The Exquisite Sadness of the Businessman

As well as illustrating why I don’t particularly like the term “neoliberal,” which tends to just serve as a vague term of abuse, I think Mike Konczal’s post on narcissistic business elites is absolutely brilliant:

It seems that there is an increasing sense among certain types of neoliberal business elite that Obama hasn’t been favorable enough to the business community, and that he needs to reconcile this fast in order to fix the economy. Look at Peter Baker’s article on Obama’s job’s programs, which doesn’t mention housing but does stop by the Chamber of Commerce to note: “But Obama’s periodic forays into populism made it personal. He couldn’t seem to decide whether he was going to take Wall Street to task for its irresponsible behavior or cajole it into freeing up money to get the economy moving. One day he derided “fat-cat bankers” who caused the recession; another day, he soothed them by saying that he and the American people “don’t begrudge” multimillion-dollar bonuses.”

Think about that. Why is Obama once calling members of the financial sector “fat-cat bankers” – while they were rolling the taxpayer, paying huge bonuses out of TARP and the Federal Reserve – important for an article about jobs? Is the idea that business leaders feel sad and offended important for why demand is down and unemployment is high? The government can act, through monetary and fiscal policy, to get jobs going again, but that leaves business elite not in charge of the economy.

I wrote about this for a recent TAP online column, and I agree with Konczal entirely. The notion that economic growth depends crucially on the subjective feelings of the business executive class is one of the most pernicious ideas to take hold over the past 12 months. One should distinguish this hypothesis from the accurate point that rational expectations matter in the economy. Expectations do matter. But this is often confused with the idea that if the waiters at Davos are rude this year the economy will go into a recession, but if Obama gives a CEO a really sensual back rub growth will return.

The fact of the matter is that businessmen like conservative politicians. If you ask them “how do you feel about the incumbent politicians these days” they say “I feel great” if and only if the incumbent politicians are conservatives. Economic growth was better in the 1990s than in the 2000s, but businessmen liked George W Bush better than Bill Clinton. Growth was better under FDR than under Eisenhower, but businessmen liked Ike. And that’s fine, businessmen are free to like or dislike whomever they want. But their subjective view of politicians doesn’t cause or hamper economic growth.

That’s all just repeating what Konczal said. But to add another thought, I really do think progressives need to try harder to claim the mantle of growth for ourselves. Conservatives like to talk about the importance of economic growth, but they’re not only bad at delivering it in practice, they’re remarkably hostile to the idea of boosting growth. They favor certain labor- or ecology-crushing measures that are said to increase the economy’s growth potential, but they’re unremittingly opposed to the idea that the government should, in fact, try to run the economy at its potential level of output. The esoteric idea, I think, is that actual prosperity would make people sort of soft and flabby while recession makes austerity “necessary” as a matter of budgetary math.