These days the economic news reads like some strange collaboration between John Steinbeck and Eugene Ionesco, a mashup of The Grapes of Wrath and The Bald Soprano. Grim statistics of poverty, lost hope, and widespread tragedy -- the stuff of human reality -- are juxtaposed with a surrealistically disconnected political debate that focuses on the incidental and the irrelevant.
We're facing record levels of un- and underemployment, stagnant wages, lost social mobility, and lost economic mobility. But in Washington those issues take a back seat to discussions about deficit reduction, spending cuts (accompanied at best by very modest tax increases on the under-taxed wealthy), and the ultimate non sequitur, corporate and high-income "tax simplification" that would freeze these rates at their current low levels. Faces with the anguish of millions, our leaders are debating the Bald Soprano's hairstyle.
Robert Kuttner's latest book, Debtors' Prison: The Politics of Austerity Versus Possibility, outlines the national debate we should be having. Kuttner traces the history of today's "austerity economics" obsession among the political elite, rebutting that ideology's arguments with a broad range of historical analogies and successful economic strategies. Debtors' Prison draws on economics, literature, political science, history and anthropology to make its case, and it makes that case eloquently and forcefully.
Kuttner rightfully places the onus for today's misguided economic debate on private financiers of austerity economics, including billionaire Peter G. Peterson, and on politicians whose own sense of expediency has trumped the kind of higher calling followed by leaders like Franklin D. Roosevelt. Drawing on the work of some impressive thinkers, including anthropologist David Graeber, Kuttner traces the history of public and private indebtedness up to the present day.
Debtors' Prison discusses the European economic crisis at length, providing a better and more readable overview of that situation that I've seen elsewhere, before turning to a topic Kuttner calls "the moral economy of debt." The story of debtors' prisons is told in part through the experiences of Charles Dickens' father and Robinson Crusoe author Daniel DeFoe. These anecdotes help to illustrate society's shifting moral view of personal and corporate indebtedness.
The moral views of today's political and economic elites have guided our country's misguided response to an ongoing economic crisis. They have placed the scarlet letter of "moral hazard" on wronged borrowers and other consumers, while giving Wall Street executives and other errant business leaders the green light to carry on as they did in the years before the near-meltdown of 2008. Worse, as Kuttner shows, we have continued to subsidize much of that errant behavior with public resources.
That's not an accident. As Kuttner rightly notes, democracy is endangered when money exerts undue influence over the political process. That has led to a highly distorted view of which people and institutions 'deserve' to be bailed out in a time of crisis, and those distortions are threatening to tear the fabric of our society.
Kuttner covers these complex, interconnected subjects in a way that is informative, engaging, and enlightening. Debtors' Prison is an ambitious work, covering a great deal of ground in a relatively short space (less than 300 pages). Those who are looking for solutions to our current economic woes won't find much of what they're seeking here. While there is a short discussion of fixes at the end, the book is more diagnostic than prescriptive in its approach. But Kuttner has provided exactly the kind of overview that decision-makers can and should read, and which they will find both informative and enlightening.
Debtors' Prison should be required reading for anyone who influences economic policy in this country. Open-minded readers should come away convinced that we need to reject the economics of despair for an economics of hope.
It's sometimes argued that books of this kind are "preaching to the choir," although we believe its value is greater than that. But, in any case, even a choir needs to understand and be inspired by the songs it sings. Robert Kuttner has provided some highly useful intellectual weaponry for the ranks of battle-scarred warriors who combat austerity economics on a daily basis. For that alone, he deserves thanks for this highly readable and erudite book.