Fuck "competiveness" and the liberals it rode in on
Rortybomb sketches the background on twenty years of FAIL:
Krugman and others are trying to figure out how demand-arguments are being lost in the opinion-making class. I’d argue this is a twofold thing. Conservatives went all-in attacking the notion of demand side politics in the early 1980s, and liberals abandoned it in the 1990s for a different set of language on a pro-government supply side, leaving the demand work up to the Federal Reserve.
Jamie has written a lot during this crisis, but the piece I learned the most from for that debate was actually written in 1996 for The American Prospect, The Surrender of Economic Policy. Here he explained, back when the debate was still being fought during the Clinton years, on how liberals abandoned demand-side arguments in order to try and win over a role for the government in the supply-side arguments:
…LIBERALS LOST ON THE SUPPLY SIDE
At the very least, New Keynesian acceptance of the New Classical theoretical structure reduces macroeconomic policy to the fringe role, that of large-scale intervention only in deep and lasting recessions. ....
We are left with the unpleasant conclusion that the liberal mainstream has fallen into a self-deluding trap. The right has taken over the commanding heights of both fiscal and monetary policy, leaving liberals with token sums to spend on supply-side interventions. Education, training, and infrastructure are very important, but not for the reasons usually given. Business won’t support funding them at levels that liberals desire, and it is wishful to argue to business that they should. We must find, instead, a language in which to defend them for the sake of the people themselves, and organize the people around them for the vital direct benefits they bring (as indeed the environmental, consumer protection, and health and safety movements have traditionally done). Otherwise they will continue to lose the budget battles.
And if we want full employment, we need something else–a full employment macroeconomic
The liberals who built their careers post 1980 understand the tradeoff that was made when liberals took on the government-can-provide-productivity-too arguments, assuming that the Federal Reserve and break-glass-in-case-of-emergency Federal fiscal policy would be there to step in and manage demand when a crisis happened. Which might help explains why they are so pissed at what is happening to the country right now.
Liberals may be "pissed," but the consequences for the rest of us are a lot worse.