(What’s Left of) Our Economy: When Hollywood Got It on the Global Economy

“I’m as mad as hell and I’m not going to take this anymore!”

It sounds like something we’ve heard a lot of in this presidential campaign, doesn’t it? But movie buffs and many past or in their middle years will recognize it as the signature line of the Oscar-winning 1976 movie Network.

One of the cable channels or PBS had the smarts to broadcast it recently; if you missed it, I hope you get the chance to see it soon. But what I found most striking about the film when I saw it last week for the first time since its original theater run was not the recognition of widespread popular anger during what was clearly a period in the nation’s recent history as dreary as the present day. It wasn’t the devastating portrayal of the news business – and especially the TV news business – as a cynical and shallow exercise in sensationalism. And it wasn’t even the crackling screenplay by Paddy Chayevsky, which I’m confident will go down as a lasting monument to the power of the written word.

All these aspects of the film are spectacularly memorable – with the first two of course resonating with special force during this political year and particularly in the last few days as the controversy has escalated over the violent scenes at Republican front-runner Donald Trump’s campaign rallies. But maybe because of my own focus on economics, what struck me most about Network was how it foresaw with stunning accuracy the main arguments that have now been made (and swallowed by the Mainstream Media) for decades on behalf of job- and wage-killing trade and other international economic policies.

The magic moment is precipitated by an on-the-air tirade by Howard Beale that finally promises to backfire on the corporate bosses. These executives at the “Communications Corporation of America,” had been cheerfully, cynically – and profitably – exploiting Beale’s transformation from respected veteran newsman to a “Mad Prophet of the Airwaves” whose fiery “sermons” had been exhorting his despondent countrymen to wake up and take back control again over their increasingly immiserated lives.

But one night, Beale goes too far – revealing that CCA was just about to engage in maneuvering to sell the network covertly to the Saudis. His panegyric will strike a loud chord with anyone concerned about mounting control of U.S. assets by foreign interests – especially those from countries that haven’t been especially friendly. But CCA of course desperately needed to figure out what to do about a cash cow turned mortal threat.

Enter Arthur Jensen, Chairman of the Board and CEO of CCA. Confident that “I can sell anything,” he summons Beale to his palatial offices, leads him into the “overwhelming cathedral of a conference room” (dubbed “Valhalla”), shutters the windows, dims the lights, drops his normally implacable demeanor, and “roars” to his wayward employee:

“You have meddled with the primal forces of nature, Mr. Beale, and I won’t have it, is that clear?! You think you have merely stopped a business deal — that is not the case! The Arabs have taken billions of dollars out of this country, and now they must put it back. It is ebb and flow, tidal gravity, it is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations! There are no peoples! There are no Russians. There are no Arabs! There are no third worlds! There is no West! There is only one holistic system of systems, one vast and [immense], interwoven, interacting, multi-variate, multi-national dominion of dollars! Petro-dollars, electro-dollars, multi-dollars!, Reichmarks, rubles, rin, pounds and shekels! It is the international system of currency that determines the totality of life on this planet! That is the natural order of things today! That is the atomic, subatomic and galactic structure of things today! And you have meddled with the primal forces of nature, and you will atone!”

Jensen rails on a bit longer in this vein – his remarks are totally worth reading in full, as is the whole script. But what’s crucial about his jeremiad is its vivid insistence that the global economy and the current structure of globalization literally are forces or features of nature that can and should be as impervious to criticism as the primordial movements of neutrons, planets, and galaxies alike. And the intent back then was as clear as it is today – to neuter intellectually anyone who counters that the global economy is a man-made construct as potentially imperfect as any other human arrangement or construct, and thus as legitimately re-thinkable and re-structure-able.

As known by regular readers of RealityChek, what might be called Newtonian portrayals of the world economy and of America’s longstanding bipartisan, offshoring lobby-shaped approaches to it have faced increasingly strong and effective attacks even from the ranks of academic economists – who have done so much to foster it when they write for popular (as opposed to professional) audiences. Network usefully reminds us how deep the roots of this fakeonomics run – and how powerful and necessary it is to respond by getting “mad as hell.”

Alan Tonelson On CNBC

Alan Tonelson, founder of RealityChek and a Director of the Henry George School of Social Science, speaks out in the Free Trade debate,  on CNBC, March 10, 2016.


Watch the book signing for Capitalism: Competition Conflict and Crises, February 12, 2016.

Join us in the Book Signing for Capitalism: Competition, Conflict and Crises, Anwar Shaikh’s ground-breaking new work.

(What’s Left of) Our Economy: Is This It?

I’m sure that all of you out in RealityChek Reader-Land are familiar with the idea of lowering expectations, or “lowering the bar.” The standard justification for this practice is fostering greater realism about what’s possible in politics, business, sports and many other fields, and sometimes it’s essential. But of course it’s easily turned into an unjustified excuse for subpar performance, and lately I’ve noticed that a specific version has become inordinately popular. It’s the burst of claims that, whatever problems the U.S. or world economies have encountered lately, they’re not on the brink of a 2008-style meltdown. A less dramatic variant: Neither America nor the world is heading into a recession.

Which interpretation is most convincing? And to which audiences? The answer will shape the future not only of American prosperity, but of American politics.

If you doubt the popularity of the “not 2008” argument, just Google the phrase. You’ll come up with examples like:

>“For anyone who lived through the [2008] financial crisis, the depth of the declines, and the way they are rolling across multiple markets, is cause for alarm. Early on in that meltdown, too many people thought troubles would be akin to the 1998 Russian debt crisis or the 2001 dot-com bust. Those views proved disastrously wrong.

“There is less a chance of things playing out the same way today….For now, the [stock market] storm doesn’t appear to have the force of a cataclysm.” (The Wall Street Journal, January 17, 2016)

>”You can’t just look at low commodity prices and assume that means that we are headed for something like 2008 or a big downturn in the global cycle.” (Scott Mather of investment firm PIMCO, January 14, 2016)

>”[F]ormer bulls see more pain ahead for the markets, [but] they have yet to discover evidence that suggests the world is heading for the kind of disaster experienced in 2008 or the Great Depression.” (Barron’s, January 30, 2016)

>”Without arguing that all is well, it is nonetheless clear that little in the present environment resembles 2008.” (Milton Ezrati of investment firm Lord, Abbett & Co., January 11, 2016)

>[Bank of England Governor] Mark Carney last night painted a bleak picture of the global economy – but said: ‘This is not 2008.”

>”At a time when The Big Short is an Academy Awards front-runner, perhaps many are beginning to wonder if another financial crisis is emerging from the shadows of Wall Street. And there’s a simple answer here: No. “ (Forbes, January 20, 2016)

>”Recession talk has increased, but real economic data in most countries don’t look especially bad….This is not a situation like 2008, when markets doubted banks’ solvency, banks struggled to fund themselves, and credit markets collapsed.” (The Economist, February 11, 2016)

>”[W]ith many in the markets always on the look out for ‘the next 2008’, it’s worth noting that this probably isn’t it…. (BBC, August 24, 2015)

>”Mixed signals from our indicators leave us more cautious regarding the U.S. economy and global financial markets over the near-term. However, in our view, the current situation in 2016 does not look like it will be a repeat of 2008.” (ETF Trends, February 22, 2016)

As should be clear, many of the “not 2008” crowd aren’t complacent about the odds of continued (however slow) economic improvement in the United States or the world at large. But many are, as should be clear from this Financial Timesarticle – which describes the views of specialists at the Peterson Institute of International Economics, an always reliable barometer of economic conventional wisdom inside the Washington, D.C. Beltway.

Don’t misunderstand me. It’s great that the odds against Financial Crisis 2.0 and the ensuring Great Recession unfolding anytime soon (at least) seem pretty high. But the notion that current levels of growth and living-wage employment are remotely satisfactory – especially considering how much debt has been created, largely by the Federal Reserve – is positively pernicious. In fact, it sounds like nothing so much as the “secular stagnation” theory being pushed by former Clinton-era Treasury Secretary and chief Obama economic adviser Larry Summers.

As I’ve explained, this idea holds that “the U.S. economy has become so lifeless that only inflating dangerous borrowing and spending bubbles can spur even adequate (much less robust) production and hiring.” In fact, his analysis has led Summers to suggest that “the best real interest rate for the United States (and for other high-income countries he believes are stuck in the same predicament) is negative – a situation in which lenders essentially pay borrowers to borrow after adjusting for inflation. That is, even at the current level of zero for the critical federal funds rate set by the Federal Reserve,  money is too expensive to fuel satisfactory growth in early 21st century America.”

The growing popularity around the world of these negative rates, the U.S. Federal Reserve’s own clear receptivity to this approach, and this back patting from the economic policy establishment for avoiding the abyss, are send a clear signal: Barring major political change, Americans and populations of other high-income countries can expect more of the same from their governments – perhaps combined with some more infrastructure spending.

Yet masses of voters are no longer buying this strategy. That’s being signaled loudly by the growing popularity in the United States and Europe of populist leaders touting better trade and/or immigration policies as jump-starters of faster growth.

Policy overhaul on both these fronts can also produce higher-quality growth – i.e., less reliant on endless debt creation. That’s why everyone wanting a genuinely healthier American economy should be rooting, and voting, for the populists. But it’s also why they should also be rooting for those populists to start raising their game.

The Global Financial Crisis and Its Remedy

Capitalism – Fall Semester Syllabus

What’s Holding Back the World Economy?


The world economy continues to stumble.  Developed nations still see-saw in progress.  The rich get richer and the poor still suffer.  Joseph Stiglitz and Hamid Rashid explore why the global economy is still not succeeding. (You can also read Progress and Poverty, where Henry George questioned exactly the same anomaly, almost 150 years ago).

Henry George, still current!

Nothing Like This Has Ever Happened Before

It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.” — Henry George, Progress and Poverty, 1879

Smart Talk Continues in 2016 on TV in Manhattan!


Smart Talk continues on MNN, Channel 1,  Fridays at 6 p.m.

The new schedule includes:

  • Anwar Shaikh                 3/4/16
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  • Yanis Varoufakis            3/25/26
  • Edward Nell                    4/1/16
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