January 1, 2021

In Blog Letters To Finkelstein News

The Madness of Economic Reason

by Obi Cogito

[Obi is a tech-worker in New York City and a DSA member]

The word “logic” has suffered a lot of abuse lately in politics.


The Wall Street Journal editorial board griped about “how far Congress has strayed from basic economic logic” with the insertion of the business meal deduction in the COVID Relief bill. How conscientious of them, though they had no qualms with the $120 billion gift to the superwealthy also inserted into the bill.


On Nov 23, Congresswoman Ilhan Omar tweeted, “A single F-35 [fighter jet] costs over $100 million. For that kind of money, we could feed 40 million kids.” This sounds like “economic logic” to me, especially when millions of Americans are going hungry. She added, “We should be focused on the deadly pandemic, not arming dictators.” Ben Shapiro—the master logician—responded to her by saying, “So your logic is that if we stop selling F-35s to the UAE, money magically appears so we can feed poor kids? That is not how selling works.”


Shapiro’s point is, the money is returned from the UAE in the form of a purchase, so it’s not “wasted.” But what about money squandered on the military budget? That money would “magically appear.” Indeed, it could be the hundreds of millions of dollars used to produce F-35s, which, according to the New York Times, has some Biden advisers wary of selling them to Gulf Arab nations “because of the Saudi-led war in Yemen, which has created the world’s greatest humanitarian disaster.” Shapiro doesn’t want us to feed poor children in the US, but does want us to contribute to the unprecedented level of hunger in Yemen. Alas, the rationalization of suffering at home in order to subsidize suffering abroad is not just a right-wing custom.

Forbes magazine has reported that Larry Summers, a former economic adviser to Barack Obama, has come out against $2,000 direct payments, because, as he says, it would create a “temporary overheat” of the economy. The article also noted that he isn’t “enthusiastic” about the inadequate and already agreed-upon $600 checks either—for the same stupid reason. Mr. Summers tweeted, “Except by invoking the idea that politicians like handing out universal gifts, I cannot see the logic of giving 10s of millions of families where the adults are fully employed, and the big problem is that they can’t because of Covid go out and spend checks for $2000.” The problem with Summers argument, I think, is, you don’t need to “go out” in order to pay your rent and utility bills and, anyhow, don’t many people nowadays shop on the web? Now, when Mr. Summers mentions the word “logic,” he knows what he is talking about: During his days at the World Bank, he wrote in a memo:


Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)? I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. …I’ve always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City.


Mr. Summers cannot see the “logic” in giving struggling people, not all of whom are fully employed, $2,000 in direct payments, but he did see the “impeccable” logic in using Africa as a dumping ground. This must have been the same sound reasoning he gave Obama during the last economic crisis, the results of which prompted left-leaning outlets like the Atlantic to come out against Mr. Summers when he was under consideration for the chair of the Federal Reserve in 2013. Obama had to defend his favorite logician against the Huffington Post and other outlets that “were unfairly making him a ‘progressive whipping boy.’” But after all, according to the Associated Press, “Obama says he felt confident in difficult decisions he had to make because he surrounded himself with smart people who didn’t always agree with him, and based choices on ‘facts and reason and logic.'” In other words, Obama didn’t have a clue what he was doing, so he handed over power to the smartest representatives of the class he served, hoping his smiles and speeches would hoodwink the people who elected him.  It was that kind of “economic logic” that got Trump elected.