Molly Ivins May 20

AUSTIN — Diversion is the political fashion of the day. Coming up in Congress, we find that all-important flag-burning amendment on the agenda. That one's always good for politicians who want to promote their patriotism. Gay marriages — boy, there's a threat to us all. The Ten Commandments being posted on a courthouse wall — more good political posturing.

Late-term abortions — a terrific red flag issue — are, according to Sen. Rick Santorum, done only out of "selfishness and self-centeredness." Thank you for that vote of confidence in the moral fiber of American women, Sen. Santorum.

Yes, that's certainly the way it happens. Many a woman who is seven months pregnant just waddles past an abortion clinic and says: "Oh, darn — I knew there was something I'd been meaning to get around to. It's right there on my list: 'Get hair done, get rid of baby.'"

Our senators, who know so much more than doctors do about what should be done in the case of a life-threatening pregnancy, have now straightened out the medical profession on this issue. Let us all be grateful.

The president is on an equally elevated path, promoting racial harmony, volunteerism and other controversial initiatives. It's nice that he apologized on behalf of the nation to the victims of the Tuskegee "experiment," in which black men were used as guinea pigs in a novel approach to treating syphilis — not treating it at all. They were certainly owed an apology. Now, any apologies for Mount Carmel or Ruby Ridge coming up?

In the meantime, there are a few larger issues begging for attention. To be sure, importance is relative, but just a few matters that affect the lives of hundreds of millions of people daily and the future of democracy could use some attention.

According to Time magazine, economists are puzzled by the economy. Yes, it seems that this combination of high profits, low unemployment and low inflation is just not supposed to exist. Milton Friedman and the "Chicago school," the contemporary disciples of Adam Smith, have long claimed that unemployment cannot go lower than 6 percent — call it 10 million people — without touching off inflation.

Brother Alan Greenspan at the Federal Reserve is a true believer in this school of theology and has already raised interest rates once to stave off the inflation he keeps expecting to appear.

The tell-tale sign, of course, is the dread statistic "wages going up." EEEK!

Of course, wages have yet to recover from their drop in the last recession. Six years of growth, stocks at record levels, 13 million new jobs. But watch those wages. If the workers were to get anything out of this economy, Greenspan would have to close down the whole show.

The problem with the "puzzling" economy is not the economy — it's the economists. As Robert Kuttner documents in his excellent book "Everything for Sale," the field of economics is now so dominated by devout free-marketeers that even Adam Smith himself is considered squishy soft. The great 18th-century economist held that art and education should be outside the marketplace. Imagine.

Kuttner observes: "The economy of the 1990s has offered the paradox of escalating gains to productivity via Smithian efficiency, coexisting with declining purchasing power and declining job security for most ordinary people. Resources are allocated in a more marketlike manner, but overall performance is nonetheless mediocre and living standards are mostly stagnant."

John Maynard Keynes, the great 20th-century economist, held that a degree of interference in free markets was justified by a larger efficiency: recovering the potential output that is lost when the economy is stuck in recession and performing well below its full employment potential. Keynes used to offer the Middle Ages as a rather long case in point.

Kuttner also cites Joseph Schumpeter, the great prophet of technical progress as the engine of growth and the defender of imperfect competition as the necessary agent of technical progress. Examples of Schumpeterian efficiency — from the late Bell Labs to German cartels to South Korea — are all around us. "An economy that is performing according to the precepts of allocative efficiency is likely to have both avoidable unemployment and collective underinvestment in technological advance."

Although Smith, Keynes and Schumpeter focused on different forms of economic efficiency, their views are not necessarily in opposition. It is the total domination of economic theory by Smithian zealots that is so disturbing. The radical accumulation of wealth at the top and the disinvestment by government are, on the whole, of rather more significance than flag-burning.

***

Molly Ivins is a columnist for the Fort Worth Star-Telegram.

COPYRIGHT 1997 CREATORS SYNDICATE, INC.