The tragedy of American wealth

All the things I could do

If I had a little money

It’s a rich man’s world

– ABBA

“Pay them off,” he said. Over two decades ago, that was the plan for globalization’s losers coughed up by a junior priest of the Washington Consensus then teaching at one of America’s august indoctrination asylums.

What he meant was that the gains from globalization would be immense – more than enough to compensate Ohio factory workers whose jobs would be outsourced to China.

This junior priest founded a consulting company, rode the globalization wave to its peak, reversed course with perfect timing and now advises American companies and state organs as a China hawk, ascending to high priest status in the New Washington Consensus.

“Pay them off.” We all bought it then. So simple, so elegant, so logical, so easy. Democracy and capitalism would surely figure out a mechanism. It wasn’t our problem. Our problem was getting past round one of the Goldman Sachs interview.

Of course, we now know that there was not going to be a pay-them-off mechanism. The winners of globalization – those who passed rounds two and three – were going to fight tooth and nail for every last cent the Washington Consensus threw our way.

If we really sat down and thought about it, it should have been patently ridiculous from the get-go. Pay them off? Like with welfare checks and food stamps? Or teach them computers? Unfortunately, nobody actually sat down and thought these things through.

In the end, globalization’s losers in America were kept afloat – just barely – by debt and lower inflation for consumer products while the shock troops of the Washington Consensus hoarded vast sums of newly created lucre. And I mean vast.

So here we are. There is a New Washington