The Rise of Conventional Wisdom and the Death of Common Sense

February 24, 2010

It is cliché to suggest that common sense isn’t so common anymore.  If this is true what happened to it?  Was it ever common? 

We live today in a world deluged with assertions and opinions.  Finding objective facts among the detritus of ideology and bias has become the perpetual needle in the haystack.  The mainstream sources of information (particularly the TV news) find it so much simpler to provide us with a narrative rather than context and facts.  It used to be that our news media lied to us by omission.  Today they look us in the eye and tell us bald-faced lies.  They fill our heads with focus group tested narratives designed to lead us to preordained conclusions.  Thus Conventional Wisdom is born. 

Conventional Wisdom gives us the reasons to believe ideas that run counter to observable reality.  Here’s a few examples:

Conventional Wisdom- Free trade with other nations promotes economic prosperity here and abroad.  They buy more of our products and we buy more of theirs and everyone wins. 

 Reality: US corporations ship jobs to countries with lower wages, few environmental regulations, and government officials who are even more corrupt than our own.  US Agribusiness sells subsidized foodstuffs in the poorer country at prices so low it puts small farmers out of business.  Those farmers move to the city to find work in the new sweatshops.  US workers wages are depressed for those who still have a job because they are competing with a bunch of people who are now unemployed.  Everyone goes to Walmart to buy cheap imported crap because it’s all they can afford.

Conventional Wisdom- Tax cuts on the wealthy helps to create jobs for you and me because when very, very rich people have more money they invest it and this creates jobs.

 Reality: In today’s economy the very wealthy rarely invest their vast fortunes in creating new businesses.  Stocks, bonds, financial derivatives, currency trading, foreign economies- this is where the wealthy invest.  It is far simpler to put your money in the hands of some investment bank while you sit around the pool collecting your dividend check.  It is worth noting that the richest 400 families in the US possess a collective wealth of  $1,570,000,000,000.00.  That’s 1.57 trillion dollars, last year they paid an average of 16% tax on their income. 

http://ampedstatus.com/during-economic-crisis-wealth-of-400-richest-americans-increased-by-30-billion

From 1932 to 1981 the tax on the income above today’s equivalent of $3 million was never less than 63%.  The United States created millions of jobs during this period of time.  In fact higher taxes on extreme wealth has always had the effect of motivating those in very high paying positions to take smaller salaries, and to invest profits back into the business and into employees.  http://www.truthandpolitics.org/top-rates.php

Most of the people who are telling you this nonsense make more than $3 million dollars per year.

Conventional Wisdom- Free markets, unimpeded by government regulations allow the forces of self-interest and competition to regulate economies.  These forces act like an “invisible hand” to lead people to make the kinds of good decisions that foster stable, prosperous economies.

 Reality: Free market theories apply very nicely to the mom and pop stores on Main street, and in local economies.  But this theory breaks down in a number of ways when you are talking about corporate capitalism operating on a national and especially on a transnational basis.  Regulations on small businesses were often put there at the behest of corporate lobbyists.  But removing regulations for the sake of these lobbyists in the name of free markets often has disastrous effects on our economy and workers.  Listing all the ways that unregulated free market theories fail could take days, but I’ll just list a few:

–         Corporations pay their executives ridiculous salaries, with bonuses tied to short-term stock gains.  A man who can walk away with millions has very little interest in what happens to a company after he is gone. (ex. banking crisis)

–         Corporations have a profit motive to produce their products in the cheapest, dirtiest place possible (think China).

–         Corporations have an interest in crushing their competition.  Unregulated markets provide a number of ways for large companies to put their competition out of business. (for example underbidding or underselling at a loss to put the other guy out of business, Chinese companies have been doing this for years)

–         Some corporations will engage in fraud on a massive scale by operating on a business model that is so complex that few can understand it.  When the eventual fraud is revealed massive damage done to individuals and the larger economy can be devastating (Enron and Bernie Madoff).

Are you beginning to see a pattern here?  Conventional Wisdom uses theories and ideas to describe an ideal situation that will supposedly benefit everyone.  Common Sense ignores the bullshit theories and instead looks at the observable facts.  Conventional Wisdom sounds so simple and can be expressed in a few words or in couple sentences.  Common Sense allows that the world is a very complex place, and that just looking at the tangible facts requires historical background, definitions and context.  Conventional Wisdom makes excuses for why neither the Republicans nor the Democrats seem to be working in the interest of the American people.  Common Sense recognizes that they aren’t.  Conventional Wisdom is what you get from the multimillionaire with the perfect hair on the TV.  Common Sense is what you get when pay some freakin’ attention to what’s going on in your neighborhood, your town, your state.  Turn the TV off and start paying attention.

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