What does "the economy" do?

David Dayen, writing in today's New York Times about generational supervillain Larry Summers, comes up with this concise little summary of US economic policy as espoused by both ruling parties over the past 50 years or so.

Mr. Summers was not especially novel in his preferences. He fit within an economist consensus that has largely governed the country since the late 1970s. The free trade consensus enabled corporate executives to chase cheap labor and centralize production. The just-in-time consensus pushed companies to only order what’s needed to pass on to customers, with inventories seen as unnecessary costs. The bigger-is-better consensus encouraged mergers and market dominance. The deregulatory consensus breaks worker power and greases the whole system. The Wall Street consensus lets investors dictate adherence to everything else, demanding ever-higher profits and returns that flow not into reinvestment but to them, in the forms of stock buybacks and dividends.

Suck the life out of workers all around the globe so that a very small class of asset owners can hoard the wealth that is extracted. The rest of this article is an explanation of how this strategy stretched itself thin and became vulnerable to real world "supply chain disruptions" caused by events like global pandemics and climate change. "Resilience" is a popular political buzzword these days but we do not use it to talk about becoming a more resilient society. Instead we mostly talk about "risk shifting" in order to keep the wheels of this machine greased by the blood of the poor.  

You don't even have to put your NYT down today in order to see that in action.  This, for example, is from another feature article. 

Poor nations are far more exposed to climate risks than rich countries. Between 2010 and 2020, droughts, floods and storms killed 15 times as many people in highly vulnerable countries, including those in Africa and Asia, as in the wealthiest countries, the report said.

That disparity has fueled a contentious debate: what the industrialized nations most responsible for greenhouse gas emissions owe developing countries. Low-income nations want financial help, both to defend against future threats and to compensate for damages they can’t avoid. The issue will be a focus when governments meet for the next United Nations climate summit in Egypt in November.

“Climate change is the ultimate injustice,” said Ani Dasgupta, the president of the World Resources Institute, an environmental group. “People with the fewest resources, those least responsible for the climate crisis, bear the brunt of climate impacts.” He added, “If you don’t live in a hot spot, imagine instead a roof blown away, a village well overwhelmed by salt water, a failed crop, a job lost, a meal skipped — all at once, again and again.”

Too often, we write and think about these issues, the climate, the pandemic, even  "the economy" as unitary existential questions rather than the contentious political matters they actually are.  Political action is required to break the power of the wealth hoarding class and empower people to build a fairer society. Otherwise the status quo will cause millions to suffer ever more intensely. As Dayen writes, 

The bottom line is that a system without redundancy and flexibility, which assumes that the corporate executives who control it are doing everything in their power to prevent it from breaking, is simply unsustainable.

The shocks will only continue until we reverse course on this prevailing consensus. Democrats put their faith in an economics profession that is far too distant from on-the-ground realities to grasp the consequences of globalization, monopolization, financialization, deregulation, and just-in-time logistics. They failed to recognize how things could crumble because of the vulnerability they engineered.

No country can be perfectly self-sufficient; imports and shipping will still exist. But we can ensure some stability through bringing back manufacturing of critical goods to our shores, while maintaining productive capacity and strategic reserves. Public utility regulation can ensure smoother flow of goods, and competition policy can eliminate price gouging. And infrastructure investments like we’re currently embarking on can force open bottlenecks.

Economists will howl that losing efficiency will raise costs. Those words ring hollow in the face of the highest inflation in 40 years. Broken systems raise costs far faster than resilient ones.

"The economy" as it is currently designed seeks to isolate the wealthy few from the rising costs of "broken systems" by shifting those costs onto the shoulders of the many poor.  That is the first thing that has to change.  Simply put, we cannot have true resilience until we have justice.