community and collective action, and sees the individual as a social creature whose fortunes can be molded by society and public policy. They are aware of class structures and know that government is often in the hands of the wealthy unless taken over by a populist or working class movement. Poverty is seen as a structural issue and not an indication of personal failing; and throughout Latin America socialist political parties are commonplace, socialist governments have come to power, and politicians can be found campaigning on behalf of the poor or the working classes.

This contrasts with the Protestant tradition of the U.S., which emphasizes the individual, is suspicious of collective action, and imagines that the fortunes of the individual are the result of his/her own effort or lack thereof. They have difficulty with the concept of class, though not race, and see government as reflecting the preferences of individuals, the median voter, and not necessarily social classes or structures of power. Poverty is seen as the outcome of personal inadequacy and not structural conditions, socialist political parties are irrelevant and politicians campaign on behalf of an amorphous middle class – never on behalf of the poor or the working classes.

It’s against this cultural background that the odds of having significant fractions of the Latino electorate switching to the GOP needs to be understood. Of course, cultures are not monolithic and versions of Latino beliefs can be found in Anglo culture and vice versa. Nevertheless, these cultural distinctions help explain why Latinos would be more inclined toward a Democratic vision of government than a Republican one. The idea that government should be used to improve the condition of society as a whole resonates more easily with Latinos, progressive Americans and the Democratic Party, than it does with conservative Americans and the Republican Party. The flip side of this is that anti-statism and Social Darwinism plays more easily in the U.S., and in particular the more rabid versions of Anglo-American culture such as the current GOP, than it does among Latinos and progressive Americans. So, unless the GOP is prepared to give up on its vision of government and become a version of the Democratic Party, let alone the New Deal version of that party, there’s little chance that its message will resonate among Latinos.

But, it’s not just that the electoral chances of the two major parties will be affected by the growing Latino population, it’s that the dominant political ideology and its mode of expression will be challenged and changed. The growing presence within the U.S. of a culture that views government as the vehicle for progressive social change, one that has an obligation to improve the condition of the great masses of people, is bound to affect the individualistic, anti-statist, ethos that has been a feature of American politics since the early days of the Republic. One would expect the political center to tilt a bit more to the left, closer to the norms of the New Deal. What’s more, this growing demographic shift will also impact the nature of political action, the style of politics.

One instance of this last point can be found in the mainstream’s reaction to the role played by Latinos in defeating Romney. The media interpreted the vote as the first “wake-up” call of the growing power of Latinos in the U.S. But if it had been attentive, the mainstream would have realized that the first “wake-up” call occurred in 2006, with the huge immigration reform protests of that year. While the mainstream did report on the hundreds of thousands of Latinos that took to the streets, it nevertheless interpreted those demonstrations as a form of street theater, largely because it involved a form of politics viewed as déclassé or uncommon in the United States. This blind spot is symptomatic of a culture that interprets electoral politics as more serious than the politics of mass movements. As a result, the mainstream was bound to overlook the 2006 immigration reform protests and not wake up to its significance until it showed up as an electoral choice six years later. But, from a Latino perspective, the 2012 Latino vote was nothing more than a continuation of the politics of protest of 2006 and the pro-Obama vote of 2008. To the extent that this will continue, and it’s reasonable to think it will, American politics will begin to reflect a bit more the politics of collective action and mass movements common to Latin America.

Latinos do not bring with them the same antipathy toward unions that’s common among white American workers, particularly those steeped in the traditions of individualism. The union movement in the U.S. will experience an uptick in membership and, more importantly, a change in strategy as a result of the growing number of Latinos. The business model that has done so much to destroy the credibility of unions in the U.S. will come increasingly under attack as Latino union members and leaders begin to adopt the social justice model of unionism more common to Latino culture. Some of this is already evident in the growing activism of labor unions in the last couple of years (witness the large number of Latinos that have participated in strikes and rallies). Of course, this has being aided by the economic pain inflicted on the working classes by the Great Recession, the emergence of the Occupy movement, and the ruthless efforts on the part of the GOP to eviscerate what’s left of labor unions (starting with Scott Walker’s attacks in Wisconsin and continuing to the current “right to work” push by Michigan GOPers). The confluence of this set of circumstances may very well lead to a re-awakening of a more progressive and militant labor movement. The sheer number of poor working Latinos willing to join unions is enough imagine a more emboldened and progressive working class movement that would challenge not only traditional Republican politics, but Democratic politics as well.

It’s important to not lose sight of the fact that the overwhelming majority of Latinos are working class; and low paid working class at that. What’s more, Latinos weren’t the only ones who voted against the Republican Party; so too did African Americans, Asian Americans, women, and the young. The common thread binding these various constituencies isn’t their ethnicity but their economic class. As Thomas Ferguson has shown, last November’s presidential vote followed closely the distribution of income; with the percentage of the vote going to Obama declining with income, and the percentage going to Romney increasing with income. Latinos voted their class interest and were not distracted by wedge issues (i.e. race baiting GOP ads intent on keeping white workers voting against their economic interests) because … well, they are the wedge, and are not drawn to the individualistic “lift yourself up by your own bootstraps” ideology of white billionaires. The irony is that the Latino vote had a lot more to do with economics than the GOP realizes; but not in the sense that it was a referendum on a stagnant economy, which the GOP assumed would encourage the electorate to vote against Obama, but in the sense that it was a referendum on the trickle down, Neoliberal, Social Darwinistic policies of the GOP.

On this note, it’s important to not lose sight of the fact that the overwhelming majority of Latinos migrated to the U.S. as a result of the wars and Neoliberal policies it has imposed on Latin America. One example of this involves the migration of impoverished Mexicans to the U.S. as a result of NAFTA. But in addition, millions of Nicaraguans, Salvadorans, Hondurans and Guatemalans have migrated to El Norte as a result of the U.S. sponsored wars of the 1980s and the Neoliberal policies it pushed during the 1990s and 2000s. The combined effect of the wars and Neoliberalism has been a huge migration of Central Americans during the last three decades. And if that were not enough, in the late 2000s, those who remained in Central America pushed back against Neoliberalism by voting for leftist presidents (Daniel Ortega in Nicaragua, Manuel Zelaya in Honduras, Carlos Mauricio Funes Cartagena in El Salvador, and Alvaro Colom Caballeros in Guatemala).

Latinos have experienced first-hand the impact of Neoliberalism; a philosophy which extols unregulated markets, financial liberalization, free labor (i.e. non-unionized), evisceration of social programs and the privatization of public services (education, health care, social security, prisons, etc). Given their experience with Neoliberal policies, it’s not hard to imagine that Latinos would vote against a political party that extols its virtues. What’s more they are not distracted by the rhetoric of freedom and individualism that’s used to promote such policies; they see it for what it’s worth – promoting the interests of capital through the exploitation of labor and the destruction of community.

There are, of course, Latinos who will gravitate to the Republican Party. Class, once again, has a role to play in this. Wealthy Latinos and capitalists are more inclined to gravitate toward the perennial GOP message of reducing the “burdens” of government. In addition, there are the reactionary elements in the Latino population, such as the Cuban Gusanos and Nicaraguan Somocistas, who will gravitate to GOP proposals to restore the property, power, and privilege they once had under U.S. subsidized Latin American dictatorships. But these elements are a minority within the Latino population. What’s more their alliance with the GOP has a lot less to do with its anti-statist Social Darwinistic message, than with its pro-business, private property, focus.

Given the above, it’s highly unlikely that the GOP will be able to capture a significant fraction of the Latino vote within the next couple of decades. But, more significantly, there’s a strong possibility that the political center will gradually shift to the left as a result of the growing militancy and electoral power of working class Latinos. The GOP is already shut out of the African-American vote, it is also shut out of the Latino vote; and unless it’s willing to become a version of the current Democratic Party, which, of course, it won’t, no amount of tinkering with it’s fundamental anti-worker, Social Darwinistic, message (not to mention racist, misogynistic and xenophobic), will convince significant numbers of Latinos to vote for the Republican Party.

When I became chair in the Spring of 2010 (the second time around) I thought I’d change the format of our departmental newsletter. It’s been a feature of our department since the late 1970s, but it’s focus has traditionally been on such practical issues as course offerings, scholarship opportunities, upcoming events, etc.  I decided to start turning it into a quarterly discussion of political economic issues and events. We still have the nuts-and-bolts stuff, but we also now have more meaty pieces of relevance to students of political economy.