Hillary's predicament and the history of capitalism: Former Monty Python member explains it all

Terry Jones' "Boom Bust Boom" explains why mainstream economics is BS -- and why Clinton's in trouble

By Andrew O'Hehir

Published March 9, 2016 12:00AM (EST)

Hillary Clinton   (AP/Reuters/Brian Snyder/Photo montage by Salon)
Hillary Clinton (AP/Reuters/Brian Snyder/Photo montage by Salon)

Here’s the only problem with “Boom Bust Boom,” a whimsical edutainment documentary from former Monty Python member Terry Jones that seeks to upend the conventional wisdom about capitalism and mainstream economics: It couldn’t see the future. Jones and his co-writer, Dutch economist and entrepreneur Theo Kocken, obviously conceived this project some years ago, because movies take time. They couldn’t possibly have seen the improbable rise of Bernie Sanders coming, let alone the transatlantic shock delivered by Britain’s Bernie cognate, Jeremy Corbyn, the left-wing insurgent who went from total obscurity to leader of the Labour Party within five months.

So while “Boom Bust Boom” is unquestionably entertaining, and useful in terms of framing a brief history of economic cycles for high school students, college undergraduates and interested civilians, it finds itself a little behind reality — not to mention behind “The Big Short,” perhaps the year’s unlikeliest Hollywood hit. It’s a curious development, and an index of how fast public perception and imagination have shifted. To most regular people in most parts of the world, the thesis that unfettered capitalism is unstable, empowers predatory behavior and worsens inequality is not merely uncontroversial but empirically obvious. We appear to be entering an era of political history when socialist or social-democratic reforms are once again in play.

Perhaps for understandable reasons, “Boom Bust Boom” is a movie about the discipline of economics that is extremely light on theory and ideology. John Kenneth Galbraith shows up, in Muppet-style puppet form, to explain that the periodic outbreaks of financial madness that sank the Western economy in 1929, and did so again eight decades later, appear to be baked into human economic behavior. Also offering puppet wisdom is Hyman Minsky, the now-legendary Washington University economist who was largely ignored during his lifetime but whose “Financial Instability Hypothesis” — the idea that extended periods of economic prosperity and stability inevitably produce irrational bubbles and crashes — was borne out in spectacular fashion in 2008, a dozen years after his death. A number of prominent liberal economists and social scientists appear in the film to praise the Galbraith-Minsky line, including a trio of Nobel Prize winners: Paul Krugman, Robert Shiller and social psychologist Daniel Kahneman.

But I honestly can’t tell you why John Maynard Keynes, the father of interventionist macroeconomics and the intellectual avatar of the entire tradition embodied in “Boom Bust Boom,” is never mentioned by name. Have the right-wing attacks on Keynesianism since the Reagan-Thatcher years really rendered him untouchable? I do understand, more or less, why Karl Marx is not mentioned — although it’s time to get over that, for God’s sake. (Thomas Piketty, who isn’t here — no doubt he’s making his own film — got an international bestseller out of a high-caffeine blend of Marx and Keynes, tailored to the world of global consumer capitalism.)

Similarly, Jones and Kocken offer us only the barest summation of the opposing views represented by neoclassical economics or its supply-side libertarian variations. This movie is designed, I suppose, to reach young people who have already been partway indoctrinated with free-market ideology, but even so that feels like a mistake. In framing the argument about why neoclassical economics is so wrong and so damaging, I think we also need to understand why it’s so seductive. As Irish economist Stephen Kinsella puts it in “Boom Bust Boom,” a theoretical model exploring how markets function in conditions of perfect transparency, equal access to information and universal rationality can be useful in many ways — until you forget that it’s a theoretical model and start confusing it with reality. No human society has ever operated on that basis, and outside the erotic fantasies of Ayn Rand, it’s hard to imagine one that might.

In any case, Adam Smith and John Stuart Mill also go unmentioned, let alone more recent free-market ideologues like Friedrich Hayek or Milton Friedman. Is it important for the high-school seniors or community-college freshmen who might watch “Boom Bust Boom” to know those names? Maybe not, but their influence has so thoroughly permeated Western politics that even a mainstream Democrat like Hillary Clinton, while nominally representing a more Keynesian view, has to make ritual noises about the supremacy, efficiency and even moral superiority of the market.

Actually, one of the philosophical problems involved in the Clinton-Sanders race — you knew that’s where I was going, right? — is the question of what economic theory or ideology Clinton and the Democratic Party represent in 2016. It’s probably fair to say that it’s a variable mixture of free-market hopefulness and lightweight Keynesian interventionism, driven more by political calculation than by core beliefs. But no one really knows! Hillary Clinton’s unreleased six-figure speeches to Goldman Sachs and other Wall Street firms embody this a little too perfectly. Gosh, it’s almost as if what she says in public isn’t what she really thinks (paging Mitt Romney!), and as if she doesn’t want us to know what she tells the overlords of the economy behind closed doors.

Under Bill Clinton, the Democrats conclusively ditched the Keynesian model in which government plays an active role in regulating the financial markets, and flung the FDR-LBJ welfare state out the window after it. Those were some good times! Britain’s Labour Party under Tony Blair did exactly the same thing, and both parties got stuffed to the eyeballs with Wall Street and/or City of London cash. If “designer suits purchased by so-called liberal elected officials” is construed as a leading economic indicator, then the economy was booming.

Jones and Kocken make fun of George W. Bush for delivering a State of the Union address in 2006 telling us the economy was in great shape, but that’s almost too easy. There’s no doubt that Bush drove the economy into a brick wall by spending countless billions (if not trillions) on pointless overseas wars, but it was the Clinton administration that had removed the brakes from the car. Perhaps more tellingly, we also see Gordon Brown, the future British prime minister who was then Tony Blair’s chancellor (or finance minister), assuring Parliament that Labour’s policies had brought a permanent end to the cycle of boom and bust. Every economist in the film agrees that this is deluded self-confidence is a universal feature of bubble-mania: Things are different now; we’re smarter than our grandparents; the stuff that went wrong in the Dutch tulip craze or the South Sea bubble or the stock-market crash of 1929 can’t possibly happen again. Everyone who says that is always wrong.

Anyway, it took more than 20 years after the Clinton-Blair rebranding of the electoral left (as, in effect, the squishier, friendlier right) for large swaths of the public to realize how thoroughly they’d been conned. Now Hillary and payday-lender BFF Debbie Wasserman Schultz and the rest of the compromised Democratic Party apparatus find themselves in a tough spot. In Britain, the Blairite wing of the Labour Party didn’t see the danger coming. After an unexpected defeat in the 2015 election, Labour’s leadership assumed the public would swing back toward the center-right. So they hilariously sandbagged themselves with the equivalent of a nationwide primary campaign, which was intended to reduce the influence of the left-wing labor unions. It produced exactly the opposite result: New members signed up by the hundreds of thousands (many of them young people with no previous political affiliation) and Corbyn, a lifelong outsider initially seen as a token hard-left candidate, won in a landslide.

The situation in the United States is obviously quite different, but not quite as different as the Clintonistas wish it were. I have repeatedly argued that Bernie Sanders never had much of a shot. For various reasons good or bad, Sanders has made few inroads with African-American voters; after big primaries in Michigan this week and Florida, Illinois and Ohio next week, his campaign is probably over in all but name. But if the Democrats were holding a two-month national campaign on the Labour model, ending with a nationwide primary in April or May — well, of course I don’t know what would happen, but the result would be closely contested and the party leadership would be sweating bullets, rivets, bolts and exhaust manifolds.

I’ve already made the argument that the Democratic Party is in a whole lot more trouble than is visible right now. One aspect of that is the fact that a campaign between Hillary Clinton and Donald Trump is full of unknown unknowns and hidden dangers. An institutional centrist famous for prevarication, triangulation and rhetorical drift is precisely the wrong candidate to run against a demagogue who is immune to facts or reason, defines himself as an economic populist and is more than happy to attack her from the right and left at the same time.

Of course Clinton is now walking back her decades-long support for heartless neoliberal policies of austerity, privatization and free trade. At least in the Democratic campaign, she has slid right past the friendly, center-left Keynesianism of “Boom Bust Boom” to position herself as the decaf Bernie, with more hardheaded practicality but only 20 percent less passion. I understand why she thinks that’s the right strategy; I don't know whether she expects anyone to believe it.

”Boom Bust Boom” opens this week at the Village East Cinema in New York, and will be available on-demand from iTunes and other vendors beginning March 15.

Andrew O'Hehir

Andrew O'Hehir is executive editor of Salon.

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