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|News||Key Myths of Neoliberalism||Neoliberalism Bookshelf||Recommended Links||The Great Transformation||Deception as an art form||Mayberry Machiavellians||Neoclassical Pseudo Theories and Crooked and Bought Economists as Fifth Column of Financial Oligarchy|
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|Financization of everything in sight||Machiavellism||Deification of market||Globalization of Financial Flows||Pope Francis on danger of neoliberalism||Neoliberalism credibility trap||Greenspan humor||Etc|
The books to read on the subject are
23 Things They Don't Tell You About Capitalism - YouTube
The global economy lies in tatters. While fiscal and monetary stimulus of unprecedented scale has prevented the financial melt- down of 2008 from turning into a total collapse of the global economy, the 2008 global crash still remains the second-largest economic crisis in history, after the Great Depression. At the time of writing (March 2010), even as some people declare the end of the recession, a sustained recovery is by no means certain. In the absence of financial reforms, loose monetary and fiscal policies have led to new financial bubbles, while the real economy is starved of money. If these bubbles burst, the global economy could fall into another (‘double-dip’) recession. Even if the recov- ery is sustained, the aftermath of the crisis will be felt for years. It may be several years before the corporate and the household sectors rebuild their balance sheets. The huge budget deficits created by the crisis will force governments to reduce public investments and welfare entitlements significantly, negatively affecting economic growth, poverty and social stability - possibly for decades. Some of those who lost their jobs and houses during the crisis may never join the economic mainstream again. These are frightening prospects.
This catastrophe has ultimately been created by the tree-market ideology that has ruled the world since the 1980s. We have been told that, if left alone, markets will produce the most efficient and just outcome. Efficient, because individuals know best how to utilize the resources they command, and just, because the competitive market process ensures that individuals are rewarded according to their productivity. We have been told that business should be given maximum freedom. Firms, being closest to the market, know what is best for their businesses. If we let them do what they want, wealth creation will be maximized, benefiting the rest of society as well. We were told that government intervention in the markets would only reduce their efficiency.
Government intervention is often designed to limit the very scope of wealth creation for misguided egalitarian reasons. Even when it is not, governments cannot improve on market outcomes, as they have neither the necessary information nor the incentives to make good business decisions. In sum, we were told to put all our trust in the market and get out of its way.
Following this advice, most countries have introduced free- market policies over the last three decades — privatization of state-owned industrial and financial firms, deregulation of finance and industry, liberalization of international trade and investment, and reduction in income taxes and welfare payments. These policies, their advocates admitted, may temporarily create some problems, such as rising inequality, but ultimately they will make everyone better off by creating a more dynamic and wealthier society. The rising tide lifts all boats together, was the metaphor.
The result of these policies has been the polar opposite of what was promised. Forget for a moment the financial meltdown, which will scar the world for decades to come. Prior to that, and unbeknown to most people, free-market policies had resulted in slower growth, rising inequality and heightened instability in most countries. In many rich countries, these problems were masked by huge credit expansion; thus the fact that US wages had remained stagnant and working hours increased since the 1970s was conveniently fogged over by the heady brew of credit-fuelled consumer boom. The problems were bad enough in the rich countries, but they were even more serious for the developing world. Living standards in Sub-Saharan Africa have stagnated for the last three decades, while Latin America lias seen its per capita growth rate fall by two-thirds during the period. There were some devel- oping countries that grew fast (although with rapidly rising inequality) during this period, such as China and India, but these are precisely the countries that, while partially liberalizing, have refused to introduce full-blown ffcc-markct policies.
Thus, what we were told by the free-marketeers — or, as they arc often called, neo-liberal economists - was at best only partially true and at worst plain wrong. As I will show throughout this book, the ‘truths’ peddled by free-market ideologues are based on lazy assumptions and blinkered visions, if not necessarily self- serving notions. My aim in this book is to tell you some essential truths about capitalism that the free-marketeers won’t. This book is not an anti-capitalist manifesto. Being critical of free-market ideology is not the same as being against capitalism. Despite its problems and limitations, I believe that capitalism is still the best economic system that humanity has invented. My criticism is of a particular version of capitalism that has domi- nated the world in the last three decades, that is, frce-markct capitalism. This is not the only way to run capitalism, and certainly not the best, as the record of the last three decades shows. The book shows that there are ways in which capitalism should, and can, be made better.
Even though the 2008 crisis has made us seriously question the way in which our economies are run, most of us do not pursue such questions because we think that they are ones for the experts. Indeed they are — at one level. The precise answers do require knowledge on many technical issues, many of them so compli- cated that the experts themselves disagree on them. It is then natural that most of us simply do not have the time or the neces- sary training to learn all the technical details before we can pronounce our judgements on the effectiveness of TARP (Trou- bled Asset Relief Program), the necessity of G20, the wisdom of bank nationalization or the appropriate levels of executive salaries. And when it comes to things like poverty in Africa, the workings of the World Trade Organization, or the capital adequacy rules of the Bank for International Settlements, most of us are frankly lost.
However, it is not necessary for us to understand all the tech- nical details in order to understand what is going on in the world and exercise what I call an ‘active economic citizenship’ to demand the right courses of action from those in decision-making positions. After all, we make judgements about all sorts of other issues despite lacking technical expertise. We don’t need to be expert epidemiologists in order to know that there should be hygiene standards in food factories, butchers and restaurants. Making judgements about economics is no different: once you know the key principles and basic facts, you can make some robust judgements without knowing the technical details. The only prerequisite is that you are willing to remove those rose- tinted glasses that neo-liberal ideologies like you to wear every day. The glasses make the world look simple and pretty. But lift them off and stare at the clear harsh light of reality.
Unce you know that there is really no such thing as a tree market, you won’t be deceived by people who denounce a regula- tion on the grounds that it makes the market ‘unfree’ (see Thing i). When you learn that large and active governments can promote, rather than dampen, economic dynamism, you will see that the widespread distrust of government is unwarranted (see Things 12 and 21). Knowing that we do not live in a post-industrial knowl- edge economy will make you question the wisdom of neglecting, or even implicitly welcoming, industrial decline of a country, as some governments have done (see Things 9 and 17). Once you real- ize that trickle-down economics does not work, you will see the excessive tax cuts for the rich for what they are — a simple upward redistribution of income, rather than a way to make all of us richer, as we were told (see Things ij and 20).
Thing I : There is no such thing as a free market
What they tell you Markets need to be free.
When the government interferes to dictate what market participants can or cannot do, resources cannot flow to their most efficient use. If people cannot do the things that they find most profitable, they lose the incentive to invest and innovate. Thus, if the government puts a cap on house rents, landlords lose the incentive to maintain their properties or build new ones. Or, if the government restricts the kinds of finan- cial products that can be sold, two contracting parties that may both have benefited from innovative transactions that fulfil their idiosyncratic needs cannot reap the potential gains of free contract. People must be left ‘free to choose’, as the title of free-market visionary Milton Friedman’s famous book goes.
What they don’t tell you: The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restric- tions that we fail to see them. How ‘free’ a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined ‘free market’ is the first step towards understanding capitalism.
Labour ought to be free
In 1819 new legislation to regulate child labour, the Cotton Factories Regulation Act, was tabled in the British Parliament. The proposed regulation was incredibly ‘light touch’ by modern standards. It would ban the employment of young children - that is, those under the age of nine. Older children (aged between ten and sixteen) would still be allowed to work, but with their work- ing hours restricted to twelve per day (yes, they were really going soft on those kids). The new rules applied only to cotton factories, which were recognized to be exceptionally hazardous to work- ers’ health.
The proposal caused huge controversy. Opponents saw it as undermining the sanctity of freedom of contract and thus destroying the very foundation of the free market. In debating this legislation, some members of the Flouse of Lords objected to it on the grounds that ‘labour ought to be free’. Their argu- ment said: the children want (and need) to work, and the factory owners want to employ them; what is the problem? Today, even the most ardent free-market proponents in Brit- ain or other rich countries would not think of bringing child labour back as part of the market liberalization package that they so want. However, until the late nineteenth or the early twenti- eth century, when the first serious child labour regulations were introduced in Europe and North America, many respectable people judged child labour regulation to be against the principles of the free market.
Thus seen, the ‘freedom’ of a market is, like beauty, in the eyes of the beholder. If you believe that the right of children not to have to work is more important than the right of factory owners to be able to hire whoever they find most profitable, you will not see a ban on child labour as an infringement on the freedom of the labour market. If you believe the opposite, you will see an ‘unfree’ market, shackled by a misguided government regulation. We don’t have to go back two centuries to see regulations we take for granted (and accept as the ‘ambient noise’ within the free market) that were seriously challenged as undermining the free market, when first introduced. When environmental regulations (e.g., regulations on car and factory emissions) appeared a few decades ago, they were opposed by many as seri- ous infringements on our freedom to choose. Their opponents asked: if people want to drive in more polluting cars or if facto- ries find more polluting production methods more profitable, why should the government prevent them from making such choices? Today, most people accept these regulations as ‘natural’. They believe that actions that harm others, however unintention- ally (such as pollution), need to be restricted. They also understand that it is sensible to make careful use of our energy resources, when many of them are non-renewable. They may believe that reducing human impact on climate change makes sense too. If the same market can be perceived to have varying degrees of freedom by different people, there is really no objective way to define how free that market is. In other words, the free market is an illusion. If some markets look free, it is only because we so totally accept the regulations that are propping them up that they become invisible.
Piano wires and leungfu masters
Like many people, as a child I was fascinated by all those gravity-defying kungfu masters in Hong Kong movies. Like many kids, I suspect, I was bitterly disappointed when I learned that those masters were actually hanging on piano wires. The free market is a bit like that. We accept the legitimacy of certain regulations so totally that we don’t see them. More carefully examined, markets are revealed to be propped up by rules — and many of them.
To begin with, there is a huge range of restrictions on what can be traded; and not just bans on ‘obvious’ tilings such as narcotic drugs or human organs. Electoral votes, government jobs and legal decisions are not for sale, at least openly, in modern economies, although they were in most countries in the past. University places may not usually be sold, although in some nations money can buy them — either through (illegally) paying the selectors or (legally) donating money to the university. Many countries ban trading in firearms or alcohol. Usually medicines have to be explicitly licensed by the government, upon the proof of their safety, before they can be marketed. All these regulations are potentially controversial - just as the ban on selling human beings (the slave trade) was one and a half centuries ago.
There are also restrictions on who can participate in markets. Child labour regulation now bans the entry of children into the labour market. Licences are required for professions that have significant impacts on human life, such as medical doctors or lawyers (which may sometimes be issued by professional associa- tions rather than by the government). Many countries allow only companies with more than a certain amount of capital to set up banks. Even the stock market, whose under-regulation has been a cause of the 2008 global recession, has regulations on who can trade. You can’t just turn up in the New York Stock Exchange (NYSE) with a bag of shares and sell them. Companies must fulfil listing requirements, meeting stringent auditing standards over a certain number of years, before they can offer their shares for trading. Trading of shares is only conducted by licensed brokers and traders.
Conditions of trade are specified too. One of the things that surprised me when I first moved to Britain in the mid 1980s was that one could demand a full refund for a product one didn’t like, even if it wasn’t faulty. At the time, you just couldn’t do that in Korea, except in the most exclusive department stores. In Britain, the consumer’s right to change her mind was considered more important than the right of the seller to avoid the cost involved in returning unwanted (yet functional) products to the manufac- turer. There are many other rules regulating various aspects of the exchange process: product liability, failure in delivery, loan default, and so on. In many countries, there are also necessary permissions for the location of sales outlets - such as restrictions on street-vending or zoning laws that ban commercial activities in residential areas.
Then there are price regulations. I am not talking here just about those highly visible phenomena such as rent controls or minimum wages that free-market economists love to hate. Wages in rich countries are determined more by immigration control than anything else, including any minimum wage legis- lation. How is the immigration maximum determined? Not by the ‘free’ labour market, which, if left alone, will end up replac- ing 80—90 per cent of native workers with cheaper, and often more productive, immigrants. Immigration is largely settled by politics. So, if you have any residual doubt about the massive role that the government plays in the economy’s free market, then pause to reflect that all our wages are, at root, politically deter- mined (see Thing 3).
Following the 2008 financial crisis, the prices of loans (if you can get one or if you already have a variable rate loan) have become a lot lower in many countries thanks to the continuous slashing of interest rates. Was that because suddenly people didn’t want loans and the banks needed to lower their prices to shift them? No, it was the result of political decisions to boost demand by cutting interest rates. Even in normal times, interest rates are set in most countries by the central bank, which means that political considerations creep in. In other words, interest rates are also determined by politics.
If wages and interest rates are (to a significant extent) politically determined, then all the other prices are politically determined, as they affect all other prices.
Is free trade fair?
We see a regulation when we don’t endorse the moral values behind it. The nineteenth-century high-tariff restriction on free trade by the U S federal government outraged slave-owners, who at the same time saw nothing wrong with trading people in a free market. To those who believed that people can be owned, banning trade in slaves was objectionable in the same wav as restricting trade in manufactured goods. Korean shopkeepers of the 1980s would probably have thought the requirement for ‘unconditional return’ to be an unfairly burdensome government regulation restricting market freedom.
This clash of values also lies behind the contemporary debate on free trade vs. fair trade. Many Americans believe that China is engaged in international trade that may be free but is not fair. In their view, by paying workers unacceptably low wages and making them work in inhumane conditions, China competes unfairly. The Chinese, in turn, can riposte that it is unacceptable that rich countries, while advocating free trade, try to impose artificial barriers to China’s exports by attempting to restrict the import of ‘sweatshop’ products. They find it unjust to be prevented from exploiting the only resource they have in greatest abundance — cheap labour.
Jan 19, 2019 | www.moonofalabama.org
Jackrabbit , Jan 15, 2019 9:31:08 PM | lin kkarlof1
According to Wolin, domestic and foreign affairs goals are each important and on parallel tracks, as summarized at Wikipedia, the United States has two main totalizing dynamics:The first, directed outward, finds its expression in the global War on Terror and in the Bush Doctrine that the United States has the right to launch preemptive wars. This amounts to the United States seeing as illegitimate the attempt by any state to resist its domination.
The second dynamic, directed inward, involves the subjection of the mass of the populace to economic "rationalization", with continual "downsizing" and "outsourcing" of jobs abroad and dismantling of what remains of the welfare state created by President Franklin D. Roosevelt's New Deal and President Lyndon B. Johnson's Great Society. Neoliberalism is an integral component of inverted totalitarianism. The state of insecurity in which this places the public serves the useful function of making people feel helpless, therefore making it less likely they will become politically active and thus helping maintain the first dynamic.
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Wolin's Inverted Totalitarianism provides the ground work for my suspicions regarding faux populists Obama and Trump:By using managerial methods and developing management of elections, the democracy of the United States has become sanitized of political participation, therefore managed democracy is "a political form in which governments are legitimated by elections that they have learned to control".
Under managed democracy, the electorate is prevented from having a significant impact on policies adopted by the state because of the opinion construction and manipulation carried out by means of technology, social science, contracts and corporate subsidies.
Jan 13, 2019 | www.unz.com
obwandiyag , says: January 13, 2019 at 6:37 am GMTIdiots on here are always going on about how we don't got capitalism, if we only had capitalism, we don't got free markets, if only we had free markets, then everything would be hunky-dory. Without any proof, of course, because there never was and never will be a "free" "market." The US has plenty capitalism. And everything sucks. And they want more. Confused, stupid, disingenuous liars.obwandiyag , says: January 13, 2019 at 6:42 am GMTLook, what you call "capitalism" and "free markets" just means scams to make rich people richer. You read some simple-minded description of some pie-in-the-sky theory of some perfect world where rational actors make the best possible decisions in their own interest without any outside interference, and you actually think you are reading a description of something real.
I'll tell you what's real. Crookedness. Free markets are crookedness factories. As a PhD from Chicago Business School told me, "Free markets?! What free markets?! There is no free market! It's all crooked!"
Jan 13, 2019 | www.nytimes.com
That said, the truth is that libertarian ideology isn't a real force within the G.O.P.; it's more of a cover story for the party's actual agenda.
In the case of the party establishment, that agenda is about redistributing income up the scale, and in particular helping important donor interests. Republican politicians may invoke the rhetoric of free markets to justify cutting taxes for the rich and benefits for the poor, or removing environmental regulations that hurt polluters' profits, but they don't really care about free markets per se. After all, the party had little problem lining up behind Trump's embrace of tariffs.
Meanwhile, the philosophy of the party's base is, in essence, big government for me but not for thee. Stick it to the bums on welfare, but don't touch those farm subsidies. Tellingly, the centerpiece of the long G.O.P. jihad against Obamacare was the false claim that it would hurt Medicare.
And as it happens, many of the spending cuts being forced by the shutdown fall heavily and obviously on base voters. Small business owners are much more conservative than the nation as a whole, but they really miss those government loans. Rural voters went Republican during a Democratic midterm blowout, but they want those checks. McConnell may have trash-talked food stamps in the past, but a sudden cutoff would have a catastrophic effect on the most Republican parts of his home state.
C Wolfe Bloomington IN Jan. 10AndyE Berkley MI Jan. 10
I had an idiot,er, libertarian friend once who actually believed the market would take care of food safety, because people wouldn't buy food from a source if that source was known to have sold tainted food. "What about the people who die in the meantime?" I asked. "Well, it's up to people to decide what to eat. The government shouldn't tell people what to eat." "But how are you supposed to know? How much tainted food has to be sold and eaten before people even know to avoid it? People get sick or die.
What about people's lives?" "Argh, 'people's lives.'" (Eye roll.) "Liberals are always talking about 'people's lives.'" I swear this is an actual conversation that I repeated so many times I have it memorized.DB NC Jan. 11 Times Pick
Ironically, the likelihood of chronic dependency on federal dollars is directly proportional to the redness of the state.Socrates Downtown Verona. NJ Jan. 10
One of the big obstacles I've observed is that conservatives, in general, have to experience negative consequences directly to understand the link between cause and effect. Liberals, in general, are better at imagining negative consequences and taking preventive action before they directly experience it. It has to do with empathy and solidarity, I think. Liberals see someone suffering, and they think, "We should find out what caused that and fix it so it doesn't happen to the rest of us." Conservatives see someone suffering, and they think, "That guy must be a terrible person. He totally deserves what happened to him. It can never happen to me because I'm a good guy." It is only when the negative thing does directly happen to the conservative that he may reconsider. That's when it is important to find a scapegoat- illegal immigrants, minorities, Jews- to blame in order to obscure the causal link.Larry St. Paul, MN Jan. 11 Times Pick
Libertarianism attracts the finest stunted teenaged and hypocritical minds that are either disconnected from reality or that suffer from cognitive dissonance that allows hypocrisy and selfishness to flourish like mutant bacteria. Taxes and good government are the price of any decent civilization...and both of these concepts are completely demonized by Republicans even though Republicans are some of the greatest welfare queens in the nation. Productive, modern, blue Democratic state federal tax dollars have long subsidized rural, religious Republican states that hate the federal government....they curse they horse that feeds them and then they curse even more when the federal teat is turned off. America's 0.1% Robber Barons and crony vulture capitalists curse 'high tax rates' that aren't particularly high compared to the rest of the world while using America's infrastructure, legal system, government-funded research and technology, and corrupted electoral system to make parasitic profits that dwarf those of foreign corporations who pay their fair share of taxes to countries with increasingly better infrastructure and educational systems. The libertarian theology followed to fruition is Somalia-like; an unregulated anarchy of human misery. Decent human beings understand that healthy taxes produce healthy civilization. Today's version of libertarian Republicanism is a demented form of arrested emotional development that's been destroying the USA since 1980. Nice GOPeople.Wilbray Thiffault Ottawa. Canada Jan. 10
Those who believe, like Ronald Reagan, that government is the problem, are about to discover that the absence of government is an even worse problem.Eric Bremen Jan. 11 Times Pick
Senator Mitch McConnel said that the food stamp program is "making it excessively easy to be non productive." Well, Mitch McConnel is not on the food stamp program and he manages to be one of the most "non productive" senator in the history of the US Senate. Congratulation Senator!jrinsc South Carolina Jan. 11 Times Pick
Almost unfailingly, the stoutest Republican supporters seem to be the biggest beneficiaries of government: the military, farmers, pensioners or small business owners. Growing up in a military family, I remember subsidized gas, medical treatment for free and school trips paid by the DoD. Yet anytime there was a Democratic president, it sounded like there would be a coup when our military parents met at picnicks and had a few beers. If anything, Trump and the GOP have finally shown common decent folk what the democratic experiment in America has become: a system that looks alot like feudal systems of the past. Including walls!TM Muskegon, MI Jan. 10
There is no such thing as a free market. Let me repeat it again for effect: there is NO such thing as a free market. Whether one calls it libertarianism or neoliberalism, the idea is pretty much the same: if we just unleash the power of human greed, the market will equal everything out, and we'll all be freer because of it. Sorry, but it doesn't work that way. Our government gives huge incentives to large corporations with the idea that wealth will trickle down into middle class jobs and prosperity. But guess what? Those corporations keep most of the incentives and profits for themselves and their shareholders. The comparatively minuscule recent tax cuts for the middle class pale in comparison to the huge corporate cuts that added $2 trillion to our national deficit. The only thing stopping corporate excess and monopolies is government. Many libertarians cry "starve the beast." Well, they shouldn't complain if they get food poisoning because their food wasn't properly inspected by a government they loath. And neither should President Trump complain, if, like most Americans, his next Big Mac doesn't agree with him.Lex DC Jan. 10
For those who despise government regulations, I offer 3 observations: 1. I lived near Muskegon, MI, prior to the EPA, when 3 foundries were constantly belching smoke and foundry dust into the air. Breathing the air was equivalent to smoking 2 packs of cigarettes a day.
2. I lived in Cairo, Egypt for 3 years. I purchased 4 pairs of prescription eyeglasses before finally giving up. None of them were right - and no regulations meant that I had no recourse.
3. I lived in Accra, Ghana for 3 years. No construction codes meant that the brand new luxury apartment building I moved into suffered numerous problems with plumbing, resulting in mold, flooded floors and sudden loss of water pressure.
In Cairo and in Accra, there was no social safety net. Beggars were a constant. Often they would be horribly disfigured and with no family what were they to do? I am happily retired now, back in Western Michigan, thoroughly enjoying the clean air, safe food, and clean parks. Obama said it best - it's not the size of government, it's the effectiveness of it. And if it's not working, that's on us - we're the ones who put those people in office. 2020 can't arrive soon enough.Michael W. Espy Flint, MI Jan. 11 Times Pick
The Trump voter in my family was a libertarian before switching to the Party of Trump and still believes that government is an interference. One conversation we had was about electricians needing to be licensed. He said electricians did not need to be licensed because if their work led to customers being injured or killed due to a fire, that information would circulate and those electricians would be forced out of the market. I asked him if he cared about the people injured or killed, he shrugged his shoulders and said that's just the way things are. I then asked him what if he was one the customers injured or killed. He looked rather shocked at that question and immediately dropped the subject. That is all that I ever needed to know about libertarianism.Pat Somewhere Jan. 10
I like to pay taxes, I get civilization in return.Goodglud Flagstaff, AZ Jan. 10
"Libertarianism" according to the GOP means that YOU need the discipline of the "free market," but I deserve all the protections and support of the nanny state (financed with your tax dollars, thank you very much.)Michael McLemore Athens, Georgia Jan. 11 Times Pick
As George Lakoff reminded us, what the anti-government folks call "regulations" are, for the most part, "protections." We shouldn't let the Kochs, Trumps, McConnells, and Ryans frame the discussion. "The term "regulation" is framed from the viewpoint of corporations and other businesses. From their viewpoint, "regulations" are limitations on their freedom to do whatever they want no matter who it harms. But from the public's viewpoint, a regulation is a protection against harm done by unscrupulous corporations seeking to maximize profit at the cost of harm to the public." https://georgelakoff.com/2017/01/28/the-publics-viewpoint-regulations-are-protectionsFunkyIrishman member of the resistance Jan. 11 Times Pick
At some point the American people need to realize that conservative/libertarian pundits are just on-air hucksters selling a product. Instead of selling Vegematics, Ginsu knives or non-stick cookware, they are peddling right-wing bile for a profit. And the profits derived from their corporate advertisers are huge. Forget truth or journalism, Rush Linbaugh openly proclaims himself to be an "entertainer" and not a "journalist" (mainly to make it more difficult to sue him for falsehood). Ann Coulter similarly declares herself a "polemicist". Forget for a moment the subversive influence of Russian money and hacking on American politics. Our own homegrown corporate advertisers are eagerly subverting America by underwriting glib purveyors of corrosive right-wing propaganda, who will slyly proclaim the gospel of unbridled greed and not of social responsibility. Of course drug companies don't want the FDA. Why would they want oversight to keep the public safe, when safety costs them money? Why would banks want regulation to safeguard the financial system and consumers, when regulation interferes with short-term profits? The Koch brothers don't want pesky interference from the EPA in regulating their mega-refinery in Minnesota. Their family homes are in Aspen, Palm Beach and Manhattan, so why should it concern them if effluent rolls through St. Louis, Memphis, and New Orleans? Don't dare call this something so plain as "greed". Wrap it in a bow and call it "libertarianism".earlyman Portland Jan. 10
Republican mantra (even Libertarian) is to be left alone, so long as THEIR way of life is left alone, and they are subsidized by you for living that way. That may mean a MASSIVE military to be a deterrent, or to go invade some other country to keep the oil flowing. That may mean subsidizing all sorts of industries, businesses and the like, because they cannot compete at all on a truly free open market. That might mean support for all sorts of social programs, health programs, education programs and the like as well, because bootstraps only take you so far. I would use the word hypocrisy, but that would entail that many know what they speak of when describing what Libertarian, or Socialist. or another ''ist'' form of government actually means. We are all in this together or we are not. There is no in between, but many would have you believe it is possible. It is not.Linda Sausalito, CA Jan. 10
@Bill Once you our you loved one eats salmonella contaminated lettuce and nearly dies, good luck going after, or even finding, the agra-business across the country who caused it.Will Schmidt perlboy on a ranch 6 miles from Ola, AR Jan. 10
European food is heavily regulated, uh, by governments. Much tastier and doesn't contain known carcinogens. Watching the train wreck of the United States.Michael Kelly Bellevue, Nebraska Jan. 10
@C Wolfe This rings so true for me too. I majored in economics at UICC in the early seventies. My favorite prof was a PhD candidate at U of Chicago, and one of his advisors was Milton Friedman. Being at UICC, I did not study under the great man, but I did under one of his acolytes, who was close to tenure (ABD, if I remember correctly), and I thought, a very intelligent one. One of his two areas of doctoral specialty (you had to have two; his other was labor) was macro, and I took him for among other things, money & banking. In fact, I took M&B twice, because the first time (I got an A) was from a Keynesian, and I wanted to get it from a Quantity Theory guy; another A.) Because my prof was a diciple of M.F., I got to attend several special lectures at UC, and partake of the kool-aid. Well, I heard directly from the horse's mouth how consumers would boycotte inferior suppliers and only the best would survive. The free market would favor the best and punish the worst. Of course, this required perfect information. Unfortunately, no good case was made how a perfect information economy could be achieved nor how consumers could afford to acquire perfect information. The price of discovering bad suppliers of tainted food would surely include the deaths of some number of consumers before that information became generally available. We debated perfect markets and perfect information but never did get a convincing case for abandoning government inspection of food products.LT Chicago Jan. 10
The famous Republican philosopher Grover Norquist once said that he's want to have government so small that one could drown it in the bathtub. Right now, nearly one million government workers are facing the prospect of drowning in debt. Trump suggests that they could make do like he always used to, namely declare bankruptcy or go to daddy for a loan. All this while court jester Pence 'handles' the negotiations. His idea is to make more requests while staying firm on a wall.Norm Weaver Buffalo NY Jan. 10
Perhaps the GOP base will finally learn just how dependent they really are on the government they profess to hate. Trump loving farmers and small town business owners are in for a particularly nasty surprise. It's not just farm subsidies. As described by Michael Lewis in "The Fifth Risk": "As the U.S.D.A.'s loans were usually made through local banks, the people on the receiving end of them were often unaware of where the money was coming from. There were many stories very like the one Tom Vilsack told, about a loan they had made, in Minnesota, to a government-shade-throwing, Fox News-watching, small-town businessman. The bank held a ceremony and the guy wound up being interviewed by the local paper. "He's telling the reporter how proud he is to have done it on his own," said Vilsack. "The U.S.D.A. person goes to introduce herself, and he says, 'So who are you?' She says, 'I'm the U.S.D.A. person.' He asks, 'What are you doing here?' She says, 'Well, sir, we supplied the money you are announcing.' He was white as a sheet." There are rural counties in this country that are only viable with government money. Trump counties. It's going to be an expensive and painful education. Trump University lives.George Chicago Jan. 10
If ever there was a group that lives in a fantasy world, it's the libertarians. In another article in another newspaper that dealt with "intrusive" government, I submitted a comment saying that I wouldn't be surprised if Libertarians would be opposed to STOP signs and traffic lights because these would constitute an unnecessary infringement on their freedom. Wouldn't you know that a person of that persuasion actually replied to my comment and confirmed my suspicion. Working in an IT position for three decades I dealt with this type daily. Many were 30-something white males, often both cognitively and physically well above average, who had learned to program computers. They were blessed with being raised in two-parent families. I acknowledge the hard work they did to learn to wrestle with computers, but they lacked the perspective to realize that they had not hit a home run but rather had been born on second or third base due to the intellectual and physical gifts they possess that many others don't.They could not understand why others in society could not emulate their success. In one conversation about affirmative action, one such person asked "Why do we need that anymore? There are laws against discrimination.". Many of this type get bit in the behind when some government regulation is repealed then it turns out that THEY are the ones adversely affected by the repeal. But don't waste your breath trying to pierce the fantasy balloon. They hold tight to those fantasies.Red Sox, '04, '07, '13, '18, Boston Jan. 10
I'm waiting for Grover Norquist and the other small government proponents to relocate to Somalia, home of no real government. Why it's not thriving without the yoke of onerous regulations is surprising.Dominic Holland San Diego Jan. 10
"...making it excessively easy to be non-productive." -- Senate Majority Leader Mitch McConnell. The irony is too rich here. While he and his president and the "non-productive" Republican Senators draw a paycheck for soaking up the public dime, kids will go hungry; start-up hopefuls will lose loans; farmers will feel the bite; food will become contaminated and people will fill hospital ER's and strain their health insurance. For openers. The Right is getting its own back on FDR's New Deal. All because "government is the problem." Talk about a self-fulfilling prophecy.Paul K Michigan USA Jan. 11 Times Pick
A relatively minor point: "Maybe you believe that private companies could take over the F.D.A.'s role in keeping food safe, but such companies don't exist now and can't be conjured up in a matter of weeks." Such inspection companies could only exist if they were funded by the food companies they were inspecting. Competition among inspection companies would then obviously lead to grade inflation: hire some other company that is more likely to give you a passing grade, who in turn will be happy to lower standards to attract more customers. This is not an avenue for effective replacement of the FDA. Libertarianism is for chumps and fanatics, no one else.Tom B New York Jan. 11 Times Pick
We lived in a small West African nation for 25 years. There were no collectable taxes because the tax collectors kept what they could extort from poor people, no safety nets such as social security or medicaid/medicare, no fire fighters, no functional road departments, no regulation of pharmaceuticals, an unprepared and unarmed military, no paid federal, regional of local police forces, no judges who were not bought by the highest bidder, no standards for the public hospitals, no communication systems, no running water in major cities, no electric power that functioned more than 4-6 hours a day, and not a single government official who was not on the take.
What we did have were cholera epidemics that killed 5000 people, annual measle epidemics that killed children under 5 years old , villages burned to the ground by wildfire, a school system which did not pay its teachers and finally a 12 year civil war which killed over 200,000 people and a [post war ebola epidemic which killed 12,000 more.
The proper use of taxes was not even a dream. Now in the USA, the "leadership" under its current president and his sycophants are playing personal and infantile grade school games with your and my tax dollars and the congress is helping them do it. Amazing! I feel like I am back home in my 3rd world village .Kinsale Charlottesville, VA Jan. 10
Anarchy is oligarchy. The rule of law -- law crafted by dedicated public servants, who are elected by sober and informed citizens -- is the closest we can come to freedom. Governance that provides basic order and rules and a safety net for when people fail (either from behavior that is unwise or from ill fortune) is part of the rule of law. There are also necessary things that the government can provide (without a profit motive) better than either charity of for profit organizations. Roads and basic science are good examples. Other things are best left alone by government -- things like sex, drugs, and rock'n'roll. These should be principles that we all can live by, but it seems like the so-called conservatives believe quite the opposite. They believe in unregulated guns, flows of money to unregulated trusts, defunded public goods, and violent repression of sex, drugs, and free expression.James Wallis Martin Christchurch, New Zealand Jan. 10
@earlyman correct. The first thing those large corporations responsible will do is use their lobbying power to legislate liability caps on what they have to pay in settlement costs. That's the way the real world works. We're not living in some libertarian utopia.John Moran Tennessee Jan. 11
Problems with the food industry in the US isn't just a new issue since the Trump administration, it has been an issue for decades. The problems of Big Ag and Food Manufacturers lobbying has been so bad, that whenever I see doctors in Germany and New Zealand, the first question they ask is have I been and eaten food in the US in the last six months, when they are trying to ascertain health issues". When the medical community around the world asks about US food intake, you know corporate libertarianism has run afoul and at the cost of the health of America. The fact that foods that can't be sold in Europe for health reasons are dumped in the US just highlights how it is no longer the United States of America, but rather the Corporate States of America. When will the people demand for Separation of Corporation and State?Pete Victoria, BC Jan. 10
I had serious Libertarian leanings up until a few years ago when my family and I moved to Bangalore, India to work for three years. It was an eye opening experience to see what actually happens when you don't have a strong central government regulating things like the air you breathe, the water you drink, and the food you eat.
Bangalore was once known as the Garden City and is considered the Silicon Valley of India, but corporate greed, unchecked expansion, and government corruption, along with no meaningful environmental laws that are actually enforced, has turned it into a nightmare-- or maybe into what Libertarianism looks like in the real world, outside of Ayn Rand novels.
The river beside our street was so polluted it had layers of chemical foam that would reach ten feet in height and blow across the road, stopping traffic.
The nearby lake would literally catch on fire, burning for days. Open sewers ran into nearby water sources. Forget tap water, it would make Flint, Michigan's water crisis seem desirable by comparison. Food safety? Roll the dice and take your chances.
Within a year any trace of Libertarian beliefs were wiped clean from my mind and I longed for strong government regulations to protect me and my family. This U.S. shutdown isn't even a minor taste of what it truly means to live without powerful and enforceable government regulations and protections.Thomas Zaslavsky Binghamton, N.Y. Jan. 10
@Bill it is important to keep in mind that contaminated food can kill you before you even have a chance to pursue remedies. The critical elements for us now leaving much longer than our ancestors involve personal and public hygiene (e.g. safe food, sewer systems), medicine and healthy environments (e.g. pollution controls). I recommend watching the Trashopolis series, its quite informative.Karen Garcia New York Jan. 10
@C Wolfe Decades ago I had a very similar conversation with a doctrinaire libertarian, though it was about a less essential question. I also repeated it many times. The incredulity factor is large. I mean, I couldn't believe the degree to which rationality disappeared.Chris Hunter WA State Jan. 10
On the bright side, a federal judge just ruled Iowa's so-called Ag-Gag law to be unconstitutional, making it easier to expose the filthy and inhumane conditions on factory farms. So agribusiness will be smacked with the double whammy of losing their corporate welfare checks and bribery payments, and having their own cruelty exposed at the same time.
It's obvious that Trump's tantrum of a shutdown is the latest episode of disaster capitalism, or what Naomi Klein has dubbed the Shock Doctrine. Create a crisis, like neglecting New Orleans levees, or most recently, the criminally negligent homicides of Hurricane Maria victims in Puerto Rico, and you allow the vulture capitalists to swoop in and cash in. The entire school system of N.O. is now privatized, and libertarian billionaires are buying up huge chunks of Puerto Rico at bargain basement prices to create palaces. With walls, of course. The trash and overflowing toilets at our national parks are just the ticket for corporations to take them over and charge exorbitant admissions... before selling out to ranchers and drillers to further speed up the Anthropocene. The other semi-bright upshot of this disaster capitalism is that rich conservatives will get just as sick from eating tainted food as the poor. Trump probably figures he is immune, because he likes the polluting cow flesh he consumes to be well-done to burnt. But without getting paid, how long will the White House chefs continue to serve him? : -)hen3ry Westchester, NY Jan. 10
Exactly so. It has been my experience that my libertarian friends are only able to be libertarian because they have been protected all their lives (at great expense, they would argue) by the very government they deride.Mark McHenry Jan. 10
What's fascinating about all of this is how the Gutless Obnoxious Popinjays refuse to take any responsibility at all for the problems. It's always the Democrats fault. I'm surprised that none of them have pointed a finger at Obama. After all, he didn't try to build a wall so it must be his fault that Trump is demanding money for a beautiful wall that will protect all Americans from the outside world. It's fascinating to realize that McConnell, Pence, Trump, and the rest of the obnoxious crowd are getting paid by the government they want to drown. They are contributing to the very cycles of misfortune that they blame people for. Are they going to write letters for every federal employee who loses a home, falls farther behind on loan payments than they should, who can't afford to pay for medical care or the premium? No. The GOP has no plans to share the misery it's causing. Trump doesn't understand or care. This is what happens when a complete incompetent is elected to run a country: chaos, uncertainty, and worse. The party that abhorred communism and the Russians now has a president who may be owned by the Russians. Even if he's not, the entire debacle that is Trump's presidency must warming the hearts of Putin and his "friends" each day it continues. As Obama said, elections have consequences. This is one of them. I don't know about the GOP and the libertarians but I prefer to eat, drink, and breathe safely. It's why I like a functioning government.Lake trash Lake ozarks Jan. 10
The libertarian philosophy is this: while you're young and healthy and productive, you can help make money for your boss. However, once you are old and no longer capable of making a contribution to someone else, it is your obligation to simply die.
If you look at all the proposals of the Republicans, this seems to be the guiding force. Privatizing Social Security so that investment firms can get a piece of the action, privatizing Medicare so that insurance companies can get a piece of the action, and privatizing the military, so that private paramilitary companies can get more than their fair share of the action. It's theft in plain sight. We can't believe it, because it's so obvious.Cowsrule SF CA Jan. 11
It's the chaos this president keeps thrusting on all of us. We can't keep up day to day of his lack of self control, his lack of understanding how government works, the principles of the constitution, the rule of law that has sustained us through the years. He seems to believe that he has the support to destroy everything that keeps us safe. The foundation that made this a great country is at risk. I'm old now and can not believe what I see every day from this American President.Aram Hollman Arlington, MA Jan. 10
@Zhou "I'll sue the company producing it". How will you do that in the absence of any governmental mechanism to enforce compliance with a law suit? And how will you prove contamination in the absence of any recognized standard to show it is present?Otis-T Los Osos, CA Jan. 10
@Bill So, you prefer the pound of cure known as a lawsuit to a regulatory ounce of prevention. Personally, I'd prefer to avoid both the discomfort of food poisoning and the expense of a lawsuit. Besides, do you really think you'd win? None of the many people poisoned by contaminated vegetables at Taco Bell stores a few years ago had any chance of even bringing a lawsuit, much less winning one and gettting compensation. It took regulatory agencies, public health departments, and the national Center for Disease Control simply to track down the offending vegetables and force Taco Belll to clean up its act. As for your checks and balances, most of the checks go from lobbyists to congressmen, and that throws any balances way out of whack. Your annual deficit figure of $1 trillion is out of date. The latest Trump tax cuts raised it to $1.5 trillion. So, start worrying real fast. But, I'd start worrying more not merely about the deficit, but about how money is being spent. You seem to worry more about the comparative peanuts spent on the FDA (which, by the way, also regulates drugs and medical devices) or the USDA (which also helps regulate food safety). than on the far larger amounts spent on the military (e.g. latest technology F-35 jets that can't fly in the rain), US taxpayer funding of arms sales to foreign countries that neither share our values nor help keep us safe (e.g. Saudi Arabia).JaneF Denver Jan. 10
I work with alot of big Ag companies -- they're constantly raging about government regs and the red tape, etc, etc., but they have HUGE lobby and political power. On an average year, they get an amazing amount of subsidies coming in all kinds of forms, from direct compensation packages to float an industry a la corn, or from electric rates that are lower for them at the expense of the other rate classes. And when any hint of hardship comes, nevermind true hardship, they're front and center for the hand-outs. And they get plenty. All this before we even address immigrant labor! Ha! Libertarian Ag would look WAY different out in the fields. And one thing that would surely be needed: Cheap immigrant (sometimes illigal) labor. You get what you vote for.John Quixote NY Jan. 10
@michjas Except the Republicans could reopen the government if they chose to. They could pass the same bill they passed in December, and then override the President's veto. Their conspiracy is that they won't do that.Cathy NJ Jan. 10
So the party of fiscal responsibility which is already running up the deficit insists on building a wall over 2000 miles of border, seizing private property along the way . When we stopped teaching Geography and Citizenship and dismissed literature as irrelevant to getting a good job, we created an electorate that could be gulled by such propaganda and conned into thinking that fear is our avatar: fear of otherness, fear of government, fear of taxes, fear of liberals, fear of fear itself.Jake Reeves Atlanta Jan. 10
@Aoy when food is contaminated, the FDA is able to locate "ground zero" with utmost efficiency--Food Science 101. Without the FDA--which was established under T. Roosevelt's administration--there is no coordination between the food chain and the population. You can wash your lettuce to your heart's content, but if it was grown in contaminated soil, the cells within are contaminated. So, yes, the FDA is extremely necessary.keith San Miguel de Allende Jan. 11 Times Pick
"Government," declared Ronald Reagan in his first Inaugural Address, "is not the solution to our problem, government is the problem." Yup, Republicans say government is the problem and then they get in power and prove it. The Party of Problem Government.Castor Troy D.C. Jan. 10
Anyone who thinks enforced food safety is unnecessary should go to India and eat in a restaurant anywhere but a first-tier hotel for foreigners. Your odds of getting sick are very high. Ditto in Alexandria, Egypt, and other places I've experienced where profit is important and product is, well, less so. Remedies? Seriously? How will you prove anything? Especially when all the restaurants have the same cavalier attitude toward washing food and hands. You ate the salad? More fool you.alank Wescosville, PA Jan. 11 Times Pick
I wish that shutdowns were actually that-- shut things down. That means no air traffic controllers, no TSA, no border agents. Wonder how quickly the politicians would solve their differences if they couldn't rely on slave labor from unpaid federal employees forced to work?Ecce Homo Jackson Heights Jan. 10
Paraphrasing Marie Antoinette "Let them eat contaminated cake"Ben Chicago Jan. 10
Funny how libertarians never argue for privatizing the military, or law enforcement. When they think it's really important, even libertarians come running back to government. The facts are that markets are only free if they are transparent, and in all of history nobody has come up with a better way than government regulation to make markets transparent. We tried unregulated markets in food production, and it was a disaster - which is why we have federal regulation of food production today. We tried unregulated labor markets and it was also a disaster - which is why we have child labor laws, minimum wage laws, and the full range of other labor regulations we have today. politicsbyeccehomo.wordpress.comCal Prof Berkeley, USA Jan. 10
People forget that government workers are themselves participants in the economy. They buy cars and houses. They go to the grocery and the hardware store. When they don't get paid, the businesses they patronize -- private businesses -- also go without. Yesterday, I had lunch at a famous old restaurant right near the federal plaza in Chicago's Loop. One of the workers there told me that because of the shutdown the place's business had fallen way off. (And that's with the federal courthouse still open. Just wait until the courts shut, too.) It's a closed system, folks.Tom B New York Jan. 10
Spot on. Naïveté about libertarianism runs deep. It was brought home to me when I worked with programmers in Silicon Valley in the 1980s. A fair number espoused libertarian ideas. Yet they had all had their computer science degrees paid for by the Defense Department, many at state universities. I was not too sophisticated myself but even I could see the disconnect between the ideas they were pushing and the real world implications.Rich Davidson Lake Forest, IL Jan. 10
Have you ever actually tried a personal injury case? For a food borne illness? I ask those questions rhetorically because I can tell from your comment that you haven't. As a lawyer, who doesn't often get involved in personal injury cases, I can tell you that people often think they aren't hurting anyone by cutting corners, and are only restrained from doing things like serving contaminated food or doing illegal gas line plumbing by the threat of fines if caught cutting those corners. It's not the lawsuit that makes them take care.Linda Oklahoma Jan. 10
The gilded age of the 1890's seem like a wonderful time for libertarians. The productivity of the nation was high and gaining. But, it came with dirty air and water, bad food and medicine, quackery and robber barons. It was followed by the Roaring 20's where stocks grew without limits and borrowed money paid for it. That did not end well, either. Finally, in FDR's first 100 days, government stepped in and wrote the rules that made life good for most of us. The GOP does not know history and forgot what happened when there was a libertarian society. They are getting an education, finally.Yuri Asian Bay Area Jan. 10
One of the things that might end is the Indian Health Services. The government made contracts with tribes that in exchange for their land, the federal government would provide education and healthcare. It's not a welfare program. It is payment for millions of acres of land. If Indian Health Services ends, that's the same as reneging on a contract. Trump may see tribes going to court to get what was promised to them in exchange for land and lifestyle. If the shutdown continues, lots of people may be taking Trump to court.OUTsider deep south Jan. 10
Do you believe in magic? Religious extremists do. So do Libertarians. And so do Republicans though what they believe is a variant of magic that might be called delusion or magic mixed with whisky and soda, which we call cynicism. What they all have in common is a collective inability to see the forest from the trees: central to their emptiness is the absence of humanity and all the messy ambiguity that entails, instead substituting a bogus certainty that's nothing more than a palliative for existential panic at the absence of self identity grounded in community. Bertrand Russell called it cosmic anxiety. It drives the compulsion for religion, ideology, in fact all systems of coping that avoid the crushing weight of freedom that comes without compass or owner's manual. Whether the god of the invisible hand that directs the market, or the god of clubs with exclusive membership and status, or the god of ancient fables told and retold for a millennium of successive generations, all are rationales for the irrational aversion of responsibility to do the work necessary to make freedom meaningful without making it meaningless for others. The two bargain bins in the basement of modern life are religion and ideology. Libertarianism can be found on the clearance rack for one size fits all.Elizabeth Moore Pennsylvania Jan. 11
Paul, you included this quote from Mitch McConnell, the Senate majority leader... When talking about Food Stamps he has denounced the program for "making it excessively easy to be nonproductive." He has no business being so judgmental. Being productive implies a positive result for society. When it comes to being productive, his entire career is in question.Sherry Washington Jan. 10
@ebmem You don't know anything. For one thing, you are DEAD WRONG. Medicare DOES NOT PAY FOR NURSING HOME CARE AT ALL! MEDICAID DOES, but only for the poor. It is WEALTHY REPUBLICANS who "Medicaid Plan" their assets so the government will cover their living expenses so they can preserve wealth for their heirs. How do I know this to be the truth? I spend 23 years as a government regulator for Medicaid (Medical Assistance) in the state of Pennsylvania.
I cannot enumerate the number of rich Republicans who tried to get the government to support their elderly while the children of those elderly got the money. I could tell you stories, including one about a certain Republican Governor of Pennsylvania who tried to put his adult, but mentally handicapped child on Medicaid.Will Hogan USA Jan. 11
It is remarkable how farmers, who are particularly reliant on federal government programs to buy seed, equipment, get loans, get crop subsidies, and market their food, still support Trump, even though these programs are shut down and he's started a trade war. One farmer in today's issue supports Trump, saying "we need some border security", even though it means he might lose his farm. What kind of politics is this where people support a President who intentionally ruins their prospects and their way of life? It reminds me how dictators keep power through propaganda, rewriting history and painting its leadership as heroic. Fox News is like North Korean TV rewiring Republican brains to believe that Republicans, no matter how bone-headed, are always good, and Democrats are always bad, so much so they are willing to lose the farm, like North Koreans are willing to starve.ridgeguy No. CA Jan. 10
@Mark Nuckols all the government programs that help business mean that the wealthy owe some money back. when 5000 workers of a large corporation all drive the company trucks on free public roads built with tax dollars, when those roads need repair, it sure should be taxes on the company that helps pay, along with the gas tax we all pay. Your mistake is in thinking that the income of the company owner was earned by him and him alone, but in reality, the taxpayers helped him plenty every step of the way. You just did not see it all.Chris DC Jan. 10
The article focuses on food inspections, but what about drug inspections? Is the FDA inspecting pharma manufacturing houses? Are they inspecting precursor chemicals commonly imported from, say, China? Libertarians (along with the rest of us) may be in for much more consequential disappointments than bad lettuce.Areader Huntsville Jan. 10
Well, at this point it certainly comes as no surprise that the narrowly tailored ideological conceit republicans like to think of as - laughably - 'Libertarianism' was little more than an economic grubsteak to the plutocratic interests. Indeed, it makes my head spin to think how quickly the so-called libertarians of the republican party would support rollbacks on women's reproductive liberties, not to mention the liberties of minorities and the LGBTQ community, not to mention how they would import the Christian Right's version of theology into the public domain. (Ah yes, get government off our backs, but shove God into every home.) The issue that looms broadly over all this, however, is the republican's intent to liquidate this nation's status as technologically advanced, industrialized liberal democracy. Apparently the maintenance/perpetuation of modernity is not compatible with right wing notions of 'liberty,' let alone libertarianism.Peter CT Jan. 10
The first libertarian I knew was a slum landlord who did not want the Government regulations concerning maintenance of apartments and the like. This seems like a common trait among the political group as I think libertarians are more interested in profit.Sophia chicago Jan. 11
No one complains more loudly and more often about attempts to curtail his first amendment rights "guaranteed by the constitution," than my libertarian friend, who refuses to pay taxes, then expects the government he won't support to protect his freedoms. If you really miss those debate club arguments from jr. high school, go try to talk sense to some libertarians. For the rest of us, plain old Republicans are a perfectly adequate source of flawed reasoning.sapere aude Maryland Jan. 10
@Mark Nuckols Wrong! Cutting tax rates on the wealthy are stealing from the rest of us. We make contributions every hour of every day which are hoovered up by the wealthy and the powerful. Meanwhile we cannot afford the cost of living, which has skyrocketed vs wages and benefits. The cost of an apartment is exorbitant. The cost of health care is exorbitant. Meanwhile the commons suffer. Infrastructure suffers. Sidewalks are a menace. There is lead in the water. Rich people who do not pay their fair share of taxes are stealing from the people in so many ways it's impossible to count them. But count them in years lost, in lives cut short, in lives blighted.Helena Princeton New Jersey Jan. 10
Republicans aren't against government, it has grown more under every Republican president including Reagan himself. They simply have their preferences as to who benefits from it.YoursTruly Pakistan Jan. 11 Times Pick
I'm surprised that the air traffic controllers haven't all called in sick. They have the collective power to bring air travel to a standstill. I've long felt that a general nationwide strike would finally get the attention of our corporate overlords. After all, all they care about is money--just like Trump and the GOP.dpaqcluck Cerritos, CA Jan. 10
When two elephants fight, its the grass that gets uprooted. In this show of arrogance and egos its the lives of many ordinary Americans that is adversely affected. I only wish that this crisis comes to an end soon to the relief of many.PB USA Jan. 10
@jrinsc, exactly right with an academic exception. Adam Smith and his ideas of free market competition assumed that there would be large number of companies competing with each other with their sole means of competition being consumer satisfaction, price and employee efficiency. Anyone who couldn't compete went out of business, hence "free market". The government's only role is to enforce anti-trust laws to keep businesses small and competitive, and assure that the competitive triangle of business, labor, and consumer are kept in balance. Fundamentally big business is bad, always! What real "free markets" DO NOT include is the idea that a small number of huge companies pay the government to create a competition free environment. The term "free market" has been stolen to mean that companies can do anything they want to succeed, including creating laws with profitable loopholes, laws to inhibit labor participation in the competition, and laws that inhibit consumers from using fraud laws to suppress shoddy products. In reality there is no "free market", as @jrinsc said, except to mean that big companies are free to do whatever they want to be profitable.White Buffalo SE PA Jan. 11
My first lecture in economics dealt with free. The professor, then the Chief Economist at the Cleveland Fed, made the point that nothing was free: no free lunch; no free air; no free love. The point that he made was that somebody always pays. For everything; maybe not you, not now; but somebody does. So every time that I hear this Republican rant about free markets, I begin to laugh.J. Benedict Bridgeport, Ct Jan. 10
@dpaqcluck Adam Smith believed corporate entities needed to be regulated. something always left out.John California California Jan. 11
I am wondering if Mitch McConnell and his close Republican allies have been living off food stamps because it seems to me they all have been incredibly unproductive for years which he sights as a consequence of anyone using food stamps.James Lee Arlington, Texas Jan. 11
@Joel Sanders This is completely specious reasoning. There are any number of non-state food groups that compete to set, e.g., organic, standards for food... for their participants. And they can restrict anyone from using their seal of approval without meeting their requirements. What they can't do, and the State can, is to require tainted products to be removed from distribution. Having the power of the State depends on law that transcends private agreement. And in the case of food, drugs, highways, airlines, and a number of other avenues of social life, that strikes me as a valuable thing. Why is this SO difficult for you, Mr. Sanders?Aubrey Alabama Jan. 10
I once heard a conservative economist give a speech in which he denounced the FDA for its suppression of competition in the pharmaceutical industry. I asked him what would protect the consumer if the market replaced the Feds as regulator of new drugs. He responded that, if my wife died from the effects of a toxic drug, I could always sue the firm that produced it. I found this notion deeply comforting. I might lose my wife, but the drug company would have to compensate me with a pile of dollars, assuming I could prove its negligence. For this libertarian, a life and money weighed equally in the scales of justice.Stan Sutton Westchester County, NY Jan. 10
The people who support libertarianism are like those who support biblical literalism (fundamentalism). The libertarians want to get rid of some laws and regulations but not all of them. Just the ones they don't like. Usually these are laws which make corporations and businesses sell clean and safe food, treat employees fairly, pay taxes, etc. The libertarians don't want to get rid of laws which help business, corporations, and the well-to-do. They want to be sure that Boeing, Lockheed, and others get cushy defense contracts, the petroleum companies get subsidies, Big Pharma gets to charge a lot for drugs, etc. It is just a new name for the same old playbook -- make things tough on the weak and poor -- those with dark skins, immigrants, etc. All the while being solicitous for the well-off and powerful. Religious literalist do the same -- pick out the Bible verses which support the desired message. Ignore those which don't. So many things don't change. We get give them a new name.RLiss Fleming Island, Florida Jan. 11
Actually, Krugman didn't confuse Libertarians and Republicans. He said that Republicans used Libertarian rhetoric but weren't true Libertarians, and he didn't accuse Libertarians of favoring Republican policies across the board.DB NC Jan. 10
@Bill: See Michael Moore's Fahrenheit 11/9, which covers the Flint water crisis in depth. These people didn't even know they were drinking contaminated water until a health worker broke ranks and made it public. THEN nothing was done.....(Oh, the state provided bottled water for a while, to drink).... The children of Flint were suffering IRREVERSIBLE brain damage due to lead in the water.....would suing 20 years later fix that? AND why did this happen at all? The Republican governor of the state wanted to help his buddies make a lot of money....Red Sox, '04, '07, '13, '18, Boston Jan. 10
@Goodglud Excellent link! We need to call it what it is. No more reduce "regulations" which people hear as reducing red tape. Make them advocate to "reduce protections."Buck Santa Fe, NM Jan. 10
@AndyE, Berkley, MI: Nice turn on Jennings' corollary to Murphy's Law (the chances of the toast falling buttered side down on the carpet is directly proportional to the cost of the carpet).NM NY Jan. 10
@Mamawalrus72 We are living Government by the Kochs now. We have been living Government by corporations for some time.Chris Toronto Jan. 10
Money talks louder than reason. So long as moneyed libertarians like the Koch Brothers buy political influence, they will purchase an agenda to benefit themselves at our expense.Richard NM Jan. 10
"In the case of the party establishment, that agenda is about redistributing income up the scale, and in particular helping important donor interests. Republican politicians may invoke the rhetoric of free markets to justify cutting taxes for the rich and benefits for the poor, or removing environmental regulations that hurt polluters' profits, but they don't really care about free markets per se." Head of nail, meet hammer. The US used to be the world's beacon of democratic values. No longer. The political system has been severely corrupted by PACs, Super PACs, self-funding billionaire politicians, skewed campaign funding rules, cynical electoral manipulation, self-interest and a lack of statesmanship amongst the political classes. You'd think a credible third political party would be able to drive a bus straight through the middle of this division. Two choices, left or right, just can't be enough to sustain a democracy.Audrey Germany Jan. 11
@Will Schmidt perlboy "We debated perfect markets ..." Like in engineering somebody would design a car without engine because there is no friction and you just have to give it a push to get around. I am so happy I am an engineer, forces me into reality.Mike Albany, New York Jan. 10
"Knowing that the food you're eating is now more likely than before to be contaminated, does that potential contamination smell to you like freedom?" Exactly. One of the most thing I appreciated of being in the EU is a strong consumer protection and safety regulations. But I guess, it's to "socialist" for some. Let's wait and see how the UK consumers will enjoy post-Brexit "freedom".JRM Melbourne Jan. 11
In answer to to Bill from Michigan, the problem with food and water contamination is that it may take years to find out that the food or water is actually contaminated, and then additional time for the public to be informed. After all this time passes, the damage is already done and lives are irreversibly damaged. As an example, the FDA has very strict limits on the amount of mycotoxin and bacterial contamination in our food supply. While E. coli contamination may be detected due to severe acute health effects, the carcinogenic effects of mycotoxin contamination may not be detected in years. The Flint Michigan lead contamination occurred in 2014 and wasn't declared an emergency until two years later, when public health officials alerted the public in 2016. Although this was largely a local issue, the H.R. 4470, the Safe Drinking Water Act Improved Compliance Awareness Act, mandates that consumers be informed. So, personally I'd rather have the Federal Government be on the side of the public and not rely on greedy lawyers.SandraH. California Jan. 11
@ebmem Republicans get in office and go to work to prove that Government doesn't work and is the problem. Government works fine as long as Republicans are not in charge. The sabotage any effort to resolve or solve a problem. They complain about the debt and deficit until they are in office and then they blow the budget to smithereens with invented reasons for war so they can enrich themselves. They are the problem, not Government.ben220 brooklyn Jan. 10
@Bill, good luck with that. If you survive long enough to sue--and if you can prove the source of your cancer or other illness--you'll find that personal injury lawsuits get you nowhere. The big boys always win. Your best remedy is prevention. Don't let yourself or your loved ones ingest or breathe toxins. Don't let toxins into your groundwater or soil. How do you do that without government regulation?Robert David South Watertown NY Jan. 11
Today, medical expenses are stratospheric. Meanwhile, the conservative movement strangles the welfare state so that nearly everyone in the middle class (regardless of political affiliation) who wants to live on more than $900 a month must go through legalized fiscal contortions to be able to pay for adequate care.Socrates Downtown Verona. NJ Jan. 10
@TM Exactly the correct response to libertarians. They like to talk about what "would" happen, as though lack of government were a theoretical that can be calculated. There are plenty of real world examples of what "would" happen. There are historical examples too, but they "would" be different, of course.Buttons Cornell Toronto, Canada Jan. 11
@Aubrey Excellent analogy, although we can also use a good old-fashioned term to describe these 'libertarians', 'conservatives' and religious types -- -- hypocrites ..... of the highest despicable order.george Iowa Jan. 11
What courts? Courts are set up, run by and paid for by government. No government means no court system. You, the little, dying from tainted food, up against a huge agricultural corporation with deep pockets. Libertarianism is a bully system. Those with the money win and the rest die. That's it.HN Philadelphia, PA Jan. 10
@jrinsc How quickly we forget, of course sometimes it isn`t that we forget but rather our memory is clouded by the smoke from the fires set by vulture capitalism. Upton Sinclair The Jungle should be required reading for all congress critters and all incoming Presidents. The Jungle is a mirror to where todays American Nobility, the 21st century Robber Barons, would like to take us. A disposable population for profit.Independent the South Jan. 11
Where you see Libertarians, I see people who are so self-unaware and entitled that they believe the only apt government subsidies are the ones that benefit them. Remember the ACA debate line - "keep government out of my medicare?" Most people have no idea of what the government does! What about the staunch GOP voters who nonetheless complain when the government doesn't provide immediate aid to them after a disaster, but hesitate when the aid is going to others? And do they comprehend that all disasters - even those claimed to be "natural" - are actually man made? And do those that value privacy and their right to do what they want - do they really think that corporations and businesses will keep their products fair and safe? No, because corporations and businesses take the short view, while fairness and safety - both of which contribute to the health of the nation and its people - take the long view. Libertarians and their ilk are self-entitled peoples who only think about the immediate impact on themselves and their wallets. They change their tunes quickly when government is needed to help their bottom line.Son Of Liberty nyc Jan. 10
@Bill The idea is not to sue after you get sick but to prevent you from getting sick. And if you want to reduce deficits, vote for Democrats.Elizabeth Moore Pennsylvania Jan. 11
What people with GOP/libertarian leanings should realize is that government regulations were ONLY put into place in response to the horrifying abuses of laissez faire capitalism.Nova yos Galan California Jan. 10
@Bill You keep right on believing. THE FACTS ARE that people who would sell you contaminated food have ways of covering up all the evidence. Besides, they could always hide behind the fact that the USDA and FDA inspectors weren't working and "they didn't know" because of that. You would lose any lawsuit because the inspectors didn't reveal any problems and the business owner "did not know to the best of his/her knowledge." EVERYTHING would be blamed on the shutdown, and you would LOSE>Mark Rubin Tucson, AZ Jan. 10
@Goodglud Yes, regulations are limitations on their freedom to pollute.gbb Boston, MA Jan. 10
Boy howdy, but it's easy to spout the libertarian line when the FDA, FTC, SEC, EPA, etc. do what they do, day in and day out. Government succeeds quietly! Many post smack about what seem like excesses, while they enjoy safe food and drugs, modest limits on fraudsters, clean air and water, etc.: Now, maybe, we'll see what happens when those who mouth off get the freedom they have demanded for decades. With a months' long shutdown lives will be lost, but those who disparage the regulatory state might get their come-uppance. The coming months, if they involve a partial shutdown, will highlight the value government offers. Opportunities like this one don't appear often. This writer, for one, hopes it represents a crisis which won't be wasted.JS Boston Ma Jan. 11
Government in this country seems to me to be run pretty well. I wish that more businesses were run as well as the US Postal Service.Lawyermama Buffalo Jan. 10
@C Wolfe I made friends with Libertarian from Texas in college my freshman year. He got me to read Ayn Rand's Fountainhead and Atlas Shrugged. My first take was that Ayn Rand was a pretty weak writer and clearly had serious empathy issues to the point of being a bit creepy. My friend insisted that everyone should be self reliant and was responsible for their own destiny until the day he flunked out because his academically weak high school left him unprepared to survive in our highly selective college. I really felt sorry for him but he was so far behind I could not help him. I have no idea where he ended up.Jim Brokaw California Jan. 10
As the saying goes, you never miss your water until your well runs dry. A very big part of me says this is the only way red states will learn how to stop biting the hand that feeds them: they've been blindly following a party that made no secret that it wished to "starve the beast". This is what it looks like. This new perspective has delighted me even as I worry for my friends, family and colleagues who are feeling the effects. I hope our nation survives this president and learns from the mistakes.Pat Stonington, CT Jan. 11
The problem I have with libertarian utopias is that 'the market' isn't going to work to address all conflicts. So you need to hire enforcement, since government isn't doing it... or are we keeping the courts? And if the courts rule for you, and the other party just refuses to pay, now you have to go get your payment. Good luck with that. It all seems likely to devolve into a 'might makes right' series of standoffs, until people band together into unified groups to collectively agree to a set of rules, and work together with those rules. Sounds a lot like government. Or you can just hire some soldiers and go take what you want. Dare the other guys to take it back. Sounds a lot like anarchy. Libertarians always seems to me like trying to cherry-pick what they like about government, what benefits them, and then dump the rest, the stuff that costs them but they can't see the benefit for. Maybe they'll understand better if they get some contaminated lettuce next time they go grocery shopping...Steve Nirvana Jan. 10
@Bill Who exactly administers said courts that you would turn to for justice? Oh that's right, the government. I hope the irony is not lost on you. Libertarians seem to forgot that no man is an island to himself.Spiro Jetti Jan. 11
The people I have met who (loudly) espouse libertarian ideas tend to be of three types - all of whom benefit from this philosophy at the expense of others: 1) wealthy heirs like tRump who don't want to pay their taxes since it reduces their ability to live large AND pass on a dynasty to their heirs. 2) those with the luck to obtain the particular skills and education that provide a secure job with high remuneration. (Yes, it is usually a lot of luck) 3) good looking women who are confident that they can latch on to one of those described in 1) or in a pinch, 2) 2) will complain bitterly when the job market shifts - as it did for many in computer science after the glory years of the 80s. 3) will complain if their lawyer doesn't get them a big enough divorce settlement and their looks will no longer give them a second chance. A good economic system works equally for all people, not just those benefiting as members of the lucky gene club.SunnyG Kentucky Jan. 10
@Socrates Amen. Something also came to mind in reading your comment: Productive modern blue states subsidize receiving red states, who then, thanks to their outsize representation via the electoral college, bludgeon the blue states with red policies like deregulation and taking of health care etc. Like I am paying someone to punch me. "Something is rotten in the state of Denmark."Rick Cedar Hill, TX Jan. 10
We don't see the few inspectors who quietly keep our food safe, the EPA folks testing our air and rivers. The impact will be felt much later, and with no one to do the forensics, the story won't be told until well after the shutdown ends. I'm wondering how long the shutdown will last when visible folks start to go on strike. Will the federal employees who will perform the promised IRS, Food Stamp and farm distributions go to work, or ally themselves with their less visible brethren? With transportation, chaos will be most evident. After no paycheck on Friday, what if TSA doesn't shows or they picket Atlanta, OHare, JFK, SFO, IAD and DFW? Ditto for their compatriots in the Control Towers. Chaos. Who benefits? Perhaps we'll learn from Michael Cohen.Rima Regas Southern California Jan. 10
We as a nation are in this condition because the American character is one of greed, selfishness, one who does not think for himself/herself, and one that is controlled through fear. Maybe once our empire crumbles it will be divided into smaller countries that are easier to manage like the western European countries. I will move to one of the new countries that support a balanced budget, hates the concept of Citizens United and K Street lobbyists, wants to educate their masses, and provides healthcare for everyone rich and not so rich. An ignorant populous is easier to control and manhandle. The US is a good example.javierg Miami, Florida Jan. 10
@hen3ry "It's fascinating to realize that McConnell, Pence, Trump, and the rest of the obnoxious crowd are getting paid by the government they want to drown." When you go the rest of the way you finally get a true sense of how perverted these people are.Ron Silverlake WA Jan. 11
Thank you Dr. Krugman for a great perspective. It reminds me of the saying "be careful of what you wish for" ... for it may actually come true. Save for the sacrifice of many good Americans who depend on jobs and government benefits and the public in general, this may be the medicine those Republicans need to cure themselves of their hands off philosophy.Jody Quincy, IL Jan. 10
@Bill I don't believe for a nano-second you would be willing to expose your family to contaminated or adulterated food on the chance you might be able sue someone after the fact. It could take you years and many thousands of dollars to get justice that way. There is a good reason we have agencies like the FDA. Many years before you were born, we in fact had the very situation you say you would be fine with. It was buyer beware for all foodstuffs. You could not trust food producers to put on the label what was actually in the can or bottle. Meat packers were packing and sending out absolute filth. If you want a hint of what it would be like here without these protective agencies, do a little research on food safety in China. It will make you sick when you see what the Chinese are exposed to.Thomas Zaslavsky Binghamton, N.Y. Jan. 10
@C Wolfe Libertarian or not, in this country money is always more valued than human life. Again, it took Western Europe more than 2,000 years to become somewhat civilized and it will take this continent at least that long.Anne CA Jan. 10
@Eleanor How will you get around this? Reagan said, 'The nine most terrifying words in the English language are "I'm from the government, and I'm here to help."'Teresa MN Jan. 11
Does the shutdown mean that government will stop collecting tax money while services are suspended? Does it work both ways?James K. Lowden Camden, Maine Jan. 11
@ebmem I am an employee of Medicaid who sees countless fellow workers toil long after quitting time to cover the most people, with the least potential harm or burden to them, to get the best services and quality of life possible, AND doing all that earning maybe half the compensation of a comparable private sector position. It saddens me that even the program ensuring our loved ones - or ourselves! - have care at the end of life is not safe from this kind of bitter, distorted partisan anger.Joe Glendale, Arizona Jan. 11
@Bill Two words for you: Blue Milk. Look it up. Food contamination is an old story, as old as tort law. The FDA was created because tort law was unequal to the task. If you think the modern day is different, how is that romaine lettuce lawsuit going for you? As far as I know, no one knows where the contamination came from, much less who to sue. The romaine situation illustrates another flaw in your libertarian fantasy. The individual harm is collectively huge but individually small. Any action -- preventive or retributive -- requires collective action. Which, actually, is what democracy is, and why democracy created the FDA.Blue Moon Old Pueblo Jan. 11
@Linda You said it, Linda. I just returned from Europe. And I could not believe again how much tastier the meat and produce was - not only in restaurants but in humble meals in the country. Commercial food produced in the United States is terrible, tasteless, and full of pernicious additives. Ma and Pa Kettle have become inured to it, and don't know any better.Sunny NYC Jan. 10
@Wilbray Thiffault "Well, Mitch McConnell is not on the food stamp program, and he manages to be one of the most 'non productive' senators in the history of the US Senate." Correction: Mitch McConnell and his fellow Republicans are indeed on the food stamp program, the best one ever, and the government shutdown is not preventing them all from being paid. They will never give it up willingly.
Prof. Krugman says, "Meanwhile, the philosophy of the party's base is, in essence, big government for me but not for thee." I totally agree. It is indeed Trump and the Republican party who is disrupting the free market. The free market can be sustained only when it is run by smart and fair-minded people including top-notched economists and politicians. Otherwise, the socialism-monster would threaten and collapse the free market anytime. What I mean by 'the socialism-monster' is not the economies of Northern European countries such as the Netherlands, Sweden, etc. Some Americans call their economies 'socialism', but that's very wrong; their economies are indeed one of the most advanced capitalistic systems. How can't they be? Capitalism in a sense started from there, i.e., the business markets of the Netherlands, Denmark, Portugal, etc. Only when capitalism is truly advanced can well-rounded safety nets exist. In any case, genuinely socialist countries such as North-Korea and China do not protect human rights and thus prohibit freedom. The real problem with Trump and his allies is that they offer the strongest momentum for socialism by killing the chance for developing truly healthy free market. Trump, with Putin, is turning the whole world back into the days of nationalism, ideologism, and colonialism. They all champion big , huge, monstrous government. If there is any American crisis, it is not border security but gun violence. But Trump underwrites the NRA.
Jan 08, 2019 | www.nakedcapitalism.com
Stephen Gardner , , January 8, 2019 at 2:23 pm
Human capital. This word as well as any other captures the dehumanizing nature of capitalism. Just a factor of production. We don't have blood and bone and families. We have exploitable skills. Screw that.
Leave not one stone upon another when you rise up and destroy the dystopian economy these swine have created.
cnchal , , January 8, 2019 at 8:47 am
"Human capital" is a deceptive way of saying "buy low, sell high". As an employee, you are bought for as little as possible, and sold for as much as possible, with Davos Man collecting that difference, making him filthy rich off the sweat of your brow. When you can no longer sweat for Davos Man, you are no longer human capital, and Davos Man would prefer you die quietly, so he can enjoy his jets and yachts without looking at the wreckage left behind.
Jan 04, 2019 | www.nakedcapitalism.com
flora , January 4, 2019 at 3:13 pm
re: Tucker Carlson on FoxNews
Our system was created by human beings for the benefit of human beings. We do not exist to serve markets.
Wait, you mean the old 'Twilight Zone' episode about Martians landing and handing out booklets titled "To Serve Man" weren't Martians at all? They were neoliberals?!? /s
Great rant. Fox is a bellwether of sorts, knowing where the public is going, and following for the ratings, imo.
Generalfeldmarschall von Hindenburg , January 4, 2019 at 4:07 pm
Re: Tucker Carlson's epiphany: Well it'd be nice if the Republicans ascendancy from the 80s to Bush II marked the high water tide of the Libertarian Future. I always hope they'd figure out that Free Market worship is idolatry and it's not a god that gets you any results. Unless you have 'grace' (being born into a connected lineage, like the Vanderbilt or deVos noble houses.
Harold , January 4, 2019 at 6:42 pm
The " fetish of capitalism" as Karl Marx aptly termed it. Fetish = idol.
Craig H. , January 4, 2019 at 5:01 pm
Class Warfare section missing Drouet arrest?
French police arrest "yellow vest" spokesman Eric Drouet
By Anthony Torres
4 January 2019
( World Socialist Web Site)
More than 70 percent of French people support the "yellow vests," who have evoked broad sympathy from workers around the world. But the established political parties and the union bureaucracies, totally integrated into the state and already furious that the "yellow vests" have outflanked them, are violently hostile.
Does anybody know where a good poll can be seen?
Oregoncharles , January 4, 2019 at 5:52 pm
Oh boy, now they're creating a martyr. Good strategy, Macron.
Oregoncharles , January 4, 2019 at 6:01 pm
So Macron actually WANTS an insurrection. If the Yellow Vests still control the roads, he may be sorry.
ChiGal in Carolina , January 4, 2019 at 5:24 pm
Re Medium piece on mental health care: none of that is new. I and my colleagues have been fighting those battles as psychotherapists in community mental health since the 90s.
Everything to be concrete and measurable so once your goals are "operationalized" the treatment plan sounds more like marching orders, not to mention being nonsensical:
"Client will achieve 25% reduction in depression as evidenced by daily crying spells reduced to 2x/wk and social interactions increased from 0x/wk to 2x/wk"
Believe me, therapists for the elite don't take insurance because they know the paperwork requirements are bullshit.
Not to mention the records insurance require totally blows confidentiality. It took me several years to accept that there was no way around making dual sets of notes, one in the official chart for purposes of compliance, and another handwritten one for purposes of actual treatment. Sad!
HIPPAA btw is about portability, not privacy. Don't let 'em fool ya.
Dec 27, 2018 | discussion.theguardian.com
Jas636 -> Friarbird , 4 Jun 2018 01:38Why would I refute points that I agree with?internationalist07 07 -> Jas636 , 4 Jun 2018 01:34
I'm not the one who has a problem with neo-liberalism, it's provided for me more than adequately. Having spent a lot of time living overseas, it's provided ALL Australians with a far better deal than a few billion others.
If you are too naive to see this, then maybe you need to try an alternative for a while. It's quite ok, i'll be waiting for when the alternative fails (they always do) and I can come back and pick off the assets from the carcus of that little experiment for less than a cent in the dollar.
The dog eat dog economy simply represents our nature, it's who we are, we thrive under libertarianism.I think you mean Neo liberal utopiaFriarbird -> GoronwyPrice , 4 Jun 2018 01:31Po-faced, Libertarian BOLLOCKS.GreyBags -> Shiner01 , 4 Jun 2018 01:29
Privatisation is sucker-farming.
Milking the punters, like ants milk aphids.
Farming them, like bellbirds do with leaf-bugs.
And even THAT is only part of the equation.
The fondest goal, the one which gives the management class hard-ons ?
Privatisation de-unionises their workforces.It is quite strange that the biggest supporters of neo-liberal economics with its belief that giving money to the rich will solve all our problems call themselves 'Christians'.Friarbird -> RobertJREYNOLDS , 4 Jun 2018 01:20
I can't remember when Jesus preached trickle down. I don't remember the bit where Jesus said to treat those seeking asylum and fleeing violence like they are the scum of the earth. I don't remember when Jesus said the poor needed a good kick in the guts while they are down to motivate them to work harder. I don't remember when Jesus said we should cut funds from the sick to balance the budget. I don't remember Jesus saying that if you bear false witness often enough then you will fool enough of the people enough to keep power so you can look after your corporate buddy buddies.
In fact, almost all of the politicians in the Coalition who proclaim to be 'Christian' must have their own secret bible because nothing I have heard from the New Testament justifies their actions.
Me, I'm an atheist and I have more care, consideration, ethics and compassion than the entire collection of right wing bible bashers sitting in parliament today."......the scam that is neo-liberalism."Ozponerised , 4 Jun 2018 01:19
No throwaway line.
A 'farming the suckers' scam is all it ever was.
With a view to massive wealth transfer.
Hasn't it worked well ?Thanks for this. We need more of these articles pointing out the bullshit behind this story that the Coalition has been feeding the gullible peasantry with for over 30 years, sneering, smirking and sniggering as truckloads of public money goes to private corporations. The money received from selling off public assets has been shoved into private businesses who then feel very free to charge like bulls.Mal_Function , 4 Jun 2018 01:16
It's a shame so many folk still fall for this bullshit meaning that their own families, work colleagues and community get shafted through diminishing public services.Brother Can You Spare a Dimeprettygoody -> GoronwyPrice , 4 Jun 2018 01:11
They used to tell me I was building a dream
And so I followed the mob
When there was earth to plow or guns to bear
I was always there right on the job
They used to tell me I was building a dream
With peace and glory ahead
Why should I be standing in line
Just waiting for bread?
Once I built a railroad, I made it run
Made it race against time
Once I built a railroad, now it's done
Brother, can you spare a dime?
Once I built a tower up to the sun
Brick and rivet and lime
Once I built a tower, now it's done
Brother, can you spare a dime?
Once in khaki suits, gee we looked swell
Full of that yankee doodle de dum
Half a million boots went sloggin' through hell
And I was the kid with the drum
Say, don't you remember, they called me Al
It was Al all the time
Say, don't you remember, I'm your pal
Buddy, can you spare a dime?
Songwriters: E. Y. Harburg / Jay Gorney
Brother Can You Spare a Dime lyrics © Warner/Chappell Music, Inc, Next Decade Entertainment, Inc, Shapiro Bernstein & Co. Inc.'This is more or less the definition of increased productivity and it is what ultimately leads to improved living standards for everyone'Friarbird -> ADamnSmith2016 , 4 Jun 2018 01:05
Lazy, neoliberal, supply-side economic guff. Neoliberals undermine government and democracy and then scavenge on the wreckage. When does 'ultimately' begin for 'everyone'? Never.
'Private companies provide the same service with much less labour'
Firing people is the answer? What a hardened realist you are. Must be great to be so certain in your neoliberal convictions. Are you really telling us that every privatisation has been a success?
These pieces of infrastructure have been built through generations of work and wise investment - they are not any one government's to sell. It's just easier for a corrupt, rudderless, feckless neoliberal shill to sell it than it is for them to to run it.Can't even begin to address the characteristic Libertarian slyness in all that.Tasmanian Cryptik -> 20thCenturyFox , 4 Jun 2018 00:58
But I'll try.
"What you call neoliberalism was a set of responses to the failure of socialism or as Tony Blair said 'what matters is what works'."
What I--what the world--calls "Neoliberalism', is the corpse of Classical economics, resurrected post-WW2 by Friedman and Hayek's 'Mont Pelerin Society. '
Why was it buried ?
Because during the Great Depression, its dogmatic insistence on continued austerity and wage cuts only made things worse.
After all, in an economic slump, whats the worst thing you can do ?
Deprive people of whatever little purchasing power they have.
So, goodbye Classical economics.
After which, govts SPENT their societies out of slump, putting people to work.
(O, the horror ! O, the heresy !)
The public works of that era include Germany's autobahns and the US New Deal projects, including the Tennessee Valley system and similar in Western States.
( O the horror ! O the heresy !)
Friedman, Hayek and the gang looked at those and post-WW2 programs of public benefit, such as the UK's NHS and shat themselves. Typical fear-driven conservatives, they were convinced such programs represented the thin end of the wedge which MUST end in imposition of Soviet-style conditions.
What utter paranoid crap.
Their resurrected corpse of Classical economics ?.
THAT is what is 'Neoliberalism'.
Whether or not I call it so is immaterial.
Then, this lofty bit of finger-wagging assertion;
"This process of economic evolution is necessarily imperfect and incomplete...."
Your Lordship's overview is appreciated...
"....but currently leaves you free to own a computer, read news on-line, communicate using the internet (maybe using NBN?) and express your views freely. "
Sez who ?
Besides, the only one talking about that old bogey, "socialism" is you.
Because its a conveniently perjorative label, eh ?
Pretty infantile, though.
"Anybody who doesn't agree with EVERYTHING I say, must be a 'socialist.' And they can't play with my toys."
PS 'Adam', why do LIbertarians always project a Superiority Complex ?
Why are the buggers always so PLEASED WITH THEMSELVES ?Socialise the losses, privatise the gains.RatioDecidend -> Elizabeth Connor , 4 Jun 2018 00:55intelligent comment. Due to corporate media indoctrinating propaganda it will take sometime for others to understand where the problem lies.20thCenturyFox , 4 Jun 2018 00:41Neoliberalism = Socialism for the Rich - Capitalism for the Poor.grumpyom -> Fred1 , 4 Jun 2018 00:28
Politics needs reform, plain & simple. Fed ICAC and Integrity Commission is a good start but it's not enough. The rules have to change too. Major decisions like privatising services or tax handouts to the rich, shouldn't by law be allowed to get through parliament or the senate unless the claims being made to justify them are quantifiable & demonstrated to be in the National Interest. Currently politicians have no obligation to do either.
e.g. claiming that jobs will be created if Penalty rates are cut = there's no way to quantify such a BS claim and Doug Cameron got them to admit that in Senate Estimates. Even so they were allowed to lie through their teeth and impose it anyway with no requirement to prove their BS claims. This corporate tax handout = once again they claim it will lead to more wealth to average Australians and more jobs but it can't be quantified or guaranteed via regulation so it's all bullshit. The rich will hoard the wealth & kick Australians in the guts as usual. That's what they've always done and always will do. Privatisation of electricity..what a crock of shit. They claimed it would create competition and drive down prices. What's happened? The complete opposite but politicians KNOW they're not accountable and therein 'lies' the problem. The shortsheeting of the original NBN, = yet another lie. They've totally crippled Australia's ability to compete in a digital age and completely screwed regional 2nd tier cities and towns in terms of growth. As far as the National interest is concerned the shortsheeting of the NBN is the complete opposite. Even so they were allowed to bastardise that too without any accountability whatsoever. Australians need to start demanding political reform so these bastards are accountable to the people.Neoliberalism is just the academic name for the political ideology of greed, corruption, self interest, self entitlement, corporate welfare, inequality, user pays, and poverty is your fault.grumpyom , 4 Jun 2018 00:18
George Monbiot does it well too.
https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiotDo you see any contradiction between privatised electricity and socialised stadiums?Elizabeth Connor , 4 Jun 2018 00:10
Neoliberalism explains it all. Corruption in politics means that only profitable assets are privatised. Stadiums lose money, so are kept in private hands as corporate welfare for the various billionaire team owners and TV networks.I love Richard Denniss! What a brilliantly concise and yet well supported argument. Now we just need someone who can say it in terms that will persuade unwilling voters to think carefully about their vote. If they do think carefully they simply cannot return this government to power, now that they're all revealed as nothing but crony capitalists.sierrasierra -> telbraithwaite , 4 Jun 2018 00:04
I must admit that like many people I also thought neoliberalism was an ideology, but then I couldn't understand why they were so inconsistent in their spending of 'tax-payers' funds'.
From now on I'll be pointing out those inconsistencies with more confidence - armed with Richard's incontrovertible points, and also by a closer reading of Canadian Kean Birch's article:
Here's Birch's definition of neoliberalism:
[The term neoliberalism ] is used to refer to an economic system in which the "free" market is extended to every part of our public and personal worlds.
And here's wikipedia's definition of crony capitalism:
Crony capitalism is an economy in which businesses thrive not as a result of risks they take, but rather as a return on money amassed through a nexus between a business class and the political class.
NB But there's a more explicit definition here, which I like much better:
Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism.
And from where I sit, crony capitalism cannot be defended by anyone with any kind of integrity.Yes, we have a spot of bother, and I think that their name - Institute of Public Affairs - is quite a misnomer.Billyswagg , 4 Jun 2018 00:03
The way these people operate is more akin to Opus Dei and many other 'secret societies' that have another public face altogether.
Given that IPA's agenda is a private members wish list which has a huge impact on matters of a broad public nature, it's rather akin to incest, and we know where the confusion between Church and State takes us regarding separation of powers, exactly where we are right now .two Royal Commissions that are joined at the hip, Institutional Responses to Child Sexual Abuse (2013 – 2017) and our current horror show Misconduct in the Banking, Superannuation, and Financial Services Industry which could for all intents and purposes be as long as aforementioned.
Stay with me, as these are issues that relate to other 'energy' systems, namely money, sex and power, and if we have any doubts as to how far this cancer has spread, a quick purview of the following members ought to resolve it for you:
For the 70th Birthday big bash, we know that guests to the party were:
• Gina Rinehart
• Rupert Murdoch
• Tony Abbott
• George Pell - Australian Cardinal of the Roman Catholic Church
• Michael Kroger - President of the Victorian division of the Liberal Party of Australia and former director of the IPA
• Mitch Fifield - Communications Minister
Think horizontal and vertical industries/associations and you begin to get the picture, and that's before thinking about BCA and VECCI.First, elect the other mob next time around. They're in the pockets of the multinationals and the US alliance as well, but they're not quite as bad, yet. The next thing is a full-on assault on mainstream media. The frontline of the revolution, if there is to be one, is the media. No more guns or territorial claims, it's a battle for the mind. Education is the key. The "Neolibs" attack education at every opportunity - teachers, curriculum, funding etc. etc. but there's nothing wrong with education - the real problem is that the mainstream media relentlessly, all day every day works to an agenda of dis-education, deliberately undermining and destroying the work of our schools. They preach doubt and mistrust - of learning, facts, truth, intelligence, pure science, art, music, culture, thoughtfulness, forbearance, empathy and altruism. They teach us to monetise and gamble on everything. Their aim is to dumb everyone down to the point where not only can't they read an analog clock or drive their own car but become entirely dependent on the word of authority (of which they are the mouthpiece) for a continued existence. Today, with our vast social platforms we can target their lies and threats, one by one. Pick each one, attack it, viciously, loudly, risibly, with facts, comedy, derision and invitations to dance. Spread it wide. Call them out at every opportunity. Sneer them into oblivion. Mainstream media is the primary problem. That's what must be destroyed.Dunkey2830 -> Dave Bradley , 3 Jun 2018 23:53BiggerPictureCait -> Stopthelibs , 3 Jun 2018 23:53
Maybe the ALP have learnt from their mistakes
No, regrettably they have not.
The neoliberalist 'mistake' has been going on for around 40 yrs now - it has proved a relentless descent into inequality and austerity.
Chris Bowen at the National Press Club :
"...Labor will go to the next election:
Achieving budget balance in the same year as the government;
Delivering bigger cumulative budget surpluses over forward estimates as well as substantially bigger surpluses over the ten year medium term; and
That the majority of savings raised from our revenue measures over the medium term will go towards budget repair and paying down debt...."
Pure neoliberal economic poison that will create further hardship for our citizens, worsen inequality and recess the economy yet further.
People have got to come to understand that the bigger surpluses Bowen speaks of are federal tax collection surpluses; i.e. he intends to withdraw further spending capacity from the private sector, all while the current account deficit already draws 3.5% GDP (~$30bn) a yr from that same heavily indebted private sector.
This Bowen statement report from the SMH :
"The whiff of a surplus, not reaching at least 1 per cent of GDP until 2026-27, does not adequately protect Australia against the potential roiling seas of international uncertainty," he will say.
"Australia needs bigger surpluses, sooner than the government is scheduling.
"We can't afford to let the next four years go to waste in the efforts for a healthier, safer budget surplus."
Absolute macroeconomic stupidity, arrogant, vandalous ideological madness.
When will the people come to their senses and stop supporting such socially destructive errant neoliberal economic alchemy?Just look at the Citizens Assembly overseeing the law change in the recent Irish referendum. Worked a treat, cause those involved wanted to find the bvest alternative, rather than feather their own nest.
Dec 27, 2018 | discussion.theguardian.com
jclucas , 3 Jun 2018 23:25It is indeed important to make the distinction between the ideology of neoliberalism - the ideology of private enterprise is good, and public spending is bad - and the operational system of crony capitalism - the game of mates played by government and the special interests.
And it is certainly equally important to call out the monumental hypocrisy involved in the government's application of the ideology's set of rules to the powerless and public and the government's application of corrupt practice rules to the special interests.
The system is destroying the egalitarian character of Australia and fanning the flames of nativist authoritarianism here.
But what's even more dangerous is the fundamental dishonesty that the system necessitates, and the alienating influence it has - on top of the growing economic inequality.
The system has destroyed the economic and environmental viability and sustainability of the planet on which human civilization depends.
What is becoming increasingly clear to more and more of the public is that - simple put- the system cannot be allowed to go on as it has been proceeding because it threatens the future of civilization on earth.
Change is imperative now. However, how that will unfold is unclear, as well as, the toll the destruc5turing system will take.
What is clear is that a great restructuring must happen - and soon.
Dec 09, 2018 | en.wikipedia.org
[Video] Interview with Kate Bowler on Blessed: A History of the American Prosperity Gospel , March 18, 2014 , C-SPAN
According to historian Kate Bowler , the prosperity gospel was formed from the intersection of three different ideologies: Pentecostalism , New Thought , and "an American gospel of pragmatism, individualism, and upward mobility".  This "American gospel" was best exemplified by Andrew Carnegie 's Gospel of Wealth and Russell Conwell 's famous sermon "Acres of Diamonds", in which Conwell equated poverty with sin and asserted that anyone could become rich through hard work. This gospel of wealth, however, was an expression of Muscular Christianity and understood success to be the result of personal effort rather than divine intervention. 
... ... ...
In 2005, Matthew Ashimolowo , the founder of the largely African Kingsway International Christian Centre in southern England, which preaches a "health and wealth" gospel and collects regular tithes, was ordered by the Charity Commission to repay money he had appropriated for his personal use. In 2017, the organisation was under criminal investigation after a leading member was found by a court in 2015 to have operated a Ponzi scheme between 2007 and 2011, losing or spending £8 million of investors' money. 
... ... ...
The inauguration of Donald Trump as the 45th President of the United States featured prayers from two preachers known for advocating prosperity theology.  Paula White , one of Trump's spiritual advisers, gave the invocation. 
... ... ...
36] Hanna Rosin of The Atlantic argues that prosperity theology contributed to the housing bubble that caused the late-2000s financial crisis . She maintains that home ownership was heavily emphasized in prosperity churches, based on reliance on divine financial intervention that led to unwise choices based on actual financial ability. 
... ... ...
Historian Carter Lindberg of Boston University has drawn parallels between contemporary prosperity theology and the medieval indulgence trade .  Coleman notes that several pre–20th century Christian movements in the United States taught that a holy lifestyle was a path to prosperity and that God-ordained hard work would bring blessing. 
... ... ...In April 2015, LDS apostle Dallin H. Oaks stated that people who believe in "the theology of prosperity" are deceived by riches. He continued by saying that the "possession of wealth or significant income is not a mark of heavenly favor, and their absence is not evidence of heavenly disfavor". He also cited how Jesus differentiated the attitudes towards money held by the young rich man in Mark 10:17–24, the good Samaritan, and Judas Iscariot in his betrayal. Oaks concluded this portion of his sermon by highlighting that the "root of all evil is not money but the love of money". 
In 2015, well known pastor and prosperity gospel advocate Creflo Dollar launched a fundraising campaign to replace a previous private jet with a $65 million Gulfstream G650.  On the August 16, 2015 episode of his HBO weekly series Last Week Tonight , John Oliver satirized prosperity theology by announcing that he had established his own tax-exempt church, called Our Lady of Perpetual Exemption . In a lengthy segment, Oliver focused on what he characterized as the predatory conduct of televangelists who appeal for repeated gifts from people in financial distress or personal crises, and he criticized the very loose requirements for entities to obtain tax exempt status as churches under U.S. tax law. Oliver said that he would ultimately donate any money collected by the church to Doctors Without Borders . 
In July 2018, Antonio Spadaro and Marcelo Figueroa, in the Jesuit journal La Civilità Cattolica , examined the origins of the prosperity gospel in the United States and described it as a reductive version of the American Dream which had offered opportunities of success and prosperity unreachable in the Old World . The authors distinguished the prosperity gospel from Max Weber 's Protestant ethic , noting that the protestant ethic related prosperity to religiously inspired austerity while the prosperity gospel saw prosperity as the simple result of personal faith. They criticized many aspects of the prosperity gospel, noting particularly the tendency of believers to lack compassion for the poor, since their poverty was seen as a sign that they had not followed the rules and therefore are not loved by God .  
Jun 08, 2013 | www.theguardian.com
The crash was a write-off, not a repair job. The response should be a wholesale reevaluation of the way in which wealth is created and distributed around the globe
he IMF's limited admission of guilt over the Greek bailout is a start, but they still can't see the global financial system's fundamental flaws, writes Deborah Orr.
The International Monetary Fund has admitted that some of the decisions it made in the wake of the 2007-2008 financial crisis were wrong, and that the €130bn first bailout of Greece was "bungled". Well, yes. If it hadn't been a mistake, then it would have been the only bailout and everyone in Greece would have lived happily ever after.
Actually, the IMF hasn't quite admitted that it messed things up. It has said instead that it went along with its partners in "the Troika" – the European Commission and the European Central Bank – when it shouldn't have. The EC and the ECB, says the IMF, put the interests of the Eurozone before the interests of Greece. The EC and the ECB, in turn, clutch their pearls and splutter with horror that they could be accused of something so petty as self-preservation.
The IMF also admits that it "underestimated" the effect austerity would have on Greece. Obviously, the rest of the Troika takes no issue with that. Even those who substitute "kick up the arse to all the lazy scroungers" whenever they encounter the word "austerity", have cottoned on to the fact that the word can only be intoned with facial features locked into a suitably tragic mask.
Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it's still a sign that financial institutions may slowly be coming round to the idea that they are the problem. They know the crash was a debt-bubble that burst. What they don't seem to acknowledge is that the merry days of reckless lending are never going to return; even if they do, the same thing will happen again, but more quickly and more savagely. The thing is this: the crash was a write-off, not a repair job. The response from the start should have been a wholesale reevaluation of the way in which wealth is created and distributed around the globe, a "structural adjustment", as the philosopher John Gray has said all along.
The IMF exists to lend money to governments, so it's comic that it wags its finger at governments that run up debt. And, of course, its loans famously come with strings attached: adopt a free-market economy, or strengthen the one you have, kissing goodbye to the Big State.
Yet, the irony is painful. Neoliberal ideology insists that states are too big and cumbersome, too centralized and faceless, to be efficient and responsive. I agree.
The problem is that the ruthless sentimentalists of neoliberalism like to tell themselves – and anyone else who will listen – that removing the dead hand of state control frees the individual citizen to be entrepreneurial and productive. Instead, it places the financially powerful beyond any state, in an international elite that makes its own rules, and holds governments to ransom. That's what the financial crisis was all about. The ransom was paid, and as a result, governments have been obliged to limit their activities yet further – some setting about the task with greater relish than others. Now the task, supposedly, is to get the free market up and running again.
But the basic problem is this: it costs a lot of money to cultivate a market – a group of consumers – and the more sophisticated the market is, the more expensive it is to cultivate them. A developed market needs to be populated with educated, healthy, cultured, law-abiding and financially secure people – people who expect to be well paid themselves, having been brought up believing in material aspiration, as consumers need to be.
So why, exactly, given the huge amount of investment needed to create such a market, should access to it then be "free"? The neoliberal idea is that the cultivation itself should be conducted privately as well. They see "austerity" as a way of forcing that agenda. But how can the privatization of societal welfare possibly happen when unemployment is already high, working people are turning to food banks to survive and the debt industry, far from being sorry that it brought the global economy to its knees, is snapping up bargains in the form of busted high-street businesses to establish shops with nothing to sell but high-interest debt? Why, you have to ask yourself, is this vast implausibility, this sheer un-sustainability, not blindingly obvious to all?
Markets cannot be free. Markets have to be nurtured. They have to be invested in. Markets have to be grown. Google, Amazon and Apple haven't taught anyone in this country to read. But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can, because they are more powerful than governments.
And further, those who invest in these companies, and insist that taxes should be low to encourage private profit and shareholder value, then lend governments the money they need to create these populations of sophisticated producers and consumers, berating them for their profligacy as they do so. It's all utterly, completely, crazy.
The other day a health minister, Anna Soubry , suggested that female GPs who worked part-time so that they could bring up families were putting the NHS under strain. The compartmentalised thinking is quite breathtaking. What on earth does she imagine? That it would be better for the economy if they all left school at 16? On the contrary, the more people who are earning good money while working part-time – thus having the leisure to consume – the better. No doubt these female GPs are sustaining both the pharmaceutical industry and the arts and media, both sectors that Britain does well in.
As for their prioritising of family life over career – that's just another of the myriad ways in which Conservative neoliberalism is entirely without logic. Its prophets and its disciples will happily – ecstatically – tell you that there's nothing more important than family, unless you're a family doctor spending some of your time caring for your own. You couldn't make these characters up. It is certainly true that women with children find it more easy to find part-time employment in the public sector. But that's a prima facie example of how unresponsive the private sector is to human and societal need, not – as it is so often presented – evidence that the public sector is congenitally disabled.
Much of the healthy economic growth – as opposed to the smoke and mirrors of many aspects of financial services – that Britain enjoyed during the second half of the 20th century was due to women swelling the educated workforce. Soubry and her ilk, above all else, forget that people have multiple roles, as consumers, as producers, as citizens and as family members. All of those things have to be nurtured and invested in to make a market.
The neoliberalism that the IMF still preaches pays no account to any of this. It insists that the provision of work alone is enough of an invisible hand to sustain a market. Yet even Adam Smith, the economist who came up with that theory , did not agree that economic activity alone was enough to keep humans decent and civilised.
Governments are left with the bill when neoliberals demand access to markets that they refuse to invest in making. Their refusal allows them to rail against the Big State while producing the conditions that make it necessary. And even as the results of their folly become ever more plain to see, they are grudging in their admittance of the slightest blame, bickering with their allies instead of waking up, smelling the coffee and realising that far too much of it is sold through Starbucks.
Dec 03, 2018 | discussion.theguardian.com
OneCommentator -> dmckm , 8 Jun 2013 13:03@dmckm - Nobody is owed a good living in this world. That's what freedom means: one is free to chose the best way to make a living. Are you saying that by forcing people to pay you something they don't want to is freedom?
Dec 03, 2018 | discussion.theguardian.com
Stonk , 8 Jun 2013 08:18No market is 'Free'. Free markets do not exist. Markets are there for those with a vested interest. i.e. the banksters. Note the growth of Hedge funds or slush funds for the rich.
Dec 03, 2018 | discussion.theguardian.com
LiberteEgalite1 -> taxhaven , 8 Jun 2013 13:31@taxhaven - I love this "free markets" expression, but can we really have free markets please then? This means that no taxpayer money is to be spent to bail out the capitalist bankers when things so sour.PointOfYou , 8 Jun 2013 13:37
It also means that there is completely free movement of labor so I as an employer should be able to hire anyone I like for your job and pay the wage that the replacement is willing to take i.e. tough luck to you if the person is more qualified and is willing to work for less but does not have the work visa because in free markets there will be no such things as work permits.TedSmithAndSon -> taxhaven , 8 Jun 2013 13:25
Neoliberalism has spawned a financial elite who hold governments to ransom
Neoliberalism? This is not just a financial agenda. This a highly organized multi armed counterculture operation to force us, including Ms Orr [unless she has...connections] into what Terence McKenna [who was in on it] termed the `Archaic Revival'. That is - you and me [and Ms Orr] - our - return to the medieval dark ages, if we indeed survive that far.
The same names come up time and time again. One of them being, father of propaganda, Edward Bernays.
Bernays wrote what can be seen as a virtual Mission Statement for anyone wishing to bring about a "counterculture." In the opening paragraph of his book Propaganda he wrote:
".. The conscious and intelligent manipulation of the organised habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are moulded, our tastes formed, our ideas suggested, largely by men we have never heard of.
This is a logical result of the way in which our democratic society is organised. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses.
It is they who pull the wires which control the public mind..."
Bernays' family background made him well suited to "control the public mind." He was the double nephew of psychoanalysis pioneer Sigmund Freud. His mother was Freud's sister Anna, and his father was Ely Bernays, brother of Freud's wife Martha Bernays.@taxhaven -And if we ever had that, would it make the ideal society?
about being permitted to engage in voluntary exchange of goods and services with others, unmolested.
A free market larger than a boot fair has never existed. A market can never have power, it's just a market after all. It's the people in the market that have power... or some of them... the few... have it disproportionately compared to others, and straight away the market isn't free.
It's only even approximately free when properly regulated, but that's anathema to market fundamentalists so they end up with a market run for the benefit of vested interests that they will claim is "free" until their dying breath.
Power belongs with democratically elected governments, not people in markets responsible only to themselves. Amazing that people still think as you do after all that's happened.
Nov 25, 2018 | caucus99percent.com
What else is amazing about her emails @leveymg
is how no one really talked about their content, eh? We learned that she rigged the primary against Bernie and then everyone started talking about Russia ! Just as she and Podesta wanted.
up 8 users have voted. --
Amazing how elusive they are (scrubbed from the State Dept website) and how they have never been picked up on by most of the corporate media.
Disclaimer: No Russian, living or dead, had anything to do with the posting of this proudly home-grown comment
Nov 20, 2018 | finance.yahoo.com
3 hours ago At one company I interviewed nine times. Figured if they have this difficult of a time making a decision I'll lose my mind working there and accepted a position elsewhere.
J 3 hours ago Google wasn't the only company with excessive reliance on the school and GPA for new hires. It was and might still be very common for technology companies to use this on the assumption that a high GPA in school means high performance in the real world. My former company had a 3.7 minimum GPA on a four point scale just to be considered for an interview. I would frequently get candidates from my manager to interview and evaluate. I found many of the high performers lacked the ability to generalize concepts and skills that could be used across a wide breadth of technologies. Instead they tended to apply a concept to a specific subject and learn/create skills that would only work in that one area. When it came time to move to development of newer technologies the skills they had learned would not transfer and they would start the learning process all over. After talking to a comp sci professor friend it made sense why this was happening. It has a lot to do with how schools compartmentalize their teaching. The tend to be lessons and labs teaching a single concept and nothing is done to teach the kids how to take that as a generalization that can be applied across many areas. Due to this I found I ended up with better coworkers with somewhat lower performing students as they appeared to be better at applying concepts in a broad manner and more.
F 3 hours ago An interview is not just about a company interviewing a prospective employee, but the employee interviewing the company. If you interview me more the 3 times, you're done. As a company you need to get your stuff together.
p 3 hours ago If some company needs more than 3 interviews to hire someone, then they are too indecisive, tedious and flaky to bother with.
Oct 30, 2018 | features.propublica.orgxn0 , Monday, April 2, 2018 1:44 PMThese practices are "interesting". And people still wonder why there are so many deadly amok runs at US companies? What do they expect when they replace old and experienced workers with inexperienced millenials, who often lack basic knowledge about their job? Better performance?nottigerwoods , Friday, March 30, 2018 1:39 PM
This will run US tech companies into the ground. This sort of "American" HR management is gaining ground here in Germany as well, its troubling. And on top they have to compete against foreign tech immigrants from middle eastern and asian companies. Sure fire recipe for social unrest and people voting for right-wing parties.I too was a victim of IBM's underhanded trickery to get rid of people...39 years with IBM, a top performer. I never got a letter telling me to move to Raleigh. All i got was a phone call asking me if i wanted to take the 6 month exception to consider it. Yet, after taking the 6 month exception, I was told I could no longer move, the colocation was closed. Either I find another job, not in Marketing support (not even Marketing) or leave the company. I received no letter from Ginni, nothing. I was under the impression I could show up in Raleigh after the exception period. Not so. It was never explained....After 3 months I will begin contracting with IBM. Not because I like them, because I need the money...thanks for the article.doncanard , Friday, March 30, 2018 1:33 PMdropped in 2013 after 22 years. IBM stopped leading in the late 1980's, afterwards it implemented "market driven quality" which meant listen for the latest trends, see what other people were doing, and then buy the competition or drive them out of business. "Innovation that matters": it's only interesting if an IBM manager can see a way to monetize it.
That's a low standard. It's OK, there are other places that are doing better. In fact, the best of the old experienced people went to work there. Newsflash: quality doesn't change with generations, you either create it or you don't.
Sounds like IBM is building its product portfolio to match its desired workforce. And of course, on every round of layoffs, the clear criterion was people who were compliant and pliable - who's ready to follow orders ? Best of luck.
Oct 30, 2018 | features.propublica.org
HiJinks , Sunday, March 25, 2018 3:07 AMI agree with many who state the report is well done. However, this crap started in the early 1990s. In the late 1980s, IBM offered decent packages to retirement eligible employees. For those close to retirement age, it was a great deal - 2 weeks pay for every year of service (capped at 26 years) plus being kept on to perform their old job for 6 months (while collecting retirement, until the government stepped in an put a halt to it). Nobody eligible was forced to take the package (at least not to general knowledge). The last decent package was in 1991 - similar, but not able to come back for 6 months.Chris S. HiJinks
However, in 1991, those offered the package were basically told take it or else. Anyone with 30 years of service or 15 years and 55 was eligible and anyone within 5 years of eligibility could "bridge" the difference.
They also had to sign a form stating they would not sue IBM in order to get up to a years pay - not taxable per IRS documents back then (but IBM took out the taxes anyway and the IRS refused to return - an employee group had hired lawyers to get the taxes back, a failed attempt which only enriched the lawyers).
After that, things went downhill and accelerated when Gerstner took over. After 1991, there were still a some workers who could get 30 years or more, but that was more the exception. I suspect the way the company has been run the past 25 years or so has the Watsons spinning in their graves. Gone are the 3 core beliefs - "Respect for the individual", "Service to the customer" and "Excellence must be a way of life".ArnieTracey , Saturday, March 24, 2018 7:15 PM
could be true... but i thought Watson was the IBM data analytics computer thingy... beat two human players at Jeopardy on live tv a year or two or so back.. featured on 60 Minutes just around last year.... :IBM's policy reminds me of the "If a citizen = 30 y.o., then mass execute such, else if they run then hunt and kill them one by one" social policy in the Michael York movie "Logan's Run."Jr Jr , Saturday, March 24, 2018 4:37 PM
From Wiki, in case you don't know: "It depicts a utopian future society on the surface, revealed as a dystopia where the population and the consumption of resources are maintained in equilibrium by killing everyone who reaches the age of 30. The story follows the actions of Logan 5, a "Sandman" who has terminated others who have attempted to escape death, and is now faced with termination himself."Corporate loyalty has been gone for 25 years. This isnt surprising. But this age discrimination is blatantly illegal.
Oct 24, 2018 | www.unz.com
Bankers, agro-business elites, commercial mega owners, manufacturing, real estate and insurance bosses and their financial advisers, elite members of the 'ruling class', have launched a full-scale attack on private and public wage and salary workers, and small and medium size entrepreneurs (the members of the 'popular classes'). The attack has targeted income ,pensions, medical plans, workplace conditions, job security, rents, mortgages, educational costs, taxation,undermining family and household cohesion.
Big business has weakened or abolished political and social organizations which challenge the distribution of income and profits and influence the rates of workplace output. In brief the ruling classes have intensified exploitation and oppression through the 'class struggle' from above.
We will proceed by identifying the means, methods and socio-political conditions which have advanced the class struggle from above and, conversely, reversed and weakened the class struggle from below.
The class struggle is the major determinant of the advances and regression of the interests of the capitalist class. Following the Second World War, the popular classes experienced steady advances in income, living standards, and work place representation. However by the last decade of the 20 th century the balance of power between the ruling and popular classes began to shift, as a new 'neo-liberal' development paradigm became prevalent.
First and foremost, the state ceased to negotiate and conciliate relations between rulers and the working class: the [neoliberal] state concentrated on de-regulating the economy, reducing corporate taxes, and eliminating labor's role in politics and the division of profits and income.
The concentration of state power and income was not uncontested and was not uniform in all regions and countries. Moreover, counter-cyclical trends, reflecting shifts in the balance of the class struggle precluded a linear process. In Europe, the Nordic and Western European countries' ruling classes advanced privatization of public enterprises, reduced social welfare costs and benefits, and pillaged overseas resources but were unable to break the state funded welfare system. In Latin America the advance and regression of the power, income and welfare of the popular class, correlated with the outcome of the class and state struggle.
The United States witnessed the ruling class take full control of the state, the workplace and distribution of social expenditures.
In brief, by the end of the 20 th century, the ruling class advanced in assuming a dominant role in the class struggle.
Nevertheless, the class struggle from below retained its presence, and in some places, namely in Latin America, the popular classes were able to secure a share of state power – at least temporarily.
Popular Power: Contesting the Class Struggle from Above
Latin America is a prime example of the uneven trajectory of the class struggle.
Between the end of World War Two and the late 1940's, the popular classes were able to secure democratic rights, populist reforms and social organization. Guatemala, Argentina, Uruguay, Brazil, Mexico, Venezuela were among the leading examples. By the early 1950's with the onset of the US imperialist 'cold war', in collaboration with the regional ruling classes launched a violent class war from above, which took the form of military coups in Guatemala, Peru, Argentina, Venezuela and Brazil. The populist class struggle was defeated by the US backed military- business rulers who, temporarily imposed US agro-mineral export economies.
The 1950's were the 'golden epoch' for the advance of US multi-nationals and Pentagon designed regional military alliances. But the class struggle from below rose again and found expression in the growth of a progressive national populist industrializing coalition, and the successful Cuban socialist regime and its followers in revolutionary social movements in the rest of Latin America throughout the 1960's.
The revolutionary popular class insurgency of the early 1960's was countered by the ruling class seizure of power backed by military-US led coups between 1964-1976 which demolished the regimes and institutions of the popular classes in Brazil (1964), Bolivia (1970), Chile (1973), Argentina (1976) , Peru (1973) and elsewhere.
Economic crises of the early 1980s reduced the role of the military and led to a 'negotiated transition' in which the ruling class advanced a neo-liberal agenda in exchange for electoral participation under military and US tutelage.
Lacking direct military rule, the ruling class struggle succeeded in muting the popular class struggle by co-opting the center-left political elites. The ruling class did not or could not establish hegemony over the popular classes even as they proceeded with their neo-liberal agenda.
With the advent of the 21 st century a new cycle in the class struggle from below burst forth. Three events intersected: the global crises of 2000 triggered regional financial crashes, which in turn led to a collapse of industries and mass unemployment, which intensified mass direct action and the ouster of the neo-liberal regimes. Throughout the first decade of the 21 st century, neo-liberalism was in retreat. The popular class struggle and the rise of social movements displaced the neo-liberal regimes but was incapable of replacing the ruling classes. Instead hybrid center-left electoral regimes took power.
The new power configuration incorporated popular social movements, center-left parties and neo-liberal business elites. Over the next decade the cross-class alliance advanced largely because of the commodity boom which financed welfare programs, increased employment, implemented poverty reduction programs and expanded investments in infrastructure. Post-neoliberal regimes co-opted the leaders of the popular classes, replaced ruling class political elites but did not displace the strategic structural positions of the business ruling class..
The upsurge of the popular class struggle was contained and confined by the center-left political elite, while the ruling class marked time, making business deals to secure lucrative state contracts via bribes to the ruling center-left allied with the conservative political elite .
The end of the commodity boom, forced the center-left to curtail its social welfare and infrastructure programs and fractured the alliance between big business leaders and center-left political elites. The ensuing economic recession facilitated the return of the neo-liberal political elite to power.
The big business ruling class learned their lessons from their previous experience with weak and conciliating neo-liberal regimes. They sought authoritarian and, if possible rabble rousing political leaders, who could dismantle the popular organizations, and gutted popular welfare programs and democratic institutions, which previously blocked the consolidation of the neo-liberal New Order.
... ... ...
Renoman , says: October 26, 2018 at 6:38 pm GMTThe strait up truth!A Bit Sandy , says: October 26, 2018 at 10:25 pm GMTTimeTraveller , says: October 27, 2018 at 6:02 am GMT"The rightist rhetoric turns against itself as its followers engage in invidious distinctions ."
Interesting. You don't see Veblen's "invidious distinction" trotted out very often these days which is a pity. More the pity that it is misused in quote above. It's probably uncharitable to take cheap shots at the article, which is a beautiful, anti-fa inspired, fairytale history of the modern age. I just wish more care would be used for Marxist and non-marxist socialist phrases such as "class struggle" and "invidious distinction" because it impossible to detest them adequately when they are improperly deployed.
The term "invidious distinction" was coined by Thornstein Veblen in his seminal "The Theory of the Leisure Class", in which Veblen argues that one of the primary human motivations is to evoke envy in our fellows. Veblen thought that because all value is subjective/arbitrary, it's quite reasonable to assume that the most efficient value signal is that which creates the most envy in other men. A man's social standing is therefore efficiently established by status symbols that invoke envy such as a Rolex or a Mercedes. The peculiar consequence of this is that often, men desire a thing like a Rolex because other men want one, even up to the point when the object lacks any utility whatsoever other than signaling wealth, which itself is defined as having things that others want. Invidious distinction is therefore best evidenced through conspicuous consumption, however nearly all actions that do not have subsistence as their aim are undertaken to gain social standing or signal social standing by invoking envy.
Thus the quote above could be rewritten to be "The rightist rhetoric turns against itself as its followers engage in non-subsistence activities" which is kind of dumb. If the author is prognosticating that the authoritarian new order will turn on itself, it'd be nice to know have a more substantive explanation than "non-subsistence activities". Moreover, if the authoritarian new order is to shed it's "shock troops" in exchange for "meritocrats" it'd be nice to know why. That's my 2 cents, but I'm curious to know what others think of this curious tale!jilles dykstra , says: October 27, 2018 at 6:41 am GMT
The corruption of upwardly mobile middle-class rabble rousers will disillusion their voluntary followers. Arbitrary police and military repression usually extends to extortion and intimidation beyond the drug slums to the middle and working-class neighborhoods.
Also, the rise of AI, data mining, and complex algorithms, as well as the proliferation of electronic devices that record and analyze our private spaces is a pillar of the new order. Essentially, we are being watched by machines.
People need to reject the material order. Spiritual awakening is the key.
Revolutionaries will find new ways to defeat these technology-based tactics. Dogwhistling, communication on a personal level (rather than by mass media or the internet), and old-fashioned tribalism should help. Also, leaderless resistance can play a role. Weaknesses will be found in the crumbling edifice, and many hands can chisel separately.
Infiltration and sabotage can also be applied.
Possibly unrelated, but maybe thought-provoking:
Consider the man they just arrested for the mail bomb scare. Reportedly, this person was a career criminal with drug dealing and grand theft on his record and he was caught in possession of a white van with decals on it depicting his targets. This man is a caricature of a Trump supporter, ready-made for the cable news broadcast. Does anyone else see the absurdity of it? Can this guy be for real?
The authoritarian New Order usually begins to decline through 'internal rot' – uber- profiteering and flagrant abuse of work.anon  Disclaimer , says: October 27, 2018 at 8:35 am GMT" However sustaining their advance is conditional on dynamic economic growth "
You cannot fool all people all the time. Our Dutch Rutte governments now for some ten years have told us that the economy is growing, alas the average Dutchman by now knows that 'there are lies, big lies, and statistics', in other words, it may well be that the economy is growing, but the average Dutchman does not see his buying power increased.
On the contrary, those that work have a more or less constant buying power, those that do not work, for whatever reason: cannot find a job, permanent illness, retired, see quite well how their material position deteriorates steadily.a better title for this article might have been " what's wrong with everything for dummies" ?Anon  Disclaimer , says: October 27, 2018 at 9:12 am GMTThe alliance of big globalized business and big Governments is an unbearable burden for most of the populations. Since the 70`s you have to work more and more and to study more and more for less and lessjim jones , says: October 27, 2018 at 10:42 am GMT
I foresee that if this continue in the next 20 years millions and millions of people will die of marginalization, of hunger , misery and grief .The Fake Left (clinton neoliberals) have abandoned the Working Class and embraced identity politics.Ilyana_Rozumova , says: October 27, 2018 at 11:06 am GMTThis is the most important problem governments, and in the wider sense humanity is encountering. The pendulum is incessantly swinging from center to right and than reverses from right to left.Jeff Stryker , says: October 27, 2018 at 11:07 am GMT
Marx theories are totally one sided and do not solve anything. Extreme swing to the left brought at start enthusiasm of the working classes and for certain time progress of the humanity was phenomenal. But in time the progress did stop and population become lethargic and progress become stagnation leading to depression. Similar thing happens when pendulum is swinging to the right.
Eventually the purchasing power of the population diminishes to the size when crisis of the system is inevitable. Most important task of the governments is to control the economy that the extent of the swings are small as possible.@Anon Things seem to have improved in Asia since I first went abroad in 2000. In the US, on the other hand, life seems to have gotten more and more difficult.Jeff Stryker , says: October 27, 2018 at 11:09 am GMT
If you had told me in 1993 when I left home that Gen Y of age 30 would live at home and that entire families of white people would be homeless or that MBA's would have to work in Bistros at age 25 I would have said you're crazed.
The odd thing in the US is that it is the middle-class seems to have gotten hit the worst. The white underclass and blacks have always had it hard and poor. Much of the time they deserve it because they have babies at 19 and don't go to college. But the destruction of the middle-class whites is quite phenomenal.@Anon UNBEARABLEjacques sheete , says: October 27, 2018 at 12:32 pm GMT
It is unbearable for the middle-class. The underclass does not care. Big governments tend to be corrupt, so money talks. If you live in the ghetto or the trailer park you have no expectations anyhow. You were not going to be a great citizen anyhow. But for the middle-class things will be shocking.@Anonjacques sheete , says: October 27, 2018 at 12:44 pm GMT
but will a new popular class struggle emerge?
I doubt that such a thing ever occurred to any substantial degree. "Popular" class struggles need to be seen for what they are; temporary expedients whereby one set of rulers uses the populace for their own ends and against their competitors.
Too many people get suckered into supporting "popular" movements and sometimes do gain temporary benefits, but when their handlers get what they want, the fun and games are over. The author noted the concept, saying,
Between the end of World War Two and the late 1940's, the popular classes were able to secure democratic rights, populist reforms and social organization. [but then began] bullying of traditional allies
... ... ...@Jeff StrykerRespect , says: October 27, 2018 at 12:45 pm GMT
But for the middle-class things will be shocking.
No "will be" about it. You noted it in your comment #10 and my observations agree,
But the destruction of the middle-class whites is quite phenomenal.
The assault on the middle class has been taking place for decades and many people have been feeling it although most apparently still hope for some Messiah, and many of them apparently think either Hillaryena or the Trumpster was it. Where they get their faith I'll never know.@jilles dykstra Same thing in Spain, and in most of western Europe I would say . The macroeconomy is going well for the chosen ones , and the microeconomy is going very bad for most of the population .jacques sheete , says: October 27, 2018 at 12:58 pm GMT@Jeff StrykerJackOH , says: October 27, 2018 at 1:09 pm GMT
Much of the time they deserve it because they don't go to college.
Schooling in the USA for some time been nothing more than babysitting and brainwashing and that's by design. Completing college nowadays is mainly for immature, dependent losers especially since many of them will be burdened with a non-marketable degree and debt for decades and in any case, the majority will wind up as wage slaves anyway. The way to go now is to learn a trade, especially one that a person can practice independently and with low capital, and get to work, but the window for even that seems to be fast closing too.
If one has the talent (rare) sales can still be a good road to relative independence with no "collitch" needed.@Jeff Stryker "If you live in the ghetto or the trailer park you have no expectations anyhow. You were not going to be a great citizen anyhow."Jeff Stryker , says: October 27, 2018 at 1:17 pm GMT
"But for the middle-class things will be shocking."
Spot on, Jeff. I see remnants of the onetime middle class around me. People with a degree or advanced degree, people with identifiable special skills (accountancy, engineering) who guard their expertise as would a 15th century guild worker, people with decent table manners...
Then their Fortune 500 company kicks them out of their corporate featherbed, they spend a year or two or more discovering their specialized skills are worth half of what they'd thought, and when they land a job, they're expected to cook the books or sign off on dodgy products, acting as designated corporate fall guys in the event of an investigation.@jacques sheeteWizard of Oz , says: October 27, 2018 at 1:24 pm GMT
When I was in university there was no Leftist programming. People were there to become engineers, IT specialists, doctors, nurses, businessmen, accounting. You maybe had to take an "African-American studies" course but that was just to get enough credits to graduate. Also, by the time most people went to college (when I did from 93-98) they were adults with opinions. Sales is a diminishing field now with the internet.@jim jones A shrewd observation is my immediate reaction. Most likely true of the organised institutional left which, when it's old product no longer sells doesn't want to declare bankruptcy and shut up shop.Anon  Disclaimer , says: October 27, 2018 at 2:47 pm GMT"Government exists to spend. The purpose of government is to serve the general welfare of the citizens, not just the military-industrial complex and the financial class. Didn't we have a stimulus, oh, eight years ago? It was tiny and has not been entirely spent. As Yellen implied, we need more spending of the non-military kind (what Barney Frank memorably called "weaponized Keynesianism" doesn't stimulate)."jacques sheete , says: October 27, 2018 at 3:05 pm GMT
This is what has been missing for over 40 years in the US, government's role in the economy. When any politician brings up the fact that it's time we used fiscal policy as it was designed, neoliberals have a socialism meltdown. Both parties have been taken over by the Kochtopus, The libertarian fascist ideology that hides behind the term "neoliberalism". The ultimate goal of this zombie ideology that was thoroughly discredited in 2008 but continues to roam the earth is to replace nations with privately owned cities. This experiment was going on in Honduras, following the 2009 coup, until it was finally ended by a SC ruling that it was unconstitutional.
"In a libertarian society, there is no commons or public space. There are property lines, not borders. When it comes to real property and physical movement across such real property, there are owners, guests, licensees, business invitees and trespassers – not legal and illegal immigrants." ~ Jeff Deist, president of the Mises Institute
This is the struggle – the struggle to maintain public space on a planet that was never meant to be owned in the first place.@Respect
The macroeconomy is going well for the chosen ones , and the microeconomy is going very bad for most of the population .
As always. Whenever someone makes a broad comment about "the" economy, I begin to yawn. The distinction you make is a critical one.
Sep 22, 2018 | www.moonofalabama.org
bevin , Sep 22, 2018 7:08:38 PM | link
"All the leading economic indicators are great to healthy ... Homelessness is worse than I have ever seen but I do not see any Latino or Asian homeless people. It is nearly 100% white or African Americans. Most appear to be drugged out losers."
A perfect example of what b meant when he said that the only people suffering are the poor. Meaning that nobody cares about them and, often because they are prevented from doing so, they rarely vote. And when they do vote there aren't any candidates to vote for.
The last sentence just about sums neo-liberals up: most of the homeless are informed, are 'drugged out losers.'
So that's OK is it? Ever wonder why they are drugged out? Or what the rules were in the game they lost?
Aug 09, 2018 | www.goodreads.com
"As these contrasts show, capitalism has undergone enormous changes in the last two and a half centuries. While some of Smith's basic principles remain valid, they do so only at very general levels.
For example, competition among profit-seeking firms may still be the key driving force of capitalism, as in Smith's scheme.
But it is not between small, anonymous firms which, accepting consumer tastes, fight it out by increasing the efficiency in the use of given technology.
Today, competition is among huge multinational companies, with the ability not only to influence prices but to redefine technologies in a short span of time (think about the battle between Apple and Samsung) and to manipulate consumer tastes through brand-image building and advertising."
Aug 05, 2018 | www.unz.com
UnzReader , August 3, 2018 at 2:31 am GMT@AaronB
AaronB, your observations are always insightful and interesting. I wonder if you believe in freewill at all, even in "insignificant" matters because time and sequence are all important and such trivial events set up the really big ones in our lives.
"Human beings, in their thinking, feeling and acting are not free but as causally bound as the stars in their motions." – Albert Einstein.
I look forward to your response.
Jul 26, 2018 | www.nakedcapitalism.com
By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website
It wasn't supposed to be like this.
The children of America's white-collar middle class viewed life from their green lawns and tidy urban flats as a field of opportunity. Blessed with quality schools, seaside vacations and sleepover camp, they just knew that the American dream was theirs for the taking if they hit the books, picked a thoughtful and fulfilling career, and just, well, showed up.
Until it wasn't.
While they were playing Twister and imagining a bright future, someone apparently decided that they didn't really matter. Clouds began to gather -- a "dark shimmer of constantly shifting precariousness," as journalist Alissa Quart describes in her timely new book " Squeezed: Why Our Families Can't Afford America ."
The things these kids considered their birthright -- reputable colleges, secure careers, and attractive residences -- were no longer waiting for them in adulthood.
Today, with their incomes flat or falling, these Americans scramble to maintain a semblance of what their parents enjoyed. They are moving from being dominant to being dominated. From acting to acted upon. Trained to be educators, lawyers, librarians, and accountants, they do work they can't stand to support families they rarely see. Petrified of being pushed aside by robots, they rankle to see financial titans and tech gurus flaunting their obscene wealth at every turn.
Headlines gush of a humming economy, but it doesn't feel like a party to them -- and they've seen enough to know who will be holding the bag when the next bubble bursts.
The "Middle Precariats," as Quart terms them, are suffering death by a thousand degradations. Their new reality: You will not do as well as your parents . Life is a struggle to keep up. Even if you achieve something, you will live in fear of losing it. America is not your land: it belongs to the ultra-rich.
Much of Quart's book highlights the mirror image of the downwardly mobile middle class Trump voters from economically strained regions like the Midwest who helped throw a monkey wrench into politics-as-usual. In her tour of American frustration, she talks to urbanites who lean liberal and didn't expect to find themselves drowning in debt and disappointment. Like the falling-behind Trump voters, these people sense their status ripped away, their hopes dashed.
If climbing up the ladder of success is the great American story, slipping down it is the quintessential tragedy. It's hard not to take it personally: the ranks of the Middle Precariat are filled with shame.
They are somebodies turning into nobodies.
And there signs that they are starting to revolt. If they do, they could make their own mark on the country's political landscape.
The Broken Bourgeoisie
Quart's book takes a sobering look at the newly unstable bourgeoisie, illustrating what happens when America's off-the-rails inequality blasts over those who always believed they would end up winners.
There's the Virginia accountant who forks over nearly 90% of her take home pay on care for her three kids; the Chicago adjunct professor with the disabled child who makes less than $24,000 a year; and the California business reporter who once focused on the financial hardships of others and now faces unemployment herself.
There are Uber-driving teachers and law school grads reviewing documents for $20 an hour -- or less. Ivy Leaguers who live on food stamps.
Lacking unions, church communities and nearby close relatives to support them, the Middle Precariats are isolated and stranded. Their labor has sputtered into sporadic contingency: they make do with short-term contracts or shift work. (Despite the much-trumpeted low unemployment rate, the New York Times reports that jobs are often subpar, featuring little stability and security). Once upon a time, only the working poor took second jobs to stay afloat. Now the Middle Precariat has joined them.
Quart documents the desperate measures taken by people trying to keep up appearances, relying on 24/7 "extreme day care" to accommodate unpredictable schedules or cobbling together co-living arrangements to cut household costs. They strain to provide things like academic tutors and sports activities for their kids who must compete with the children of the wealthy. Deep down, they know that they probably can't pass down the cultural and social class they once took for granted.
Quart cites a litany of grim statistics that measure the quality of their lives, like the fact that a middle-class existence is now 30% more expensive than it was twenty years ago, a period in which the price of health care and the cost of a four-year degree at a public college nearly doubled.
Squeezed is especially detailed on the plight of the female Middle Precariat, like those who have the effrontery to procreate or grow older. With the extra burdens of care work, pregnancy discrimination, inadequate family leave, and wage disparities, (not to mention sexual harassment, a subject not covered), women get double squeezed. For women of color, often lacking intergenerational wealth to ease the pain, make that a triple squeeze.
The Middle Precariat in middle age is not a pretty sight: without union protection or a reliable safety net they endure lost jobs, dwindled savings, and shattered identities. In one of the saddest chapters, Quart describes how the pluckiest try reinvent themselves in their 40s or 50s, enrolling in professional courses and certification programs that promise another shot at security, only to find that they've been scammed by greedy college marketers and deceptive self-help mavens who leave them more desperate than before.
Quart notes that even those making decent salaries in the United States now see themselves barred from the club of power and wealth. They may have illiquid assets like houses and retirement accounts, but they still see themselves as financially struggling. Earning $100,000 sounds marvelous until you've forked over half to housing and 30% to childcare. Each day is one bit of bad luck away from disaster.
"The spectacular success of the 0.1 percent, a tiny portion of society, shows just how stranded, stagnant, and impotent the current social system has made the middle class -- even the 10 percent who are upper-middle class," Quart writes.
Quart knows that the problems of those who seem relatively privileged compared many may not garner immediate sympathy. But she rightly notes that their stresses are a barometer for the concentration of extreme wealth in some American cities and the widening chasm between the very wealthy and everybody else.
The Dual Economy
The donor-fed establishment of both political parties could or would not see this coming, but some prescient economists have been sounding the alarm.
In his 2016 book The Vanishing Middle Class , MIT economist Peter Temin detailed how the U.S. has been breaking up into a "dual economy" over the last several decades, moving toward a model that is structured economically and politically more like a developing nation -- a far cry from the post-war period when the American middle class thrived.
In dual economies, the rich and the rest part ways as the once-solid middle class begins to disappear. People are divided into separate worlds in the kinds of jobs they hold, the schools their kids attend, their health care, transportation, housing, and social networks -- you name it. The tickets out of the bottom sector, like a diploma from a first-rate university, grow scarce. The people of the two realms become strangers.
French economist Thomas Picketty provided a stark formula for what happens capitalism is left unregulated in his 2015 bestseller, Capital in the Twenty-First Century . It goes like this: when the rate of return on the investments of the wealthy exceeds the rate of growth in the overall economy, the rich get exponentially richer while everyone becomes poorer. In more sensible times, like the decades following WWII, that rule was mitigated by an American government that forced the rich pay their share of taxes, curbed the worst predations of businesses, and saw to it that roads, bridges, public transit, and schools were built and maintained.
But that's all a fading memory. Under the influence of political money, politicians no longer seek a unified economy and society where the middle class can flourish. As Quart observes, the U.S. is the richest and also the most unequal country in the world, featuring the largest wealth inequality gap of the two hundred countries in the Global Wealth Report of 2015.
Who is to Blame?
Over and over, the people Quart interviews tend to blame themselves for their situation -- if only they'd chosen a different career, lived in another city, maybe things wouldn't have turned out this way. Sometimes they point the finger at robots and automation, though they arguably have much more to fear from the wealthy humans who own the robots.
But some are waking up to the fact it is the wealthy and their purchased politicians who have systematically and deliberately stripped them of power. Deprivations like paltry employee rights, inadequate childcare, ridiculously expensive health care, and non-existent retirement security didn't just happen . Abstract words like deregulation and globalization become concrete: somebody actually did this to you by promoting policies that leave you high and dry.
As Quart indicates, understanding this is the first step to a change of consciousness, and her book is part of this shift.
Out of this consciousness, many individuals and organizations are working furiously and sometimes ingeniously to alter the negative trajectory of the Middle Precariat. Quart outlines proposals and developments like small-scale debt consolidation, student debt forgiveness, adequately subsidized day care, and non-traditional unions that could help.
America also has a track record of broad, fundamental solutions that have already proven to work. Universal basic income may sound attractive, but we already have a program that could improve the lot of the middle class if expanded: Social Security.
Right now, a worker stops having to pay Social Security tax on any earnings beyond $128,400 -- a number that is unreasonably low because the rich wish to keep it so. Just by raising that cap, we could the lower the retirement age so that Americans in their 60s would not have greet customers at Walmart. More opportunities would open up to younger workers.
The Middle Precariat could be forgiven for suspecting that the overlords of Silicon Valley may have something other than altruism in mind when they tout universal basic income. Epic tax evaders, they stand to benefit from pushing the responsibility for their low-paid workers and the inadequate safety net and public services that they helped create onto ordinary taxpayers.
Beyond basic income lies a basic fact: the American wealthy do not pay their share in taxes. In fact, American workers pay twice as much in taxes as wealthy investors. That's why infrastructure crumbles, schools deteriorate, and sane health care and childcare are not available.
Most Americans realize that inequality has to be challenged through the tax code: a 2017 Gallup poll shows that the majority think that the wealthy and corporations don't pay enough. Politicians, of course, ignore this to please their donors.
And so the Middle Precariat, like the Trump voters, is getting fed up with them.
From Depressed to Energized
Quart astutely points out that income inequality is being written into the law of the land. Funded the efforts of billionaires like the Koch brothers, politicians have altered laws and constitutions across the country to cement the dual economy through everything from restricting voting rights to defunding public education.
Several Middle Precariats in Squeezed have turned to independent or renegade candidates like Bernie Sanders who offer broad, substantial programs like debt-free college and universal health care that address the fissures in their lives. They are listening to candidates who are not afraid to say that markets should work for human beings, not the other way around.
If Donald Trump's political rise "can be understood as an expression of the gulf between middle-class citizens and America's ruling classes," as Quart observes, then the recent surge of non-establishment Democratic candidates, especially democratic socialists, may be the next phase of a middle class revolt.
Recent surprise victories in Pennsylvania and New York in the Democratic primaries by female candidates openly embracing democratic socialism, including Alexandria Ocasio-Cortez, who bested Democratic stalwart Joe Crowley by running for Congress on a platform of free Medicare and public college tuition for all, may not be the blip that establishment Democrats hope. In New York, democratic socialist Julia Salazar is looking to unseat long-time state senator Martin Dilan. Actress Cynthia Nixon , running against New York Governor Andrew Cuomo, has just proclaimed herself a democratic socialist and promises to raise taxes on the rich and boost funding for public schools. Michelle Goldberg recently announced in the New York Times that " The Millenial Socialists are Coming ," indicating the intense dislike of traditional politics in urban centers. These young people do not think of things like debt-free college or paid family leave as radical: they see it done elsewhere in the world and don't accept that it can't be done in America.
Historically, the more affluent end of the middle class tends to identify with and support the wealthy. After all, they might join their ranks one day. But when this dream dies, the formerly secure may decide to throw their lot in with the rest of the Precariats. That's when you have the chance for a real mass movement for change.
Of course, people have to recognize their common circumstances and fates. The urban denizens of New York and San Francisco have to see what they have in common with middle class Trump voters from the Rust Belt, as well as working class Americans and everybody else who is not ultra-rich.
If the growing ranks of Precariats can work together, maybe it won't take a natural catastrophe or a war or violent social upheaval to change America's unsustainable course of gross inequality. Because eventually, something has to give.
Sergey P , July 26, 2018 at 3:42 amathena , July 26, 2018 at 6:06 am
I think one crucial thing that has to change is the culture of extreme individualization.
Professed as a right for individual freedom and empowerment, in reality it serves to suppress disobedience with shame. If you earn like shit -- it's gotta be because YOU are shit. Just try harder. Don't you see those OTHER kids that did well!
Part of the blame is on New Age with it's quazi-buddhist narrative: basically, everything is perfect, and if you don't feel it that way, it's because you are tainted with envy or weakness.
Thus what is in fact a heavily one-sided battle -- is presented as a natural order of things.
I believe we need a new framework. A sort of mix of Marx and Freud: study of the subconscious of the social economy. The rich not just HAPPEN to be rich. They WANT to be rich. Which means that in some way they NEED others to be poor.
Of course, I'm generalizing. And some rich are just really good at what they do. These rich will indeed trickle down, they will increase the well-being of people. But there are others. People working in insurance and finance. And as their role in the economy grows -- as does their role in politics, their power. They want to have more, while others would have less.
But behind it all are not rational thoughts, not efficiency, but psychological trauma, pain of the soul. Without addressing these matters, we will not be able to change the world.
I'm sorry if my thoughts are somewhat fragmented. It's just something I've been thinking of a lot since I started reading NC, discovering MMT and heterodox approaches in general.NotTimothyGeithner , July 26, 2018 at 7:53 am
I enjoyed reading your thoughts, and completely agree with them all. :)Louis Fyne , July 26, 2018 at 8:53 am
The problem is the perception the Democratic Party is reliable as a partner. The culture wasn't a problem in 2008 when the Democratic candidate was perceived as wanting to raise taxes, pass universal health care, and end the wars.Urizenik , July 26, 2018 at 9:00 am
====Part of the blame is on New Age with it's quazi-buddhist narrative: basically, everything is perfect, and if you don't feel it that way, it's because you are tainted with envy or weakness.
Adam Curtis touched about this (and the 50's/60's "self-actualization movement) in his TV documentary "Century of Self." if i recall correctly. https://www.youtube.com/results?search_query=century+of+self
That's where I first heard of this theoretical link. I think that it's flat out right and post-WWII psycho-babble has seeped into society in pernicious ways (along with everything else, breakdown of nuclear family, etc). Unfortunately, can't prove it like Euclid.MC , July 26, 2018 at 10:16 am
"A sort of mix of Marx and Freud"– the " Frankfurt School " is a start, with the realization of "the culture industry" as force majeure in the "heavily one-sided battle." And ditto recommendation of "The Century of the Self."Left in Wisconsin , July 26, 2018 at 1:00 pm
There's also Zizek.DolleyMadison , July 26, 2018 at 3:02 pm
Both good suggestions.
Responding to Sergey P:
I think one crucial thing that has to change is the culture of extreme individualisation.
There are really only two alternatives to individualism. There is Durkheim-ian "society," in which we are all in this together – interdependent. I think this is still an appropriate lens for a lot of smaller cities and communities where people really do still know each other and everyone wants the community to thrive. And, of course, it is the only way to think about human society nested inside a finite Earth. But it can only work on a larger scale through mediating "institutions" or "associations." All the evidence shows, consistent with the piece, that precariousness by itself weakens social institutions – people have less time and money to contribute to making them work well.
And then there is Marx-ian "class." Which is to say, we are not all individuals but we are not all of one group. There are different groups with different interests and, not infrequently, the interests of different groups are opposed – what is good for one is bad for another – and if power is unequal between groups (either because some groups as groups have more power than others or because individuals with more power all have the same group affinity), then powerful groups will use that power to oppress others. In that case, the only remedy is to try to systematically empower the weak and/or disempower the strong. This also requires collective action – institutions, associations, government – and it is again noted that our collective institutions, most notably unions, have been seriously weakened in the last 40-60 years.
The real world doesn't always fit into neat categories. Trump's America First is an appeal to the "society" of USAmerica. Maybe there will be some improvements for working people. But the argument in the piece, perhaps not as clearly stated as I would like, is that the interests of the (former) middle class – as a class – have diverged from the interests of the upper class. Changing that equation requires collective action.Redlife2017 , July 26, 2018 at 5:08 am
Well saidJim Haygood , July 26, 2018 at 5:49 am
Naturally one must quote the great Frank Herbert from his novel Dune:
"Once men turned their thinking over to machines in the hope that this would set them free. But that only permitted other men with machines to enslave them."
Or shorter: Follow the money.YankeeFrank , July 26, 2018 at 8:34 am
'We already have a program that could improve the lot of the middle class if expanded: Social Security.'
Never mind expanding it -- even the existing Social Security program is less than 20% funded, headed for zero in 2034 according to its trustees. Scandalously, these trustees owe no fiduciary duty to beneficiaries. Old Frank wanted pensioners to be forever dependent on his D party. How did that work out for us?
Take a look at the transmittal letter for the 2018 trustees report, released last month. Two public trustee positions are "VACANT," just as they were in last year's transmittal letter:
Just above these blank spaces is the signature of one Nancy Berryhill, "Acting Commissioner of Social Security." But wait --
On March 6, 2018, the Government Accountability Office stated that as of November 17, 2017, Berryhill's status violated the Federal Vacancies Reform Act, which limits the time a position can be filled by an acting official; "[t]herefore Ms. Berryhill was not authorized to continue serving using the title of Acting Commissioner after November 16." Berryhill declared, "Moving forward, I will continue to lead the agency from my position of record, Deputy Commissioner of Operations."
By June 5th, Berryhill was still impersonating the Acting Commissioner, legally or not.
Summing up, even the trustees' one-page transmittal letter shows that Social Security is treated as a total and complete Third World joke by the US federal government.Kurtismayfield , July 26, 2018 at 8:44 am
Yeah, yeah. Gubmint can't do nuthin' rite. How about we take our government back from the plutocrats and set SS on solid footing again. There are no impediments other than the will of the people to use our power. Now that the Boomers are moving off all sorts of things, like 'thinking', and 'logic', will become prevalent again.Jamie , July 26, 2018 at 11:03 am
Never mind expanding it -- even the existing Social Security program is less than 20% funded, headed for zero in 2034 according to its trustees. Scandalously, these trustees owe no fiduciary duty to beneficiaries. Old Frank wanted pensioners to be forever dependent on his D party. How did that work out for us?
Correct, then the system will eventually be totally reliant on taxes coming in. According to 2011 OASDI Trustees Report
Beginning in 2023, trust fund assets will diminish until they become exhausted in 2036. Non-interest income is projected to be sufficient to support expenditures at a level of 77 percent of scheduled benefits after trust fund exhaustion in 2036, and then to decline to 74 percent of scheduled benefits in 2085
The benefits are never going to go completely away, the benefits will decrease if nothing is done. Things can be done to change this, such as an increasing the the cap on earnings, raising new revenues, etc. This is not exactly an "end of the world" scenario for SSI.
Also, no one complained when the excess SSI tax collected "Social security trust fund" was used to keep interest rates down by purchasing Government bonds.Kurtismayfield , July 26, 2018 at 11:29 am
The whole tax angle is a complete red herring. Raising the cap is not the answer. FICA is "the most regressive tax" the country imposes. Eliminating FICA altogether, doing away with the "trust fund" and the pretense that SS is not the government taking care of it's elderly citizens but is workers taking care of themselves, is the answer. If the emphasis in Quart's book on the rise of a new democratic socialism means anything, it means reconciling with the notion that it is OK for the government to take measures to ensure the welfare of the people. Pay-as-you-go SS can become simply the re-assumption of our collective responsibility to take care of our own, as a society, not as individuals.kgw , July 26, 2018 at 11:39 am
I would be fine with that if I could trust the Federal government to do the right thing. The problem is that we have too many people invested in the system, and I don't trust the Federal government to not screw people over in a new system. You know what will happen, they will set up a two tiered system where people over a certain age will keep their benefits, and the new people will get a system that is completely crapified or means tested.Anon , July 26, 2018 at 2:02 pm
Well-put The only way to eliminate the constant refrain of "but SS is (insert blithering comment on entitlement spending), is to shift resources to people rather than armies for the SuperRich.JCC , July 26, 2018 at 9:52 am
Yeah, more Butter–Less Guns!
(Now how do we stop the media hysteria about those big,bad Enemies -- Russia?!)Grumpy Engineer , July 26, 2018 at 11:00 am
So we should just ignore the fact that our own Govt has "borrowed" $2.8 Trillion, at least, from the SS Trust Fund so far and can't (won't) pay it back?
This "borrowing" should be illegal and I believe that "Old Frank" would be rolling in his grave if he knew that would happen.
And I sincerely doubt his intentions were to get SS on the books in order to keep us beholden to the Dem Party. And if that were true it is obvious that his party doesn't agree. If they did they wouldn't be assisting in gutting the program.Spring Texan , July 26, 2018 at 1:15 pm
The whole concept of creating and maintaining a multi-trillion dollar "trust fund" was irrevocably flawed. When the surplus payroll taxes were "invested" in government bonds, they entered the government's general fund and were promptly spent. The money is gone. That's why it's on the books as a debt owed to the Social Security administration. There are no actual assets behind the fund. It's just one part of the government owing money to another part of the government.
However, what would the alternative have been? Investing in the crap shoot known as the US stock market? No thanks. Or setting the funds aside in a bank account, where they would cease circulating through the economy? That wouldn't have worked either, as all dollars in circulation would have eventually ended up there, causing massive deflation.
None of these are workable. We should have gone on a strictly pay-as-you-go basis. If payroll taxes generated more revenue than was necessary, we should have cut payroll taxes and/or raised benefits. And if they fall short, we should raise payroll taxes and/or cut benefits.
Today, we cover about 95% of benefits with payroll taxes. The remainder comes from "trust fund redemptions", where general fund monies are given to the SSA to cover the shortfall. Given that our government is already running a deficit, this means more borrowing (or money-printing, depending on how you look at things).
When the "trust fund" is depleted, but SSA will lack the legal authority to claim any more general fund monies, but it would be quite easy for Congress to change the rules to simply state that "any SSA shortfall will be covered by the general fund". And I predict they will do so in 2034, as it would take less than a month of constituents complaining about reduced benefits to force even the strictest of deficit hawks to cave.
Or maybe they'll get creative and instead raise rates on the interest that the trust fund earns. Right now it's a 3% rate, but if Congress were to double or triple it, the trust fund would last much longer. [As would the debt owed to the SSA.] Heck, if they multiplied the interest rate by a factor of 11, then they could theoretically dispense with payroll taxes entirely. Right?Milton , July 26, 2018 at 10:37 pm
Yes, SS has contributed NOT ONE PENNY to the deficit and the reason it accumulated a surplus was so people could collect later. Now, they want to say that old surplus shouldn't count. That's thievery.ObjectiveFunction , July 26, 2018 at 6:44 am
tired old tripe and how much is the US military funded? I can answer that for you. It's ZERO. 0% funded! Take your heterodox BS to a bunch of freshman impressionables – it is only tolerated here because you are a fine writer and interesting as hell and know almost all there is about economic liberalism.Musicismath , July 26, 2018 at 7:29 am
Wow. So let's go full SSCodex for a bit and push this trend out to the limit.
While the unwashed masses remain a market for big Ag, big Pharma, big Auto, big (online) Retail, and a few others, it seems like the predatory 'fund' segment of the FIRE elite has moved on to devouring larger prey (capitalist autophagy?). The unbankable precariat are beneath their notice now, like pennies on the sidewalk.
So in that case, the 1% of the 0.1% has evolved beyond 'exploitation' in any Marxist sense. It is now indifferent to the very life or death of the precariat, at home or abroad, still less their security or advancement. It needs them neither for consuming nor producing, nor for building ziggurats.
(Just so long as the pitchforks aren't out – but that's what the credentialed minion 20% is for. And drones).
Here Disposables, have some more plastic and painkillers. Be assured the Alphas will be live tweeting the Pandemic, or Chicxulub 2.0, from Elon's luxury robot-serviced survival capsules (oh, you thought those were for use on Mars? Silly rabble!)
It's like that DKs mosh pit classic: "Uncounted millions whisked away / the rich will have more room to play"
[I exaggerate, of course, for illustration. Slightly.]athena , July 26, 2018 at 7:47 am
I think you can extend this analysis to the current U.K. Conservative Party. Commentators have started to notice that the Brexiteer wing of the party seems completely impervious to claims Brexit will harm the economy. Are the Tories no longer the natural party of British business, they ask?
Using your logic, we can say that a fund-interest-dominated Tory party simply has no interest in or need for the "ordinary" bits of the British business community anymore. What it wants are shorting and raiding opportunities, and from that vantage point a catastrophic Brexit is very attractive. Put these interests in coalition with a voter base largely living on guaranteed incomes and retirement funds of one sort or another and you have the surreal spectacle of an entire governing party and its supporters who are no longer anchored to the "real" economy at all. Yes, it's an exaggeration but it's an exaggeration that explains a few things, I think.ObjectiveFunction , July 26, 2018 at 8:47 am
You both need to read the 2005 leaked Citigroup "plutonomy memo", if you haven't yet. Very bright minds called it a decade ago, that the global economy isn't even an economy any longer in any traditional sense. This is part one: https://delong.typepad.com/plutonomy-1.pdfsharonsj , July 26, 2018 at 4:59 pm
"Plutonomy" sounds like some nasal epithet out of a Goebbels speech: " die Plutonomisten und Bolshewisten! "Louis Fyne , July 26, 2018 at 8:09 am
Great link. From page one, Citigroup thinks the global imbalance is a great opportunity. Nothing new here. For years I've been reading about stock and futures manipulations–and vulture capitalists–that cause people to die or kill themselves. The rich don't care; they see it as a way to make more money. And then you wonder why I've been talking revolution for years as well?athena , July 26, 2018 at 8:17 am
"Who is to Blame?"
Answer: Add the US wasting its blood and cash meddling in other countries' affairs. "honest friendship with all nations-entangling alliances with none." bueller ?
Ironic as multilateralist/globalist/fan of US interventions George Soros supposedly provided some of the seed money for the Institute for New Economic Thinking.chris , July 26, 2018 at 8:40 am
I don't think Soros is diabolical or sadistic. He's just, let's say, "neurologically eccentric" and unimaginably wealthy.athena , July 26, 2018 at 9:25 am
https://www.youtube.com/watch?v=Iipn6yM43sMChiGal in Carolina , July 26, 2018 at 11:52 am
I just want to not die earlier than necessary because I can't afford health care. I'd also like to stop worrying that I'll spend my golden years homeless and starving because of some disaster headed my way. I gave up on status a long time ago, and am one of those mentioned who has little pity for the top 10%.John B , July 26, 2018 at 8:50 am
DittoDaniel F. , July 26, 2018 at 9:32 am
Sounds like a good book. I shall have to pick it up from my library, since buying new books is a stretch.
Nearly all income growth in the United States since the 1970s has gone into income obtained by the rich other than wages and salaries, like capital gains, stock options, dividends, partnership distributions, etc. To capture overall economic growth to which the entire society has contributed, Social Security benefits should be tied to economic growth, smoothed for the business cycle. If people believe benefit increases require tax increases, the tax should be applied to all earnings, not just salary/wages. Raising the $128,400 cap on income subject to SS taxes would thus increase taxes on the lower rungs of the upper middle class but not really address the problem.nycTerrierist , July 26, 2018 at 9:47 am
I apologise in advance for being blunt and oversimplifying the matter, but at the end of the day, (in my very humble and possibly uninformed opinion) nothing short of a mass beheading would work. The 0.1% doesn't really seem, uh, willing to let go of their often ill-gotten billions, and when they do (i.e. charities and such), they often end up being some kind of scam. I refuse to believe that the Zuckerberg-types operate their foundations out of genuine philanthropy. Acquisitions and mergers like Disney buying Fox or Bayer gobbling up Monsanto don't contribute anything to the well-being of the 99% either, and I think that's and understatement.
If there's going to be some kind of revolution, it needs to happen before the logical conclusion of rampaging capitalism. the OCP-type megacorp with its own private army. And, if there indeed is a revolution, what's next?Michael Fiorillo , July 26, 2018 at 10:14 am
https://www.washingtontimes.com/news/2018/jul/25/betsy-devos-yacht-untied-causing-10000-damages/Newton Finn , July 26, 2018 at 9:36 am
Case in point: as a public school teacher who has been opposing so-called education reform for two decades, I can assure you that the "venture/vulture philanthropy" model that infests the education world has absolutely nothing to do with improving education, and everything to do with busting the teachers unions, privatizing the schools and turning them into drilling grounds for training young people to accept the subordination, surveillance, tedium and absurdity that awaits them in the workplace. For those lucky enough to have jobs.
As a result of this phenomena, I periodically suggest a new term on the education blogs I post on: "Malanthropy:" the process of of using tax exempt, publicly subsidized entities to directly and indirectly support your financial and political interests, but which are harmful to the public good"The Rev Kev , July 26, 2018 at 10:06 am
Clear and compelling analysis, although still a little MMT challenged. About to turn 70, I vividly remember living through a sudden sea change in American capitalism. In the late 1970s/early 80s, whatever undercurrents of patriotism and humanitarianism that remained within the postwar economy (and had opened the space for the middle class) evaporated, and almost overnight we were living in a culture without any sense of balance or proportion, a virulent and violent mindset that maxed out everything and knew not the meaning of enough. Not only the business world but also the personal world was infected by this virus, as ordinary people no longer dreamed of achieving a healthy and stable family life but rather became hellbent to "succeed" and get rich. Empathy, compassion, and commitment to social justice was no longer cool, giving way to self-interest and self-promotion as the new "virtues." Men, of course, led the way in this devolution, but there was a time in the 90s when almost every other woman I knew was a real estate agent. I touched upon a small male-oriented piece of this social devolution in an essay I wrote several years ago: Would Paladin Have Shot Bin Laden? For those who might be intrigued, here's the link:
https://newtonfinn.com/2011/12/15/would-paladin-have-shot-bin-laden/Brooklin Bridge , July 26, 2018 at 10:49 am
What was needed was a Wyatt Earp, not a Paladin ( https://www.youtube.com/watch?v=tgvxu8QY01s ). His standard procedure in the old West was to use his Colt revolver to pistol-whip an offender. Short, sharp and effective.
But then again there was no way that Bin Laden was ever going to be taken prisoner. That bit on his resume as being a contractor for the CIA was a bit embarrassing after all.Newton Finn , July 26, 2018 at 12:22 pm
I remember the 50's and even under the hue of bright eyes saw that people were just as hell bent to 'get ahead' in their careers as now and that competing with 'the Joneses' in every crude way imaginable was the rage.
Perhaps more precise to say that in the early '80s, Capitalism reached a tipping point where gravity overcame thrust and virtues with latent vice became vices with the optics of virtue. That and the fact that the right actors always seem available -as if out of thin air, but in reality very much part of cause and effect – for a given state of entropy.BrianStegner , July 26, 2018 at 10:05 am
No doubt what was somewhat latent in postwar American capitalism became obscenely blatant in or around the Reagan era. It was all there before, of course, in former times like the Gilded Age. But in the midsize, now rustbelt city I grew up in and continue to live in, the upper middle class of my childhood and youth–the doctors, lawyers, corporate exec's, etc.–lived a few blocks away from my working class neighborhood, had nicer homes, drove caddys instead of chevys, and so forth, but their kids went to school with us working class kids, went to the same movies and dances, hung out in the same places, and all of us, generally, young and old, lived in essentially the same world. For example, my uncle, a lawyer, made maybe 3 times what my dad, a factory clerk, made. THAT was the split between the middle and upper middle class back then, at least in a fairly typical Midwestern city. THAT was what drastically and suddenly changed in the late 70s/early 80s and has only intensified thereafter.Expat2uruguay , July 26, 2018 at 10:28 am
Terrific article, but with so many "missing" words (words left out)–too many to list, gratis–you make it a serious challenge to consider sharing with literate friends on social media. Seriously, doesn't anyone re-read their work before "posting?"ChiGal in Carolina , July 26, 2018 at 11:40 am
Well, at least the missing words in this piece don't make sentences unintelligible. I've seen that happen before.
It's such a shame for authors to put so much work time and effort into their articles, but then allow the lack of an editor or final read-through to tarnish the entire work.David Miller , July 26, 2018 at 10:11 am
If they're so literate, they can fill in the missing words as the NC commentariat has apparently done with no difficulty.
The substance is well worth sharing, and widely.Eureka Springs , July 26, 2018 at 10:16 am
One thing that strikes me – a generation ago the talking-point robots of the right could decry "socialized medicine" and all those people supposedly dying while waiting for an operation in foreign, "socialized medicine" places. And they could largely get away with it because relatively few people had personal acquaintances outside their own area.
But now, anyone active in social media probably can interact freely with people all over the world and appreciate how pathetic things really are in the US.
I read on a sports-related forum where an English guy had been watching Breaking Bad and commented offhand that he was amazed at the cost of medical treatment for Mr. White. This turned into a discussion between Brits and Yanks about the NHS. And person after person chimed in "yeah, NHS is not perfect but this kind of thing could never happen here." And you saw the Americans – "yeah, our health care system really is a disgrace."
I'm not a big fan of the social media Borg in general, but here at least seems to be a good effect. It might over time enable more people to wake up as to how jacked up certain things are here.ChiGal in Carolina , July 26, 2018 at 11:50 am
I'd like to declare us a completely divided, conquered people.
In the last few weeks I've visited with many old friends all of them suffering in silence. Each and every one falling further behind, on the brink of disaster, if not already there. No matter their credentials, many highly credentialed with multiple degrees and or highly experienced in several fields. All with ridiculously high work ethics. All feel maintaining personal integrity is costing them an ability to 'get ahead'.
Many of these friends have multiple jobs, no debt, no car payment, some have insurance which is killing them, medical bills which bury them if they ever have so much as basic health issues, and they are thrifty, from the clothes they wear to the amount of rent they commit themselves. And yet 'staying afloat', is but a dream trumped by guilt and isolationism.
I often joke with my fellow country neighbors that it costs a hundred bucks to simply leave the house. It's not a joke anymore. At this point those still fighting for a paltry 15.00 should include a hundred dollar per day walk out your front door per diem.
A couple months back I gave my camper to an old acquaintance who had no record, found himself homeless after being falsely accused of a crime and locked up for two months. And another friend with full time management position, just gave up her apartment to move into a tent in another friends back yard. Both of these people are bright, hard working, mid forties, white, family peeps with great children. The very kind this article addresses.
The noose tightens and people are committing desperate acts. There is no solidarity. No vision of a way out of this.
Watch a ten dollar parking ticket bring a grown man to terror in their eyes. And he brought in a thousand bucks last week, but has been texting his landlord about past due rent all afternoon.
I feel like I'm on the brink of a million episodes of " Falling Down ".John , July 26, 2018 at 11:56 am
Indeed. But as consciousness is raised as to the real causes (not personal failure, not robots taking over), hopefully solidarity will grow.
Wonderful article, definitely want to read the book.sharonsj , July 26, 2018 at 5:09 pm
I don't think the 0.1% wanted to build a society like this, it is just the way the math works. Somewhere around 1980 the integrity of the US was lost and it became possible for the owning class to divorce themselves from their neighbors and arbitrage labor around the world. Computers and telecommunications made it possible to manage a global supply chain and Republicans changed the tax rules to make it easier to shut down businesses and move them overseas.
A different way to view this: as the wealthy earn profits they can use some of their cash to modify the rules to their benefit. Then they gain more cash which allows them to influence voters and politicians to modify the rules even more in their favor.
If people organized they could change the rules in their favor, but that rarely happens. We used to have unions (imperfect though they were) which lobbied for the working class.Louis , July 26, 2018 at 10:17 am
I think the 1980s was when I found out my wealthy cousins, who owned a clothing factory in Georgia, had moved it to–get ready for this–Borneo! And of course they are Republicans.John Wright , July 26, 2018 at 10:33 am
The collective decisions to pull up the drawbridge, and a lot middle-class people have supported these decisions are the major reason why there is a housing crisis and higher-education is so expensive.
A lot of people, especially middle-class people, come out with pitchforks every time a new housing development is proposed, screaming about how they don't want "those people" living near them and will vehemently oppose anything that isn't single-family homes which has resulted in the housing supply lagging behind demand, thus affordability issues.
These same people over the years have decided that tax-cuts are more important than adequately funding higher education, so higher education has become a lot more expensive as state support has dwindled.
As the saying goes you made you bed, now you get to sleep in it. Unfortunately so does the younger generation who may not have anything to do with the horrible decision making of the past.FluffytheObeseCat , July 26, 2018 at 10:58 am
The article stated Americans are "Petrified of being pushed aside by robots".
Maybe I associate with the wrong people, but I don't know any who fear being pushed aside by robots.
But I do know of someone who was being laid off from a tech firm and was finding his job moved overseas.
The deal management presented was, "you can leave now, with your severance package, or get two more weeks pay by training your replacement who will be visiting from overseas."
He trained the new worker for the two weeks.
The American worker is being hit, not by robots, but by outsourcing to other countries and by in-sourcing of labor from other countries.
Robots are expensive and will be avoided if a human can do the job cheaply enough.
That the article brings "fear of robots" into the discussion is a tell that the writer does not want to mention that it is the competition from others in the world wide labor force that depress USA wages.
In the USA, we are witnessing labor arbitrage encouraged by both parties and much of the media as they push USA wages toward world wide levels.
But not for the elite wage earners who gain from this system.Brooklin Bridge , July 26, 2018 at 11:11 am
Agreed. The kind of pink collar and barely white collar employees this piece was focused on are not presently threatened by "robots". They are threatened by outsourcing and wage arbitrage.ambrit , July 26, 2018 at 12:24 pm
That the article brings "fear of robots" into the discussion is a tell that the writer does not want to mention that it is the competition from others in the world wide labor force that depress USA wages.
You may have a point there, and you are spot on that the vast bulk of job-loss is due to job migration and import of cheaper labor. But regardless of the writer's intent or simple laziness, don't be too fast to poo-poo the effect of Robots.
One problem is that we tend to measure job loss and gain without reference to the actual job loosers and the fact that re-training for them may well be impossible or completely ineffective or, at the very minimum, often extremely painful. So while automation may provide as many new jobs as it takes away old ones, that is cold comfort indeed to the worker who gets left behind.
Another, is that the fear of massive job loss to Robots is almost certainly warranted even if not yet fully materialized.Todde , July 26, 2018 at 1:01 pm
When the "Steel Wave" of robot workers comes ashore, I'll be near the head of the queue to join the "Robo Luddites." If the owners of the robot hordes won't pay a fair share of the costs of their mechanominions worker displacement activities, then they should be made to pay an equivalent share in heightened "Production Facility Security Costs." Ford Motors and the River Rouge plant strike comes to mind.
See: http://98937119.weebly.com/strike-at-the-river-rouge-plant-1941.htmlBrooklin Bridge , July 26, 2018 at 1:35 pm
The robots are going to be shooting backambrit , July 26, 2018 at 9:45 pm
It'd be great to be right there with you on that fateful day, Ambrit :-) (And I've even got my gun with the little white flag that pops out and has "Bang!" written on it, all oiled up and ready to go). I suspect however that it will be a silent D Day that probably took place some time ago.
Hard Briexit looks to be baked in the cake
Global Warming disaster looks to be baked in the cake
Water wars look to be baked in the cake.
Massive impoverishment in developed and so called third world nations alike and insane 'last gasp' looting looks to be baked in the cake
Why would all manner of robots, the ones too tiny to see along with human looking ones and giant factories that are in reality themselves robots be the exception?G Roller , July 26, 2018 at 4:30 pm
We'd be facing robots, so that flag would have to go "Bang" in binary code. (Might even work. While they are trying to decipher the flag, we can switch their tubes of graphite lubricant with tubes of carborundum.)
When the technologically capable humans have all died off, will the robots perish likewise for lack of programmers?Arizona Slim , July 26, 2018 at 12:02 pm
"Robots" are software programs, do-it-yourself online appointments, voice recognition, "press 1 now." What's the point of retraining? All you're good for is to make sure the plug is in the wall.Brooklin Bridge , July 26, 2018 at 1:46 pm
The act of training the overseas replacement could become an act of sabotage. Think of the ways that one could train the replacement to do the job incorrectly, more slowly than necessary, or not at all.funemployed , July 26, 2018 at 12:19 pm
Sabotage by miss-training.
In a lot of cases that doesn't require much 'intentional' effort. But the lure of cheap labor seems to conquer all. I've seen software companies take loss after loss on off-shore development team screw ups until they finally get it right. I even saw one such company go out of business trying rather than just calling it quits and going back to what was left of their core developers.ChristopherJ , July 26, 2018 at 2:03 pm
As I approach 40, having only realized in recent years that the constant soul-ache I've lived with my whole life is not some inherent flaw in my being, but a symptom of a deeply ill society, I desperately wish I could share in the glimmer of hope at the end of this post.
But I cannot. What drives me to despair is not the fragile, corrupt, and unsustainable social/political/economic system we're inheriting; nor is it the poisoned and increasingly harsh planet, nor the often silent epidemic of mental and emotional anguish that prevents so many of us from becoming our best selves. I retain great faith in the resilience and potential of the human spirit. And contrary to the stereotypes, I think my generation and those who have come after are often more intellectually and emotionally mature than our parents and grandparents. At the very least, we have a powerful sense of irony and highly tuned BS detectors.
What drives me to despair is so pathetically prosaic that I want to laugh and cry all at once as I type this. To put it as simply as I know how, a core function of all functional human societies is apprenticeship, by which I mean the basic process whereby deep knowledge and skills are transferred from the old to the young, where tensions between tradition and change are contested and resolved, and where the fundamental human need to develop a sense of oneself as a unique and valuable part of a community can flourish.
We have been commodified since before we were even born, to the point where opportunities for what Lave and Wenger would call "legitimate peripheral participation" in the kinds of work that yield real, humane, benefits to our communities are scant to nonexistent for most of us. Something has gone deeply awry in this core social function at the worst possible time in human history.
... ,,, ,,,lyman alpha blob , July 26, 2018 at 3:31 pm
thank you funemployed, perceptiveGayle , July 26, 2018 at 5:11 pm
Sympathies from a fellow traveler – your experience sounds similar to mine. I'm a little older and in my 20s I avoided getting a 'real' job for all the reasons you describe. When I hit my 30s and saw what some of the guys who had been hanging out in the bar too long looked like, and decided I ought to at least try it and see how it would go.
Turns out my 20 year old self had been right.David May , July 26, 2018 at 5:16 pm
"Some quirk of my psychology means doing those things creates an irresistible urge in me to slowly poison myself with alcohol and tobacco."
I think those things and drugs are conscience oblivators. Try gardening. Touch the earth. Grow actual food. Not hemp. Back away from the education racket. Good luck. Quit the poison.ChiGal in Carolina , July 26, 2018 at 7:08 pm
That was a wonderful post, very moving, thank you. These kind of testimonies are very important because they show the real human cost of neoliberalism. Neoliberalism is truly a death cult. Please find an alternative to alcohol. Music, art, nature, etc.ambrit , July 26, 2018 at 9:58 pm
Thank you for sharing your compelling story. As someone who could be your mother, it is painful to me not only that this is your experience, but that you are so acutely aware of it. No blinders. Hence, I guess, the need for alcohol.
You write beautifully. Hope is hard to come by sometimes.Unfettered Fire , July 26, 2018 at 12:25 pm
At least you are self aware. Most people are not. As for the Ship of Status, let it sink. Find a lifeboat where you feel comfortable and batten down for the Roaring (20)40s yet to come. Once you find something to work for, the bad habits will lose much of their hold on you. As long as you don't slide into alcoholism, you have a chance.Newton Finn , July 26, 2018 at 5:10 pm
Life was kinder just 40 years ago, not perfect but way more mellow than it is today. Kids were listening to Peter Frampton and Stevie Wonder, not punk, grunge, rap and industrial music. What changed? Neoliberalism, the economic policy that is private sector "free market" driven, giving the owners of capital free, unfettered reign. Created by libertarians like Fredrich von Hayek and Milton Friedman, they sold it to the nation but failed to mention that little peccadillo about how privatization of government would usher in economic fascism.
"An extreme form of laissez-faire individualism that developed in the writings of Hayek, Friedman and Nozick they are also referred to as libertarians. They draw on the natural rights tradition of John Locke and champion's full autonomy and freedom of the individual."
What they meant was ECONOMIC freedom. They despise social freedom (democracy) because civil, labor, health, food safety, etc., rights and environmental protections put limits on their profits.
The "maximizing shareholder value" myth turns people into psychopaths . The entire neoliberal economic policy of the past 40 years is based on the false assumption that self-interest is the driving evolution of humanity. We're not all psychopaths, turns out. We're social beings that have mainly used cooperation to get us through these thousands of years of existence.
There's nothing wrong with wanting government to protect the public sector from predatory capitalists. Otherwise, society's value system turns upside down sick people are more valued than healthy violent are more valued to fill up the prison factories war becomes a permanent business a filthy, toxic planet is good for the oil industry a corporate governance with no respect for rights or environmental protections is the best capitalism can offer?
Thanks, but no thanks.
The easily manipulated right are getting the full assault. "Run for your lives! The democratic socialists want to use the government bank for everyone, not just the 1%!! They understand how the economy really works and see through our lies!! Before you know it, everyone will be enjoying a better quality of life! AAAAGHHH!!"
Even the IMF is getting a scolding for being so out-of-touch with reality. Isn't economics supposed to factor in conscience?
"If the IMF is to shake its image as an inward-looking, out-of-touch boys club, it needs to start taking the issue seriously. The effect of the male dominance in macroeconomics can be seen in the policy direction of the organisation: female economists are more likely to be in favour of Government-backed redistribution measures than their male counterparts.
Of course, the parochial way in which economics is perceived by the IMF, as nothing more than the application of mathematical models, is nothing new. In fact, this is how mainstream economics frequently is taught in universities all over the world. Is it any wonder that the IMF has turned out as it is?"
Michael Hudson, as usual, was right:
"Economics students are forced to spend so much time with this complex calculus so that they can go to work on Wall St. that there's no room in the course curriculum for the history of economic thought.
So all they know about Adam Smith is what they hear on CNN news or other mass media that are a travesty of what these people really said and if you don't read the history of economic thought, you'd think there's only one way of looking at the world and that's the way the mass media promote things and it's a propagandistic, Orwellian way.
The whole economic vocabulary is to cover up what's really happening and to make people think that the economy is getting richer while the reality is they're getting poorer and only the top is getting richer and they can only get rich as long as the middle class and the working class don't realize the scam that's being pulled off on them."Andrew Watts , July 26, 2018 at 12:54 pm
Unfettered Fire and funemployed: deeply appreciate your lengthy and heartfelt posts. It's a terribly small thing, but I have a suggestion to make that always helps me to feel a bit better about things or should I say to feel a bit better about the possibility of things. If you're game, and haven't already done so, search for the following free online book: "Equality" by Edward Bellamy. Then do no more than read the introduction and first chapter (and slightly into the second) to absorb by far the finest Socratic dialogue ever written about capitalism, socialism, and the only nonviolent way to move from the former to the latter–a way wide open to us, theoretically, right now. I know that's a hell of a qualifier.precariat , July 26, 2018 at 1:36 pm
Why do modern intellectuals insist on inventing euphemisms for already known definitions? The middle precariat is merely another term for the petty bourgeoisie. While they may have possessed economic benefits like pensions and owned minuscule amounts of financial assets they were never the dominant ruling class. Their socioeconomic status was always closer in their livelihoods to the working class. After the working class was effectively being dismantled starting in the 1970s, it has become the petty bourgeoisie's turn to be systematically impoverished.
This is the primary economic development of our era of late capitalism. The question is, what does it mean to be American if this country is no longer a land of opportunity?Mel , July 26, 2018 at 1:44 pm
Because the 'known definitions' do not apply anymore.
The middle has more in common with those below than those above. And here is the scary reason: everyone is to be preyed upon by the wealth extractors who dominate our politics/economy -- everyone. There is no social or educational allegieance, there is only a resource to be ruthlessly plundered, people and their ability to earn and secure.Andrew Watts , July 26, 2018 at 5:07 pm
Right. It's hardly a euphemism. The Middle Precariat are the people in the 9.9% who will not be part of the 8.9%.ProNewerDeal , July 26, 2018 at 1:16 pm
The so-called precariat lacks any sense of class consciousness and as a consequence are incapable of any kind of solidarity. Nor do they perceive any predatory behavior in the economic system. If the article is to be believed they blame themselves for their plight. These traits which include the admiration and imitation of the rich are the hallmarks of the petty bourgeoisie.
This disagreement over semantics is an example of the shallowness and superficiality of new ideas. Marx already predicted that they'd be unceremoniously thrown into the underclass in later stages of economic development at any rate.precariat , July 26, 2018 at 1:24 pm
thanks for this article.
The BigMedia & BigPols ignore the Type 1 Overqualified Underemployed cohort. Perhaps hopefully someone like the new Rep Alexandria Ocasio-Cortez will discuss it, her recently being of this cohort as an economist by degree working as a bartender. Instead we have examples of BigMedia/BigPol crying about "STEM worker shortage" where there already are countless underemployed STEM workers working Uber-ish type McJobs.
Afaict the only occupations (mostly) immune to Type 1 Overqualified Underemployment risk here in Murica are medical pros: physicians/dentists/pharmacists & possibly nurses. Otherwise there are stories of PhD Uber drivers, MBA strippers, & lawyers working Apple store retail, especially in the first few years post 2008-GFC but still present now. In other words, the US labor market "new economy" is resembling "old economy" of Latin America or Russia (proverbial physicist selling trinkets on the Trans-Siberia railway).Jean , July 26, 2018 at 1:34 pm
From Eureka Springs, this:
"I often joke with my fellow country neighbors that it costs a hundred bucks to simply leave the house. It's not a joke anymore. At this point those still fighting for a paltry 15.00 should include a hundred dollar per day walk out your front door per diem."
This is a stark and startling reality. This reality is outside the framework of understanding of economic struggle in America that is allowed by the corporate neoliberal culture/media.Sound of the Suburbs , July 26, 2018 at 1:38 pm
As the Precariat grows, having watched the .1% lie, cheat and steal – from them, they are more likely to also lie, cheat and steal in mortgage, employment and student loan applications and most importantly and sadly, in their dealings with each other. Everybody is turning into a hustler.
As to dealings with institutions, this comment is apt. I think this came from NC comments a couple of weeks ago. Apologies for not being able to attribute it to its author:
"Why should the worker be subservient to the employer? Citizens owe NO LOYALTY, moral or legal, to a someone else's money making enterprise. And that enterprise is strictly a product of signed commercial legal documents. Commercial enterprise has no natural existence. It is a man-made creation, and is a "privilege", not a "right"; just as a drivers license is a privilege and not an absolute right."Lambert Strether , July 26, 2018 at 3:35 pm
Economics was always far too dangerous to be allowed to reveal the truth about the economy. The Classical economist, Adam Smith, observed the world of small state, unregulated capitalism around him.
"The labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers."
How does this tie in with the trickledown view we have today? Somehow everything has been turned upside down.
The workers that did the work to produce the surplus lived a bare subsistence existence. Those with land and money used it to live a life of luxury and leisure.
The bankers (usurers) created money out of nothing and charged interest on it. The bankers got rich, and everyone else got into debt and over time lost what they had through defaults on loans, and repossession of assets.
Capitalism had two sides, the productive side where people earned their income and the parasitic side where the rentiers lived off unearned income. The Classical Economists had shown that most at the top of society were just parasites feeding off the productive activity of everyone else.
Economics was always far too dangerous to be allowed to reveal the truth about the economy.
How can we protect those powerful vested interests at the top of society?
The early neoclassical economists hid the problems of rentier activity in the economy by removing the difference between "earned" and "unearned" income and they conflated "land" with "capital". They took the focus off the cost of living that had been so important to the Classical Economists to hide the effects of rentier activity in the economy.
The landowners, landlords and usurers were now just productive members of society again. It they left banks and debt out of economics no one would know the bankers created the money supply out of nothing. Otherwise, everyone would see how dangerous it was to let bankers do what they wanted if they knew the bankers created the money supply through their loans.
The powerful vested interests held sway and economics was corrupted. Now we know what's wrong with neoclassical economics we can put the cost of living back in.
Disposable income = wages – (taxes + the cost of living)
Employees want more disposable income (discretionary spending). Employers want to pay lower wages for higher profits
The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living
The neoliberals obsessed about reducing taxes, but let the cost of living soar. The economists also ignore the debt that is papering over the cracks and maintaining demand in the economy. This can never work in the longer term as you max. out on debt.Livius Drusus , July 26, 2018 at 7:46 pm
> These young people do not think of things like debt-free college or paid family leave as radical: they see it done elsewhere in the world and don't accept that it can't be done in America.
An unexpected consequence of globalization is that a lot of people see how thing are done, elsewhere.
Part of me doesn't feel sorry at all for the plight of middle-class Americans. When times were good they were happy to throw poor and working-class people under the bus. I remember when the common answer to complaints about factory closings was "you should have gotten an education, dummy." Now that the white-collar middle class can see that they are next on the chopping block they are finding their populist soul.
At the end of the day we need to have solidarity between workers but this is a good example of why you should never think that you are untouchable and why punching down is never a good political strategy. There will always be somebody more powerful than you and after they are done destroying the people at the bottom you will probably be next.
Jul 23, 2018 | www.theguardian.com
An economic system that rewards psychopathic personality traits has changed our ethics and our personalities.Thirty years of neoliberalism, free-market forces and privatisation have taken their toll, as relentless pressure to achieve has become normative. If you're reading this sceptically, I put this simple statement to you: meritocratic neoliberalism favours certain personality traits and penalises others.
There are certain ideal characteristics needed to make a career today. The first is articulateness, the aim being to win over as many people as possible. Contact can be superficial, but since this applies to most human interaction nowadays, this won't really be noticed.
It's important to be able to talk up your own capacities as much as you can – you know a lot of people, you've got plenty of experience under your belt and you recently completed a major project. Later, people will find out that this was mostly hot air, but the fact that they were initially fooled is down to another personality trait: you can lie convincingly and feel little guilt. That's why you never take responsibility for your own behaviour.
On top of all this, you are flexible and impulsive, always on the lookout for new stimuli and challenges. In practice, this leads to risky behaviour, but never mind, it won't be you who has to pick up the pieces. The source of inspiration for this list? The psychopathy checklist by Robert Hare , the best-known specialist on psychopathy today.
This description is, of course, a caricature taken to extremes. Nevertheless, the financial crisis illustrated at a macro-social level (for example, in the conflicts between eurozone countries) what a neoliberal meritocracy does to people. Solidarity becomes an expensive luxury and makes way for temporary alliances, the main preoccupation always being to extract more profit from the situation than your competition. Social ties with colleagues weaken, as does emotional commitment to the enterprise or organisation.
Bullying used to be confined to schools; now it is a common feature of the workplace. This is a typical symptom of the impotent venting their frustration on the weak – in psychology it's known as displaced aggression. There is a buried sense of fear, ranging from performance anxiety to a broader social fear of the threatening other.
Constant evaluations at work cause a decline in autonomy and a growing dependence on external, often shifting, norms. This results in what the sociologist Richard Sennett has aptly described as the "infantilisation of the workers". Adults display childish outbursts of temper and are jealous about trivialities ("She got a new office chair and I didn't"), tell white lies, resort to deceit, delight in the downfall of others and cherish petty feelings of revenge. This is the consequence of a system that prevents people from thinking independently and that fails to treat employees as adults.
More important, though, is the serious damage to people's self-respect. Self-respect largely depends on the recognition that we receive from the other, as thinkers from Hegel to Lacan have shown. Sennett comes to a similar conclusion when he sees the main question for employees these days as being "Who needs me?" For a growing group of people, the answer is: no one.
Our society constantly proclaims that anyone can make it if they just try hard enough, all the while reinforcing privilege and putting increasing pressure on its overstretched and exhausted citizens. An increasing number of people fail, feeling humiliated, guilty and ashamed. We are forever told that we are freer to choose the course of our lives than ever before, but the freedom to choose outside the success narrative is limited. Furthermore, those who fail are deemed to be losers or scroungers, taking advantage of our social security system.
A neoliberal meritocracy would have us believe that success depends on individual effort and talents, meaning responsibility lies entirely with the individual and authorities should give people as much freedom as possible to achieve this goal. For those who believe in the fairytale of unrestricted choice, self-government and self-management are the pre-eminent political messages, especially if they appear to promise freedom. Along with the idea of the perfectible individual, the freedom we perceive ourselves as having in the west is the greatest untruth of this day and age.
The sociologist Zygmunt Bauman neatly summarised the paradox of our era as: "Never have we been so free. Never have we felt so powerless." We are indeed freer than before, in the sense that we can criticise religion, take advantage of the new laissez-faire attitude to sex and support any political movement we like. We can do all these things because they no longer have any significance – freedom of this kind is prompted by indifference. Yet, on the other hand, our daily lives have become a constant battle against a bureaucracy that would make Kafka weak at the knees. There are regulations about everything, from the salt content of bread to urban poultry-keeping.
Our presumed freedom is tied to one central condition: we must be successful – that is, "make" something of ourselves. You don't need to look far for examples. A highly skilled individual who puts parenting before their career comes in for criticism. A person with a good job who turns down a promotion to invest more time in other things is seen as crazy – unless those other things ensure success. A young woman who wants to become a primary school teacher is told by her parents that she should start off by getting a master's degree in economics – a primary school teacher, whatever can she be thinking of?
There are constant laments about the so-called loss of norms and values in our culture. Yet our norms and values make up an integral and essential part of our identity. So they cannot be lost, only changed. And that is precisely what has happened: a changed economy reflects changed ethics and brings about changed identity. The current economic system is bringing out the worst in us.
tocq1 , 7 Aug 2014 22:21Panic attacks, anxiety attacks, nervous breakdowns, depression, suicidal thoughts alienation, cancers, withdrawal are all symptoms of the de-humanizing aspects of a market-driven life. In its worst forms it manifests periodically in mass shootings at strangers. So what do people do to cope? Drugs, pain killers, shrinks, alcohol, potato chips and soda. They then develop obesity, diabetes and heart diseases and cancers. How to save a human species terminally intoxicated with technology and enslaved by the market while the inner spirit is running empty may not be possible given the advanced nature of the disease.Gary Walker -> NotForTurning , 7 Aug 2014 19:59...what?zii000 , 7 Aug 2014 18:25
You fail to really acknowledge that time and again we've failed to exercise constrain within the capitalist models. The the meritorious are often inadequately rewarded - when any person in work cannot afford to home and feed themselves and their family then a reasonable balance has not been struck - in that sense at no time in history has capitalism functioned adequately.
To suggest that socialism is anti-human is to ignore how and why as a species we formed societies at all, we come together precisely because there is a mutual benefit in so doing; to help another is to help oneself - the model itself fails to operate in practice for the same reason that capitalism does - the greed of the power holder.
You reserve your sharpest barbs for socialism, but at least within the socialist agenda there is a commitment to the protection of the citizen, whoever they are, even the 'unmerited' as you describe them - a capitalist's paraphrase for 'those that create no value'.
The socialist at least recognises that whilst the parent may be 'unmerited' their dependants should be entitled to receive equality of opportunity and protection from the 'law-of-the-jungle' i.e., the greed of others.
The ability to generate wealth, simply by already having wealth and therefore being able to thrive off the labour of others carries little merit as far as I can tell and does indeed create the soul-crushing command-and-control empires of the capitalism that millions around the world experience daily.Neoliberalism is indeed a huge self-serving con and ironically the Thatcher/Regan doctrine which set out to break the status quo and free the economy from the old elitist guard has had exactly the opposite effect.camllin , 7 Aug 2014 17:58Capitalism cannot differentiate between honest competition and cheating. Since humans will cheat to win, capitalism has become survival of the worst not the best.TheBBG , 7 Aug 2014 17:51The bottom line is the basic human condition prizes food, shelter, sex, and then goes directly to greed in most modern societies. It was not always that way, and is not that way in ever fewer societies. As it is, greed makes the world go around.Jon Allan , 7 Aug 2014 17:44
In capitalistic societies greed has been fed by business and commerce; in communist societies it has been "some pigs are more equal then others"; and in dictatorships or true monarchies (or the Australian Liberal Party) there is the born to rule mentality where there are rulers and serfs.Nobody ever seems to address the paradox of the notion of an absolute free market: that within a free market, those who can have the freedom to exploit do exploit, thereby thus eliminating the freedom of the exploited, which thence paradoxically negates the absoluteness of the free market. No absolute freedom truly exist in a free market.Colin Bennett , 7 Aug 2014 17:06
As such, the free market is pipe dream - a con - to eliminate regulations and create economic freedoms only where they benefit the elite. The free market does not exist, is impossible, and therefore should cease to be held as the harbinger of a progressive socio economic reality.
If we are to accept the Christian assumption that we, humans, are all self-serving and acquisitive, then we must, therefore, negate the possibility of an absolutely "free" market, since exploitation is a naturally occurring byproduct of weak-strong interactions. Exploitation negates freedom, and therefore, it must be our reality, as it is in all peoples' best interests, to accept directly democratic regulations as the keystone to any market.It sounds very like the Marxist critique of capital. And similarly, points to real problems, but doesn't seek evidence for why such a sick situation not only persists, but is so popular - except by denigrating 'the masses'.pinkrobbo -> Jim Greer , 7 Aug 2014 16:06
Surely what is particular about our time, about industrialisation generally, is the fragmenting of long term social structures, and orientation around the individual alone. It seems to me the problem of our times is redeveloping social structures which balance the individual and the socials selves, as all not merely stable but thriving happy creative societies, have always done.Their propaganda is the same- an obsessive hatred of the state in any form, a semi-religious belief in the power of the individual operating in the free-market to solve humanity's ills.makingtime -> YoungPete , 7 Aug 2014 13:28
Granted, they aren't social libertarians, but then, in the US, libertarians don't seem to be either.Richard McDonough , 7 Aug 2014 13:20
Pretty typical that the assumption is the Marx "nailed it" and any dissenters are just "scared".
I'm scared by it too, as I said, it's a sensible fear of change. The question remains. What if Marx's analysis, just the analysis, is broadly correct? What if markets really are the road to ruination of our planet, morality and collective welfare in roughly the way that he explained?
It's not a trivial question, and clearly the current economic orthodoxy has failed to explain some recent little problems we've been having, while Marx explains how these problems are structurally embedded and only to be expected. It is intellectual cowardice to compulsively avoid this, in my view. Better minds than ours have struggled with it.
So beware of the fallacious argument from authority - 'You are stupid while I am axiomatically very clever, because I say so, hence I must be correct and you must shut it.' It goes nowhere useful, though we are all prone to employing it.
But it is not 'sixth form' thinking, surely, to consider these problems as being worth thinking about in a modern context. It is a plain fact that Stalinism didn't work as planned. We know it, but it doesn't make the problems it was intended to solve disappear to say so.
If you believe human nature can be changed by enforcing your interpretation of Marx's road to human freedom (a quasi-religious goal) you condemn millions to starvation, slaughter, gulags, misery etc.
Please read what I actually wrote about that. I'm not remotely quasi-religious, nor do I seek to enforce anything. My intention is only to expose a particularly damaging mythology. The extent of my crimes is persuasion as a prelude to consensual change before necessity really bites us all.
Markets conjure up the exact forms of misery you describe. Totalitarians of the right are highly undesirable too. I am against totalitarians, as are you, but an admirer of Marx's work. Do I fit into your simplistic categories? Does anyone? The freedoms we are permitted serve the market before they serve people. Markets are a social construct, as is capital, that we can choose to modify or squash. A child starving in a slum for lack of competitiveness, for its inability to serve the interests of capital, is less abstract perhaps.Clintons are neoliberalss and about to be embraced by the neocons in foreign policy.Serpentsarecreeps , 7 Aug 2014 12:15
Reagan lives in a pan suit.The thing about selfishness and a brutal form of dog eat dog capitalism.yourmiddleclassfarce , 7 Aug 2014 11:46
You see, it is a truth axiomatic that we human beings, as all living beings, are fundamentally selfish. We have to be in order to survive, and excel, and advance and perpetuate.
It is not theory but hard biology. You breathe for yourself, eat for yourself, love for yourself, have a family for yourself and so on. People are most affected and hurt if something happens to something or someone who means something to them personally. This is why concepts such as religion and nationality have worked so well, and will continue to even if they evolve in different ways, for they tap into a person's conception of theirself. Of their identity, of their self-definition. People tend to feel worse if something bad happens to someone they know than to a stranger; people tend to feel less bad when something happens to a cockroach than to a dog, simply because we relate better to dogs than to insects...So even our compassion is selfish after a fashion.
Capitalism and Socialism are two ends of the the same human spectrum of innate and hardwired selfishness. One stresses on the individual and the other on the larger group. It's always going to be hard to find the right balance because when you vest excessive power in any selfish ideology, it will begin to eat into the other type of selfishness..
The world revolves around competing selfishnesses...The global economy is based upon wasting lives and material resources.Serpentsarecreeps , 7 Aug 2014 11:34
Designer landfill is no longer an option and neo-liberalism, which places importance of the invention called money over that of people (which is a dehumanising process), was never an option.
It is time for the neo-liberal fake politicians (that is 99.99% of them) to take up politics.
It really is, as ever since it is only another word for change, time for revolution.Excellent article by one of my favourite writers on this site! :)steverandomno -> richterscalemadness , 7 Aug 2014 11:32LastNameOnTheShelf , 7 Aug 2014 11:27
By extension, moving away from a system the shuns those who 'fail' people would be emotionally better off, and with the removal of the constant assessment and individualistic competition, people may feel better able to relate to one another. This would imply that healthy communities would be more likely to flourish, as people would be less likely to ignore those on lower income or of 'lower status'.
Move to what system? What system would achieve this?
Whether you agree or not, it is pretty clear what was being said.
Of course it's clear. George and his followers dislike market based systems. It couldn't be clearer. Even when the subject has little to do with the market, George and his followers always blame it for everything that is wrong with this world. That's pretty much the whole point of this article.
What's never clear is what alternative George and his followers propose that wouldn't result in all of the same flaws that accompany market driven systems. How can they be so sure some of those problems won't be worse? They always seem a bit sketchy, which is remarkable given the furor with which they relentlessly critique the market. We are told of alternatives concepts painted in the broadest of brushes, rich with abstract intangible idealism, but lacking in any pragmatism. We are invited to consider the whole exercise simply as academically self-indulgent navel gazing by the priviledged overeducated minority that comprise much of the Guardian's readership. It's quite disappointing. This article correctly details much of the discontent in the world. But this isn't a revelation. Where are the concrete ideas that can actualy be implemented now?
frontalcortexes at least makes a stab at something a bit more practicle than a 17 paragraph esoteric essay citing ancient Greek.One of the worst thing is that the winners in the market race are showered with things which are fundamentally valueless and far in excess of what they could consume if they weren't, while bare necessities are withheld from the losers.fractals -> Guardiansofwhatnow , 7 Aug 2014 11:12of course, the nature of 'the market' means that all of our ipads and television sets will be obsolete within a year or 2.
Jun 06, 2018 | profile.theguardian.com
AsDusty, 3 Jun 2018 17:43Half the population prefers a politics that is racist and unethical, that demonises the poor and idolises the rich, that eschews community and embraces amoral individuality. These people don't care about the economic inconsistencies of neo-liberalism, they are far more attracted to the divisive societal aspects of free market fundamentalism.
Jun 06, 2018 | discussion.theguardian.com
ellaquint , 3 Jun 2018 19:35
Like Joe Hockey, Rinehart saw the problem of inequality as having more to do with the character of the poor than with the rules of the game:
They don't "see" it this way. They just say they see it this way to perpetuate that inequality. They know that their wealth depends on the labour of the other 95-99%.
To keep us all working and voting for their lackeys, they make promises of wealth if you are a persistent hard worker, never mentioning that the entire game depends on only a tiny minority ever reaching the top. No, the real people holding them back are those who don't work hard. Who don't contribute to the game. They're the ones to blame for why you're not levelling up. The true scapegoats.
It's one giant con and they know it.
Jun 06, 2018 | discussion.theguardian.com
reinhardpolley , 3 Jun 2018 17:18Victim blaming is a classic neo-con tactic, they seek to deflect from the impact of their heartless policies by demonising the victims, from the unemployed and those stuck in the welfare cycle to refugees trapped in offshore detention, indefinitely . We've all seen how appalling their commentary can get, from Abbott and Hockey's "lifters and leaners" to Gina Mineheart's "two dollars a day" & "spend less time drinking or smoking and socialising" they show just how out touch they are. They honestly believe that people can lift themselves out of poverty if only they "spent more time working", ignoring the fact that many are working two jobs just to stay ahead.OrwelHasNothingOnLNP -> w roberts , 3 Jun 2018 17:00
Seems that on planet RWNJ there are more than 24 hours in a day..Half the population need welfare to survive.
1% have 90% of all the toys in the sandpit and won't share. They feel that they are entitled to all the toys.
Jun 06, 2018 | discussion.theguardian.com
maven501 , 3 Jun 2018 22:54This piece is well worth the reading particularly in light of the trashing of society's values we see played out in Trump's America. However, the writer's definition of "ideology " as a "system of ideas and ideals" even though it accords with the OED's, fails to take into account the current pernicious influence of the ideologue who distorts "ideology" into the "rationalisation of a suppression" as Joseph Dunne noted in his book, " Back to the Rough Ground" .
This is the most apt description of the modus operandi of today's neoliberalists - the justifying of their project to maximise wealth accumulation in their own self-interest by promoting the propaganda that we are powerless cogs in the machine of the economy , slaves to the whim of the omnipotent market, rather than active agents who wish to contribute to a flourishing society .
Neoliberalism idealises competition against each other to ensure the rights of the few, by suppressing our capacity to take responsibility together through cooperation and collaboration with each other.
This classic divide and conquer tactic will prevail only as long as we permit it.
Time to take a stand and be counted.
Jun 06, 2018 | discussion.theguardian.com
DickTyger , 27 Apr 2018 00:27I'm a conservative and I have an good economics degree. I have to say though that I don't understand neoliberalism at all.
As a example, when I was doing economics it was made very clear to me that natural monopolies (such as electricity and water) cannot be made into a competitive market (rather like trying to put lipstick on a pig). Similarly oligopolies introduce opportunities for price manipulation (e.g. the banks). The neoliberal mantra that "markets are always right" is just rubbish. Markets work well only when certain criteria are met.
Secondly, the right of workers to collectively bargain is fundamental to a well functioning market economy. Labour is one of the inputs to production and the workers have a right to a proper return on their labour. Individual workers have no real bargaining power and can only act collectively through unions.
Finally, the related casualisation of the workforce is a disaster for workers and the long-term interests of the economy. The stagnation of wages (and inflation) is one of the products of this strong trend to casualisation (my blood boils when I hear of examples of wage theft affecting vulnerable workers).
Income inequality is a product of a capitalist system. However, when the distribution of wealth becomes very badly skewed (such as in the USA) then the political system starts to break down. Trump was a beneficiary of this flawed income distribution. All Hillary Clinton was promising was "more of the same". In short, Bernie Sanders was right.
Walter Schadel, in his book, The Great Leveler (see below), points to the role of income inequality in driving revolutions and disruptions. There are lessons in this book for our current crop of politicians both on the left and the right.
May 20, 2018 | www.nakedcapitalism.com
bruce wilder , May 18, 2018 at 4:45 pm
In reply to several commenters, who have questioned why "neoliberalism" is not simply another name for the political expression/ambitions of the greed of the rich-and-powerful, aka conservatism.
Although it serves the purposes of the rich-and-powerful rather well, I think "neoliberalism" as a rhetorical engine and set of ideas is the ideology of the 9.9%, the chattering classes of professionals and bureaucrats who need a cover story for their own participation in running the world for the benefit of the 0.1% These are the people who need to rationalize what they do and cooperate and coordinate among themselves and that's a challenge because of their sheer numbers.
If you try to examine neoliberalism as a set of aims or values or interests, I think you miss the great accomplishment of neoliberalism as a mechanism of social cooperation. Neoliberalism says it aims at freedom and social welfare and innovation and other good things. If neoliberalism said it aimed to make the richest 0.1% richer at the expense of everyone else, it would provoke political opposition from the 99% for obvious reasons. Including opposition from the 9.9% whom they need to run things, to run the state, run the corporations.
Not being clear on what your true objectives are tends to be an obstacle to organizing large groups to accomplish those objectives. Being clear on the mission objective is a prerequisite for organizational effectiveness in most circumstances. The genius of neoliberalism is such that it is able to achieve a high degree of coordination in detail across large numbers of people, institutions, even countries while still professing aims and values to which few object. A high degree of coordination on implementing a political policy agenda that is variously parasitical or predatory on the 90%.
You can say this is just hypocrisy of a type the rich have always engaged in, and that would be true. The predatory rich have always had to disguise their predatory or parasitical activity, and have often done so by embracing, for example, shows of piety or philanthropy. So, neoliberalism falls into a familiar albeit broad category.
What distinguishes neoliberalism is how good it is at coordinating the activities of the 9.9% in delivering the goods for the 0.1%. For a post-industrial economy, neoliberalism is better for the mega-rich than Catholicism was for the feudalism of the High Middle Ages. I do not think most practicing neoliberals among the 9.9% even think of themselves as hypocrites.
"Free markets" has been the key move, the fulcrum where anodyne aims and values to which no one can object meet the actual detailed policy implementation by the state. Creating a "market" removes power and authority from the state and transfers it to private actors able to apply financial wealth to managing things, and then, because an actual market cannot really do the job that's been assigned, a state bureaucracy has to be created to manage the administrative details and financial flows -- work for the 9.9%
As a special bonus, the insistence on treating a political economy organized in fact by large public and private bureaucracies as if it is organized by and around "markets" introduces a high degree of economic agnatology into the conventional political rhetoric.
[This comment sounded much clearer when I conceived of it in the shower this morning. I am sorry if the actual comment is too abstract or tone deaf. I will probably have to try again at a later date.]
Apr 12, 2018 | nyupress.org
It is difficult to ignore the cross-cultural parallels prompted by the growth of neoliberalism, an economic and moral philosophy in which sociologist Zygmunt Bauman notes, "the responsibilities for resolving the quandaries generated by vexingly volatile and constantly changing circumstances is shifted onto the shoulders of individuals -- who are now expected to be 'free choosers' and to bear in full the consequences of their choices" (Bauman 2007:3–4). Bauman essentially argues that neoliberalism's deceptively seductive offer of increased individual choice comes at a heavy price, rendering individuals more and more vulnerable.
Neoliberal economic policies have increasingly impacted individual lives throughout the world through the unprecedented untethering of workers and the workplace so that those in positions of power and privilege have less direct contact with or responsibility for those who work at the lowest levels of the same industry. Such new labor practices are a constant reminder to workers that they are expendable, easily replaced, and thus not in a position to negotiate the terms and conditions under which their labor is carried out.
Such vulnerability is even more pronounced for those who already inhabit the margins of social life because of their poverty or other forms of social exclusion. This is particularly true for situations wherein particular types of state-endorsed socioeconomic inequalities create a larger pool of feminized labor that is typically lower paid, less respected, and less able to u
Mar 18, 2018 | craigmurray.org.uk
SA , March 16, 2018 at 07:20Mochyn69 , March 16, 2018 at 02:44
I agree with you. But there is more, much more. There was an 8 part drama series on the. BBC called McMafia showing how criminality including arms and narcotics and so on, is closely linked to the Russian state. Then there was a series of very superficial BBC programmes, one on Putin as a new Tsar (sic) and the other on the elections with a spotlight on Navalny. Radio 4 is constantly almost daily talking about Russian aggression and of course there is the vilification of Russian athletes and the drugs.
The general idea has been to isolate Russia and to make it so hard for anyone to defend Russia. This extends to the media. Whereas lots of articles on Russia and Syria were open to comments in the Guardian and lots of people write and disagree with the constant propaganda it is now rare to have these open to comment. Any questions is always dominated by anti Russia and anti SAG rhetoric.
It is a constant psyop that is gathering momentum. I am sure the use of nerve agent is a not so subtle way of linking Russia with what is supposedly happening in Syria.
But as we know that the supposed use of chemical weapons is a series of false flags then the same may apply here.james , March 16, 2018 at 02:52
"The sanctions today are a grievous disappointment, and fall far short of what is needed to respond to that attack on our democracy, let alone deter Russia's escalating aggression, which now includes a chemical weapons attack on the soil of our closest ally," Adam Schiff, the top Democrat on the House intelligence committee said in a statement.
So thanks to to the toxic tory blatant propaganda it's now an accepted fact in US Democrats minds that it was the Russians wot done it as they push for tougher sanctions against Russia.
There might just be an answer to the cui bono question somewhere in there. Just maybe, but I'm not rushing to judgement!
just remember it was the usa/uk under bush/blair that had all the info needed to attack iraq in 2003 so much for any lesson learned in any of that, or this at present the political class remain in the gutter serving the military-financial-energy complex of course these special interest groups would have it no other way as war=money what's a few dead people to get in the way of making a killing off the next war, or preparation for war? i heard porton down was given a few $ in the past day or two as well lets keep those chemists busy
Feb 12, 2017 | economistsview.typepad.comanne : February 11, 2017 at 11:43 AM , 2017 at 11:43 AMhttp://www.yalelawjournal.org/article/amazons-antitrust-paradox
Amazon's Antitrust Paradox
By Lina M. Khan
Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm's structure and conduct pose anticompetitive concerns -- yet it has escaped antitrust scrutiny.
This Note argues that the current framework in antitrust-specifically its pegging competition to "consumer welfare," defined as short-term price effects-is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output.
Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational-even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.
This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.
Mar 20, 2011 | naked capitalism
Very good post. Thank you.
Over the past three decades, large parts of our culture here in the US have internalized the lessons of the new Social Darwinism, with a significant body of literature to explain and justify it. Many of us have internalized, without even realizing it, the ideas of "dog eat dog", "every man for himself", "society should be structured like the animal kingdom, where the weak and sick simply die because they cannot compete, and this is healthy", and "everything that happens to you is your own fault. There is no such thing as circumstance that cannot be overcome, and certainly no birth lottery."
The levers pulled by politicians and the Fed put these things into practice, but even if we managed get different (better) politicians or Fed chairmen, ones who weren't steeped in this culture and ideology, we'd still be left with the culture in the population at large, and things like the "unemployed stigma" are likely to die very, very hard. Acceptance of the "just-world phenomenon" here in the US runs deep.
"Religion is just as vulnerable to corporate capture as is the government or the academy."
This is rather rhetorical statement, and wrong one. One need to discern spiritual aspect of religion from the religion as a tool.
Religion, as is structured, is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institutions such as Supreme – and non-supreme – Court(s). It is a form of PR of the ruling class for the governing class.
Religion, just like human nature, is not that easy to put in a box.
For every example you can cite where religion "is complicit: in empoverishment, obedience, people's preconditioning, and legislative enabler in the institution," I can point to an example of where religion engendered a liberating, emancipatory and revolutionary spirit.
•Early Christianity •Nominalism •Early Protestantism •Gandhi •Martin Luther King
Now granted, there don't seem to be any recent examples of this of any note, unless we consider Chris Hedges a religionist, which I'm not sure we can do. Would it be appropriate to consider Hedges a religionist?
Yes, that maybe, just maybe be the case in early stages of forming new religion(s). In case of Christianity old rulers from Rome were trying to save own head/throne and the S.P.Q.R. imperia by adopting new religion.
You use examples of Gandhi and MLK which is highly questionable both were fighters for independence and the second, civil rights. In a word: not members of establishment just as I said there were (probably) seeing the religion as spiritual force not tool of enslavement.
This link may provide some context:
In particular, there seems to be an extremely popular variant of the above where the starting proposition "God makes moral people rich" is improperly converted to "Rich people are more moral" which is then readily negated to "Poor people are immoral" and then expanded to "Poor people are immoral, thus they DESERVE to suffer for it". It's essentially the theological equivalent of dividing by zero
Poll after poll after poll has shown that a majority of Americans, and a rather significant majority, reject the values, attitudes, beliefs and opinions proselytized by the stealth religion we call "neoclassical economics."
That said, the ranks of the neoliberals are not small. They constitute what Jonathan Schell calls a "mass minority." I suspect the neoliberals have about the same level of popular support that the Nazis did at the time of their takeover of Germany in 1932, or the Bolsheviks had in Russia at the time of their takeover in 1917, which is about 20 or 25% of the total population.
The ranks of the neoliberals are made to appear far greater than they really are because they have all but exclusive access to the nation's megaphone. The Tea Party can muster a handful of people to disrupt a town hall meeting and it gets coast to coast, primetime coverage. But let a million people protest against bank bailouts, and it is ignored. Thus, by manipulation of the media, the mass minority is made to appear to be much larger than it really is.
The politicians love this, because as they carry water for their pet corporations, they can point to the Tea Partiers and say: "See what a huge upwelling of popular support I am responding to."
Well, if that's true, then the unemployed are employable but the mass mediated mentality would like them to believe they are literally and inherently unemployable so that they underestimate and under-sell themselves.
This is as much to the benefit of those who would like to pick up "damaged goods" on the cheap as those who promote the unemployment problem as one that inheres in prospective employees rather than one that is a byproduct of a bad job market lest someone be tempted to think we should address it politically.
That's where I see this blame the unemployed finger pointing really getting traction these days.
I apologize for the fact that I only read the first few paragraphs of this before quitting in disgust.
I just can no longer abide the notion that "labor" can ever be seen by human beings as a "cost" at all. We really need to refuse to even tolerate that way of phrasing things. Workers create all wealth. Parasites have no right to exist. These are facts, and we should refuse to let argument range beyond them.
The only purpose of civilization is to provide a better way of living and for all people. This includes the right and full opportunity to work and manage for oneself and/or as a cooperative group. If civilization doesn't do that, we're better off without it.
I am one of those long term unemployed.
I suppose my biggest employment claim would be as some sort of IT techie, with numerous supply chain systems and component design, development, implementation, interfaces with other systems and ongoing support. CCNP certification and a history of techiedom going back to WEYCOS.
I have a patent (6,209,954) in my name and 12+ years of beating my head against the wall in an industry that buys compliance with the "there is no problem here, move on now" approach.
Hell, I was a junior woodchuck program administrator back in the early 70's working for the Office of the Governor of the state of Washington on CETA PSE or Public Service Employment. The office of the Governor ran the PSE program for 32 of the 39 counties in the state that were not big enough to run their own. I helped organize the project approval process in all those counties to hire folk at ( if memory serves me max of $833/mo.) to fix and expand parks and provide social and other government services as defined projects with end dates. If we didn't have the anti-public congress and other government leadership we have this could be a current component in a rational labor policy but I digress.
I have experience in the construction trades mostly as carpenter but some electrical, plumbing, HVAC, etc. also.
So, of course there is some sort of character flaw that is keeping me and all those others from employment ..right. I may have more of an excuse than others, have paid into SS for 45 years but still would work if it was available ..taking work away from other who may need it more .why set up a society where we have to compete as such for mere existence???????
One more face to this rant. We need government by the people and for the people which we do not have now. Good, public focused, not corporate focused government is bigger than any entities that exist under its jurisdiction and is kept updated by required public participation in elections and potentially other things like military, peace corps, etc. in exchange for advanced education. I say this as someone who has worked at various levels in both the public and private sectors there are ignorant and misguided folks everywhere. At least with ongoing active participation there is a chance that government would, once constructed, be able to evolve as needed within public focus .IMO.
Some people would say I have been unemployed for 10 years. In 2000 after losing the last of my four CFO gigs for public companies I found it necessary to start consulting. This has lead to two of my three biggest winning years. I am usually consulting on cutting edge area of my profession and many times have large staffs reporting to me that I bring on board to get jobs done. For several years I subcontacted to a large international consulting firm to clean up projects which went wrong. Let me give some insight here.
- First, most good positions have gate keepers who are professional recruiters. It is near impossible to get by them and if you are unemployed they will hardly talk to you. One time talking to a recruiter at Korn Fery I was interviewing for a job I have done several times in an industry I have worked in several times. She made a statement that I had never worked at a well known company. I just about fell out of my chair laughing. At one time I was a senior level executive for the largest consulting firm in the world and lived on three continents and worked with companies on six. In addition, I had held senior positions for 2 fortune 500 firms and was the CFO for a company with $4.5 billion in revenue. I am well known at several PE firms and the founder of one of the largest mentioned in a meeting that one of his great mistakes was not investing in a very successful LBO (return of in excess of 20 multiple to investors in 18 months) I was the CFO for. In a word most recruiters are incompetent.
- Second, most CEO's any more are just insecure politicians. One time during an interview I had a CEO asked me to talk about some accomplishments. I was not paying to much attention as I rattled off accomplishments and the CEO went nuclear and started yelling at me that he did not know where I thought I was going with this job but the only position above the CFO job was his and he was not going anywhere. I assured him I was only interested in the CFO position and not his, but I knew the job was over. Twice feed back that I got from recruiters which they took at criticism was the "client said I seemed very assured of myself."
- Third, government, banking, business and the top MBA schools are based upon lying to move forward. I remember a top human resource executive telling me right before Enron, MCI and Sarbanes Oxley that I needed to learn to be more flexible. My response was that flexibility would get me an orange jump suit. Don't get me wrong, I have a wide grey zone, but it use to be in business the looked for people who could identify problems early and resolve them. Now days I see far more of a demand for people who can come up with PR spins to hide them. An attorney/treasurer consultant who partnered with me on a number of consulting jobs told me some one called me "not very charming." He said he asked what that meant, and the person who said that said, "Ish walks into a meeting and within 10 minutes he is asking about the 10,000 pound guerilla sitting in the room that no one wants to talk about." CEO do not want any challenges in their organization.
- Fourth, three above has lead to the hiring of very young and inexperienced people at senior levels. These people are insecure and do not want more senior and experienced people above them and than has resulted in people older than 45 not finding positions.
- Fifth, people are considered expendable and are fired for the lamest reasons anymore. A partner at one of the larger and more prestigious recruiting firms one time told me, "If you have a good consulting business, just stick with it. Our average placement does not last 18 months any more." Another well known recruiter in S. Cal. one time commented to me, "Your average consulting gig runs longer than our average placement."
With all of that said, I have a hard time understanding such statements as "@attempter "Workers create all wealth. Parasites have no right to exist." What does that mean? Every worker creates wealth. There is no difference in people. Sounds like communism to me. I make a good living and my net worth has grown working for myself. I have never had a consulting gig terminated by the client but I have terminated several. Usually, I am brought in to fix what several other people have failed at. I deliver basically intellectual properties to companies. Does that mean I am not a worker. I do not usually lift anything heavy or move equipment but I tell people what and where to do it so does that make me a parasite.
Those people who think everyone is equal and everyone deserves equal pay are fools or lazy. My rate is high, but what usually starts as short term projects usually run 6 months or more because companies find I can do so much more than what most of their staff can do and I am not a threat.
I would again like to have a senior challenging role at a decent size company but due to the reasons above will probably never get one. However, you can never tell. I am currently consulting for a midsize very profitable company (grew 400% last year) where I am twice the age of most people there, but everyone speaks to me with respect so you can never tell.
Ishmael, you're quite right. When I showed my Italian husband's resume to try and "network" in the US, my IT friends assumed he was lying about his skills and work history.
Contemporaneously, in Italy it is impossible to get a job because of incentives to hire "youth". Age discrimination is not illegal, so it's quite common to see ads that ask for a programmer under 30 with 5 years of experience in COBOL (the purple squirrel).
Some good points about the foolishness of recruiters, but a great deal of that foolishness is forced by the clients themselves. I used to be a recruiter myself, including at Korn Ferry in Southern California. I described the recruiting industry as "yet more proof that God hates poor people" because my job was to ignore resumes from people seeking jobs and instead "source" aka "poach" people who already had good jobs by dangling a higher salary in front of them. I didn't do it because I disparaged the unemployed, or because I could not do the basic analysis to show that a candidate had analogous or transferrable skills to the opening.
I did it because the client, as Yves said, wanted people who were literally in the same job description already. My theory is that the client wanted to have their ass covered in case the hire didn't work out, by being able to say that they looked perfect "on paper." The lesson I learned for myself and my friends looking for jobs was simple, if morally dubious. Basically, that if prospective employers are going to judge you based on a single piece of paper take full advantage of the fact that you get to write that piece of paper yourself.
Hosswire - I agree with your comment. There are poor recruiters like the one I sited but in general it is the clients fault. Fear of failure. All hires have at least a 50% chance of going sideways on you. Most companies do not even have the ability to look at a resume nor to interview. I did not mean to same nasty things about recruiters, and I even do it sometimes but mine.
I look at failure in a different light than most companies. You need to be continually experimenting and changing to survive as a company and there will be some failures. The goal is to control the cost of failures while looking for the big pay off on a winner.
As a former recruiter and HR "professional" (I use that term very loosely for obvious reasons), I can honestly say that you nailed it. Most big companies looking for mid to high level white collar "talent" will almost always take the perceived safest route by hiring those who look the best ON PAPER and in a suit and lack any real interviewing skills to find the real stars. What's almost comical is that companies almost always want to see the most linear resume possible because they want to see "job stability" (e.g. a CYA document in case the person fails in that job) when in many cases nobody cares about the long range view of the company anyway. My question was why should the candidate or employee care about the long range view if the employer clearly doesn't?
Manwhich another on point comment. Sometimes either interviewing for a job or consulting with a CEO it starts getting to the absurd. I see all the time the requirement for stability in a persons background. Hello, where have they been the last 15 years. In addition, the higher up you go the more likely you will be terminated sometime and that is especially true if you are hired from outside the orgnanization. Companies want loyalty from an employee but offer none in return.
The average tenure for a CFO anymore is something around 18 months. I have been a first party participant (more than once) where I went through an endless recruiting process for a company (lasting more than 6 months) they final hire some one and that person is with the company for 3 months and then resigns (of course we all know it is through mutual agreement).
The real problem has become and maybe this is what you are referring to is the "Crony Capitalism." We have lost control of our financial situation. Basically, PE is not the gods of the universe that everyone thinks they are. However, every bankers secret wet dream is to become a private equity guy. Accordingly, bankers make ridiculous loans to PE because if you say no to them then you can not play in their sand box any more. Since the govt will not let the banks go bankrupt like they should then this charade continues inslaving everyone.
This country as well as many others has a large percentage of its assets tied up in over priced deals that the bankers/governments will not let collapse while the blood sucking vampires suck the life out of the assets.
On the other hand, govt is not the answer. Govt is too large and accomplishes too little.
kevin de bruxelles:
The harsh reality is that, at least in the first few rounds, companies kick to the curb their weakest links and perceived slackers. Therefore when it comes time to hire again, they are loath to go sloppy seconds on what they perceive to be some other company's rejects. They would much rather hire someone who survived the layoffs working in a similar position in a similar company. Of course the hiring company is going to have to pay for this privilege. Although not totally reliable, the fact that someone survived the layoffs provides a form social proof for their workplace abilities.
On the macro level, labor has been under attack for thirty years by off shoring and third world immigration. It is no surprise that since the working classes have been severely undermined that the middle classes would start to feel some pressure. By mass immigration and off-shoring are strongly supported by both parties. Only when the pain gets strong enough will enough people rebel and these two policies will be overturned. We still have a few years to go before this happens.
Let's say I run a factory. I produce cars and it requires very skilled work. Skilled welding, skilled machinists. Now I introduce some robotic welders and an assembly line system. The plants productivity improves and the jobs actually get easier. They require less skill, in fact I've simplified each task to something any idiot can do. Would wages go up or down? Are the workers really contributing to that increase in productivity or is it the machines and methods I created?
Lets say you think laying off or cutting the wages of my existing workers is wrong. What happens when a new entrant into the business employs a smaller workforce and lower wages, which they can do using the same technology? The new workers don't feel like they were cut down in any way, they are just happy to have a job. Before they couldn't get a job at the old plant because they lacked the skill, but now they can work in the new plant because the work is genuinely easier. Won't I go out of business?
I am 54 and have a ton of peers who are former white collar workers and professionals (project managers, architects, lighting designers, wholesalers and sales reps for industrial and construction materials and equipment) now out of work going on three years. Now I say out of work, I mean out of our trained and experienced fields.
We now work two or three gigs (waiting tables, mowing lawns, doing free lance, working in tourism, truck driving, moving company and fedex ups workers) and work HARD, for much much less than we did, and we are seeing the few jobs that are coming back on line going to younger workers. It is just the reality. And for most of us the descent has not been graceful, so our credit is a wreck, which also breeds a whole other level of issues as now it is common for the credit record to be a deal breaker for employment, housing, etc.
Strangely I don't sense a lot of anger or bitterness as much as humility. And gratitude for ANY work that comes our way. Health insurance? Retirement accounts? not so much.
Yves and I have disagreed on how extensive the postwar "pact" between management and labor was in this country. But if you drew a line from say, Trenton-Patterson, NJ to Cincinatti, OH to Minneapolis, MN, north and east of it where blue collar manufacturing in steel, rubber, auto, machinery, etc., predominated, this "pact" may have existed but ONLY because physical plant and production were concentrated there and workers could STOP production.
Outside of these heavy industrial pockets, unions were not always viewed favorably. As one moved into the rural hinterlands surrounding them there was jealously and/or outright hostility. Elsewhere, especially in the South "unions" were the exception not the rule. The differences between NE Ohio before 1975 – line from Youngstown to Toledo – and the rest of the state exemplified this pattern. Even today, the NE counties of Ohio are traditional Democratic strongholds with the rest of the state largely Republican. And I suspect this pattern existed elsewhere. But it is changing too
In any case, the demonization of the unemployed is just one notch above the vicious demonization of the poor that has always existed in this country. It's a constant reminder for those still working that you could be next – cast out into the darkness – because you "failed" or worse yet, SINNED. This internalization of the "inner cop" reinforces the dominant ideology in two ways. First, it makes any resistance by individuals still employed less likely. Second, it pits those still working against those who aren't, both of which work against the formation of any significant class consciousness amongst working people. The "oppressed" very often internalize the value system of the oppressor.
As a nation of immigrants ETHNICITY may have more explanatory power than CLASS. For increasingly, it would appear that the dominant ethnic group – suburban, white, European Americans – have thrown their lot in with corporate America. Scared of the prospect of downward social mobility and constantly reminded of URBAN America – the other America – this group is trapped with nowhere to else to go.
It's the divide and conquer strategy employed by ruling elites in this country since its founding [Federalist #10] with the Know Nothings, blaming the Irish [NINA - no Irish need apply] and playing off each successive wave of immigrants against the next. Only when the forces of production became concentrated in the urban industrial enclaves of the North was this strategy less effective. And even then internal immigration by Blacks to the North in search of employment blunted the formation of class consciousness among white ethnic industrial workers.
Wherever the postwar "pact of domination" between unions and management held sway, once physical plant was relocated elsewhere [SOUTH] and eventually offshored, unemployment began to trend upwards. First it was the "rustbelt" now it's a nationwide phenomenon. Needless to say, the "pact" between labor and management has been consigned to the dustbin of history.
White, suburban America has hitched its wagon to that of the corporate horse. Demonization of the unemployed coupled with demonization of the poor only serve to terrorize this ethnic group into acquiescence. And as the workplace becomes a multicultural matrix this ethnic group is constantly reminded of its perilous state. Until this increasingly atomized ethnic group breaks with corporate America once and for all, it's unlikely that the most debilitating scourge of all working people – UNEMPLOYMENT – will be addressed.
Make no mistake about it, involuntary UNEMPLOYMENT/UNDEREMPLYEMT is a form of terrorism and its demonization is terrorism in action. This "quiet violence" is psychological and the intimidation wrought by unemployment and/or the threat of it is intended to dehumanize individuals subjected to it. Much like spousal abuse, the emotional and psychological effects are experienced way before any physical violence. It's the inner cop that makes overt repression unnecessary. We terrorize ourselves into submission without even knowing it because we accept it or come to tolerate it. So long as we accept "unemployment" as an inevitable consequence of progress, as something unfortunate but inevitable, we will continue to travel down the road to serfdom where ARBEIT MACHT FREI!
FULL and GAINFUL EMPLOYMENT are the ultimate labor power.
It's delicate since direct age discrimination is illegal, but when circumstances permit separating older workers they have a very tough time getting back into the workforce in an era of high health care inflation. Older folks consume more health care and if you are hiring from a huge surplus of available workers it isn't hard to steer around the more experienced. And nobody gets younger, so when you don't get job A and go for job B 2 weeks later you, you're older still!
Yves said- "This overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills"
In the IT job markets such postings are often called purple squirrels. The HR departments require the applicant to be expert in a dozen programming languages. This is an excuse to hire a foreigner on a temp h1-b or other visa.
Most people aren't aware that this model dominates the sciences. Politicians scream we have a shortage of scientists, yet it seems we only have a shortage of cheap easily exploitable labor. The economist recently pointed out the glut of scientists that currently exists in the USA.
This understates the problem. The majority of PhD recipients wander through years of postdocs only to end up eventually changing fields. My observation is that the top ten schools in biochem/chemistry/physics/ biology produce enough scientists to satisfy the national demand.
The exemption from h1-b visa caps for academic institutions exacerbates the problem, providing academics with almost unlimited access to labor.
The pharmaceutical sector has been decimated over the last ten years with tens of thousands of scientists/ factory workers looking for re-training in a dwindling pool of jobs (most of which will deem you overqualified.)
I wonder how the demonization of the unemployed can be so strong even in the face of close to 10% unemployment/20% underemployment. It's easy and tempting to demonize an abstract young buck or Cadillac-driving welfare queen, but when a family member or a close friend loses a job, or your kids are stuck at your place because they can't find one, shouldn't that alter your perceptions? Of course the tendency will be to blame it all on the government, but there has to be a limit to that in hard-hit places like Ohio, Colorado, or Arizona. And yet, the dynamics aren't changing or even getting worse. Maybe Wisconsin marks a turning point, I certainly hope it does
It's more than just stupid recruiting, this stigma. Having got out when the getting was good, years ago, I know that any corporate functionary would be insane to hire me now. Socialization wears off, the deformation process reverses, and the ritual and shibboleths become a joke. Even before I bailed I became a huge pain in the ass as economic exigency receded, every bosses nightmare. I suffered fools less gladly and did the right thing out of sheer anarchic malice.
You really can't maintain corporate culture without existential fear – not just, "Uh oh, I'm gonna get fired," fear, but a visceral feeling that you do not exist without a job. In properly indoctrinated workers that feeling is divorced from economic necessity. So anyone who's survived outside a while is bound to be suspect. That's a sign of economic security, and security of any sort undermines social control.
You hit the proverbial nail with that reply. (Although, sorry, doing the right thing should not be done out of malice) The real fit has to be in the corporate yes-man culture (malleable ass kisser) to be suited for any executive position and beyond that it is the willingness to be manipulated and drained to be able to keep a job in lower echelon.
This is the new age of evolution in the work place. The class wars will make it more of an eventual revolution, but it is coming. The unemployment rate (the actual one, not the Government one) globalization and off shore hiring are not sustainable for much longer.
Something has to give, but it is more likely to snap then to come easily. People who are made to be repressed and down and out eventually find the courage to fight back and by then, it is usually not with words.
down and out in Slicon Valley:
This is the response I got from a recruiter:
"I'm going to be overly honest with you. My firm doesn't allow me to submit any candidate who hasn't worked in 6-12 months or more. Recruiting brokers are probably all similar in that way . You are going to have to go through a connection/relationship you have with a colleague, co-worker, past manager or friend to get your next job .that's my advice for you. Best of luck "
I'm 56 years old with MSEE. Gained 20+ years of experience at the best of the best (TRW, Nortel, Microsoft), have been issued a patent. Where do I sign up to gain skills required to find a job now?
Litton Graft :
"Best of the Best?" I know you're down now, but looking back at these Gov'mint contractors you've enjoyed the best socialism money can by.
Nortel/TRW bills/(ed) the Guvmint at 2x, 3x your salary, you can ride this for decades. At the same time the Inc is attached to the Guvmint ATM localities/counties are giving them a red carpet of total freedom from taxation. Double subsidies.
I've worked many years at the big boy bandits, and there is no delusion in my mind that almost anyone, can do what I do and get paid 100K+. I've never understood the mindset of some folks who work in the Wermacht Inc: "Well, someone has to do this work" or worse "What we do, no one else can do" The reason no one else "can do it" is that they are not allowed to. So, we steal from the poor to build fighter jets, write code or network an agency.
I used to work as a recruiter and can tell you that I only parroted the things my clients told me. I wanted to get you hired, because I was lazy and didn't want to have to talk to someone else next.
So what do you do? To place you that recruiter needs to see on a piece of paper that you are currently working? Maybe get an email or phone call from someone who will vouch for your employment history. That should not be that hard to make happen.
Francois T :
The "bizarre way that companies now spec jobs" is essentially a coded way for mediocre managers to say without saying so explicitly that "we can afford to be extremely picky, and by God, we shall do so no matter what, because we can!"
Of course, when comes the time to hire back because, oh disaster! business is picking up again, (I'm barely caricaturing here; some managers become despondent when they realize that workers regain a bit of the higher ground; loss of power does that to lesser beings) the same idiots who designed those "overly narrow hiring spec then leads to absurd, widespread complaint that companies can't find people with the right skills" are thrown into a tailspin of despair and misery. Instead of figuring out something as simple as "if demand is better, so will our business", they can't see anything else than the (eeeek!) cost of hiring workers. Unable to break their mental corset of penny-pincher, they fail to realize that lack of qualified workers will prevent them to execute well to begin with.
And guess what: qualified workers cost money, qualified workers urgently needed cost much more.
This managerial attitude must be another factor that explain why entrepreneurship and the formation of small businesses is on the decline in the US (contrary to the confabulations of the US officialdumb and the chattering class) while rising in Europe and India/China.
If you are 55-60, worked as a professional (i.e., engineering say) and are now unemployed you are dead meat. Sorry to be blunt but thats the way it is in the US today. Let me repeat that : Dead Meat.
I was terminated at age 59, found absolutely NOTHING even though my qualifications were outstanding. Fortunately, my company had an old style pension plan which I was able to qualify for (at age 62 without reduced benefits). So for the next 2+ years my wife and I survived on unemployment insurance, severance, accumulated vacation pay and odd jobs. Not nice – actually, a living hell.
At age 62, I applied for my pension, early social security, sold our old house (at a good profit) just before the RE crash, moved back to our home state. Then my wife qualified for social security also. Our total income is now well above the US median.
Today, someone looking at us would think we were the typical corporate retiree. We surely don't let on any differently but the experience (to get to this point) almost killed us.
I sympathize very strongly with the millions caught in this unemployment death spiral. I wish I had an answer but I just don't. We were very lucky to survive intact.
Thank you Yves for your excellent post, and for bringing to light this crucial issue.
Thank you to all the bloggers, who add to the richness of the this discussion.
I wonder if you could comment on this Yves, and correct me if I am wrong I believe that the power of labor was sapped by the massive available supply of global labor. The favorable economic policies enacted by China (both official and unofficial), and trade negotiations between the US government and the Chinese government were critical to creating the massive supply of labor.
Thank you. No rush of course.
There are some odd comments and notions here that are used to support dogma and positions of prejudice. The world can be viewed in a number of ways. Firstly from a highly individualised and personal perspective – that is what has happened to me and here are my experiences. Or alternatively the world can be viewed from a broader societal perspective.
In the context of labour there has always been an unequal confrontation between those that control capital and those that offer their labour, contrary to some of the views exposed here – Marx was a first and foremost a political economist. The political economist seeks to understand the interplay of production, supply, the state and institutions like the media. Modern day economics branched off from political economy and has little value in explaining the real world as the complexity of the world has been reduced to a simplistic rationalistic model of human behaviour underpinned by other equally simplistic notions of 'supply and demand', which are in turn represented by mathematical models, which in themselves are complex but merely represent what is a simplistic view of the way the world operates. This dogmatic thinking has avoided the need to create an underpinning epistemology. This in turn underpins the notion of free choice and individualism which in itself is an illusion as it ignores the operation of the modern state and the exercise of power and influence within society.
It was stated in one of the comments that the use of capital (machines, robotics, CAD design, etc.) de-skills. This is hardly the case as skills rise for those that remain and support highly automated/continuous production factories. This is symptomatic of the owners of capital wanting to extract the maximum value for labour and this is done via the substitution of labour for capital making the labour that remains to run factories highly productive thus eliminating low skill jobs that have been picked up via services (people move into non productive low skilled occupations warehousing and retail distribution, fast food outlets, etc). Of course the worker does not realise the additional value of his or her labour as this is expropriated for the shareholders (including management as shareholders).
The issue of the US is that since the end of WW2 it is not the industrialists that have called the shots and made investments it is the financial calculus of the investment banker (Finance Capital). Other comments have tried to ignore the existence of the elites in society – I would suggest that you read C.W.Mills – The Power Elites as an analysis of how power is exercised in the US – it is not through the will of the people.
For Finance capital investments are not made on the basis of value add, or contribution through product innovation and the exchange of goods but on basis of the lowest cost inputs. Consequently, the 'elites' that make investment decisions, as they control all forms of capital seek to gain access to the cheapest cost inputs. The reality is that the US worker (a pool of 150m) is now part of a global labour pool of a couple of billion that now includes India and China. This means that the elites, US transnational corporations for instance, can access both cheaper labour pools, relocate capital and avoid worker protection (health and safety is not a concern). The strategies of moving factories via off-shoring (over 40,000 US factories closed or relocated) and out-sourcing/in-sourcing labour is also a representations of this.
The consequence for the US is that the need for domestic labour has diminished and been substituted by cheap labour to extract the arbitrage between US labour rates and those of Chinese and Indians. Ironically, in this context capital has become too successful as the mode of consumption in the US shifted from workers that were notionally the people that created the goods, earned wages and then purchased the goods they created to a new model where the worker was substituted by the consumer underpinned by cheap debt and low cost imports – it is illustrative to note that real wages have not increased in the US since the early 1970's while at the same time debt has steadily increased to underpin the illusion of wealth – the 'borrow today and pay tomorrow' mode of capitalist operation. This model of operation is now broken. The labour force is now being demonized as there is a now surplus of labour and a need to drive down labour rates through changes in legislation and austerity programs to meet those of the emerging Chinese and Indian middle class so workers rights need to be broken. Once this is done a process of in-source may take place as US labour costs will be on par with overseas labour pools.
It is ironic that during the Regan administration a number of strategic thinkers saw the threat from emerging economies and the danger of Finance Capital and created 'Project Socrates' that would have sought to re-orientate the US economy from one that was based on the rationale of Finance Capital to one that focused in productive innovation which entailed an alignment of capital investment, research and training to product innovative goods. Of course this was ignored and the rest is history. The race to the lowest input cost is ultimately self defeating as it is clear that the economy de-industrialises through labour and capital changes and living standards collapse. The elites – bankers, US transnational corporations, media, industrial military complex and the politicians don't care as they make money either way and this way you get other people overseas to work cheap for you.
Neoliberal orthodoxy treats unemployment as well as wage supression as a necessary means to fight "inflation." If there was too much power in the hands of organized labor, inflationary pressures would spiral out of control as supply of goods cannot keep up with demand.
It also treats the printing press as a necessary means to fight "deflation."
So our present scenario: widespread unemployment along with QE to infinity, food stamps for all, is exactly what you'd expect.
The problem with this orthodoxy is that it assumes unlimited growth on a planet with finite resources, particularly oil and energy. Growth is not going to solve unemployment or wages, because we are bumping up against limits to growth.
There are only two solutions. One is tax the rich and capital gains, slow growth, and reinvest the surplus into jobs/skills programs, mostly to maintain existing infrastructure or build new energy infrastructure. Even liberals like Krugman skirt around this, because they aren't willing to accept that we have the reached the end of growth and we need radical redistribution measures.
The other solution is genuine classical liberalism / libertarianism, along the lines of Austrian thought. Return to sound money, and let the deflation naturally take care of the imbalances. Yes, it would be wrenching, but it would likely be wrenching for everybody, making it fair in a universal sense.
Neither of these options is palatable to the elite classes, the financiers of Wall Street, or the leeches and bureaucrats of D.C.
So this whole experiment called America will fail.
Nov 07, 2017 | marknesop.wordpress.com
marknesop , November 7, 2017 at 6:39 pmUpward mobility in the United States is largely an illusion , and the living standard for the middle class has hardly moved in decades; it has declined, if anything, relative to progress in the 1960's.
Seventy per cent of people born into the bottom quintile of income distribution never make it into the middle class, and fewer than ten per cent get into the top quintile. Forty per cent are still poor as adults.
You are correct, though, that economics is immensely complicated and turns on almost-infinite variables. People who don't like the way things are turning out often just re-define the metrics, or pick a different set.
Oct 17, 2017 | www.amazon.com
Amid the global financial crisis of 2008, a new chapter in the history of neoliberal globalization emerged. Simple assumptions about markets as pure and neutral arbiters of economic transactions faced new challenges from beyond the pages of economic history and sociology.
The apparent triumph of global capitalism came into temporary question, and with it, the reigning economic paradigm of neoliberalism. From the left wing of US politics, a newly invigorated discourse of class and income inequality began to challenge corporate power with calls for greater accountability on Wall Street. The specter of the Occupy movement in 1011, with its sweeping critique of corporate power, took root in ways not seen in the United States since the 1999 World Trade Organization protests in Seattle.
In response, proponents of neoliberalism heightened their demands for a market-governed society, further tax cuts, deregulation, trade liberalization, and more. From the GOP and Tea Party's politics of austerity arose a fresh defense of free market politics in the United States, as well as a rcinvigorated denial of class as a structuring force in US society. These social tensions persist even as neoliberalism, as an ideology and a model for institutional restructuring, exhibits remarkable resilience.
Neoliberalism - which promises to efficiently generate wealth while disciplining states and bureaucracies with market forces - took shape over the course of decades. As a kind of governing philosophy, it has been offered, variously, as a remedy for economic stagnation, bureaucratic bloat, corruption, inflation, and more (Bourdieu 1999; Mirowski and Plehwe 2009; Mudge 2008). From the early 1980s onward, it provided the basic policy framework for "structural adjustment" in the global south, for "rescuing" the welfare state in the global north, and as a vision for a global economy unbound from centrally planned markets, dying industries, or rent-seeking interest groups.
One cornerstone of this paradigm that remains mostly unchallenged among political elites is the principal of "free trade." Broadly speaking, neoliberalism and free trade have provided the ideological framework for most reciprocal trade agreements since the early 1980s, when President Reagan initiated a wave of new trade policies in February 1982 during a speech to the Organization of American States (OAS). There, Reagan unilaterally called for a Caribbean Basin Initiative (CBI) that would "make use of the magic of the marketplace of the Americas, to earn their own way toward self-sustaining growth" (quoted in Polanyi-Levitt 1985: 232)/ This formulaic discourse of free markets, free trade, and personal liberty - hallmark features of Reagan's popular rhetoric - also captured what would later be acknowledged as core principles of an incipient neoliberal ideology that promised a restoration of US economic hegemony (Mudge 2008). Domestically and internationally, neoliberal trade proposals were generally presented in tandem with calls for privatization, deregulation, and a reduction in the size of government spending as a share of GDP. 5
Although a large and varied group of economists, policy wonks, and government leaders supported the general principles of neoliberal globalization, the "market fever" of the 1980s did not spread simply because certain individuals espoused free trade and domestic deregulation. The fact that many of these noncorporate actors assume a central role in many popular and academic accounts of this era does not reduce the many empirical problems with this view.
In particular, the problem with this "triumphant" vision of neoliberal history is the manner in which the very engines of capital behind the market mania - globalizing corporations appear as liberated historical agents acting out their market freedoms, not as class political actors foisting new institutional realities on the world. We contest this prevailing view and instead ask who liberated, or in Blyth's (2001) terminology, "disembedded," these markets from national social and political institutions?
Was it the fever pitch of a new' policy ideology acted out by government partisans and policy makers committed to its mantra? Or did the very economic actors benefitting from market liberalization act politically and concertedly to unleash it? And if so, did this coordinated corporate political campaign arise from a reorganized and newly emboldened economic class, or simply through ad hoc alignments created by shared organizational interests? Specifically, can we detect class political signatures on the wave of free trade policies, like the CBI, the North American Free Trade Agreement (NAFTA), or the World Trade Organization (WTO), that erected the institutional framework of neoliberal globalization? 6
The answer to these questions and, in particular, the role of class agency within these macroeconomic shifts, is not simply a question of whether one likes Karl Marx or Adam Smith. Notwithstanding the recent tendency to equate the mention of class with "class warfare," it is our contention that removing class from accounts of recent economic history creates, at best, a narrow and distorted perspective on this important era. The primary purpose of this book, then, is to introduce and empirically validate a concept of class agency that deepens our understanding of both the trade policy-making apparatus as well as the neoliberal globalization "project" more generally.
We believe that our approach, rooted in the "elite studies" and "power structure" research traditions, expands (and, in some areas, corrects) conventional explanations of neoliberal trade and globalization that emphasize market, institutional, and ideological factors, while neglecting to incorporate a concept of class political action .
Our general line of argument historicizes US trade policy and neoliberal globalization, highlighting the active and at times contradictory processes that shape the state and class relationships responsible for propelling institutions, like the WTO, into existence. Following McMichael (2001: 207), we concur that globalization is best understood as a "historical project rather than a culminating process." Treating neoliberal trade policies as part of a much larger historical project - made and remade by collective actors - offers a more realistic and empirically grounded framework for exploring the intersection of class and state actors in the political articulation of globalization.
Whereas much of the literature on globalization assigns an important role to the economic activity of multinational corporations, the force of their collective political agency in pressuring states to ratify trade agreements and enact institutional reforms is mostly attributed to narrow sectoral interests, like factor mobility', economies of scale, or various industry-specific characteristics...
Oct 06, 2017 | www.nakedcapitalism.com
By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website
The Idea That Businesses Exist Solely to Enrich Shareholders Is Harmful Nonsense
In a new INET paper featured in the Financial Times , economist William Lazonick lays out a theory about how corporations can work for everyone – not just a few executives and Wall Streeters. He challenges a set of controversial ideas that became gospel in business schools and the mainstream media starting in the 1980s. He sat down with INET's Lynn Parramore to discuss.
Lynn Parramore: Since the 1980s, business schools have touted "agency theory," a controversial set of ideas meant to explain how corporations best operate. Proponents say that you run a business with the goal of channeling money to shareholders instead of, say, creating great products or making any efforts at socially responsible actions such as taking account of climate change. Many now take this view as gospel, even though no less a business titan than Jack Welch, former CEO of GE, called the notion that a company should be run to maximize shareholder value "the dumbest idea in the world." Why did Welch say that?
William Lazonick: Welch made that statement in a 2009 interview , just ahead of the news that GE had lost its S&P Triple-A rating in the midst of the financial crisis. He explained that, "shareholder value is a result, not a strategy" and that a company's "main constituencies are your employees, your customers and your products." During his tenure as GE CEO from 1981 to 2001, Welch had an obsession with increasing the company's stock price and hitting quarterly earnings-per-share targets, but he also understood that revenues come when your company generates innovative products. He knew that the employees' skills and efforts enable the company to develop those products and sell them.
If a publicly-listed corporation succeeds in creating innovative goods or services, then shareholders stand to gain from dividend payments if they hold shares or if they sell at a higher price. But where does the company's value actually come from? It comes from employees who use their collective and cumulative learning to satisfy customers with great products. It follows that these employees are the ones who should be rewarded when the business is a success. We've become blinded to this simple, obvious logic.
LP: What have these academic theorists missed about how companies really operate and perform? How have their views impacted our economy and society?
WL: As I show in my new INET paper " Innovative Enterprise Solves the Agency Problem ," agency theorists don't have a theory of innovative enterprise. That's strange, since they are talking about how companies succeed.
They believe that to be efficient, business corporations should be run to "maximize shareholder value." But as I have argued in another recent INET paper , public shareholders at a company like GE are not investors in the company's productive capabilities.
LP: Wait, as a stockholder I'm not an investor in the company's capabilities?
WL: When you buy shares of a stock, you are not creating value for the company -- you're just a saver who buys shares outstanding on the stock market for the sake of a yield on your financial portfolio. Public shareholders are value extractors , not value creators.
By touting public shareholders as a corporation's value creators, agency theorists lay the groundwork for some very harmful activities. They legitimize "hedge fund activists," for example. These are aggressive corporate predators who buy shares of a company on the stock market and then use the power bestowed upon them by the ill-conceived U.S. proxy voting system, endorsed by the Securities and Exchange Commission (SEC), to demand that the corporation inflate profits by cutting costs. That often means mass layoffs and depressed incomes for anybody who remains. In an industry like pharmaceuticals , the activists also press for extortionate product price increases. The higher profits tend to boost stock prices for the activists and other shareholders if they sell their shares on the market.
LP: So the hedge fund activists are extracting value from a corporation instead of creating it, and yet they are the ones who get enriched.
WL: Right. Agency theory aids and abets this value extraction by advocating, in the name of "maximizing shareholder value," massive distributions to shareholders in the form of dividends for holding shares as well as stock buybacks that you hear about, which give manipulative boosts to stock prices. Activists get rich when they sell the shares. The people who created the value -- the employees -- often get poorer.
###p"downsize-and-distribute" -- something that corporations have been doing since the 1980s, which has resulted in extreme concentration of income among the richest households and the erosion of middle-class employment opportunities.
LP: You've called stock buybacks -- what happens when a company buys back its own shares from the marketplace, often to manipulate the stock price upwards -- the "legalized looting of the U.S. business corporation." What's the problem with this practice?
WL: If you buy shares in Apple, for example, you can get a dividend for holding shares and, possibly, a capital gain when you sell the shares. Since 2012, when Apple made its first dividend payment since 1996, the company has shelled out $57.4 billion as dividends, equivalent to over 22 percent of net income. That's fine. But the company has also spent $157.9 billion on stock buybacks, equal to 62 percent of net income.
Yet the only time in its history that Apple ever raised funds on the public stock market was in 1980, when it collected $97 million in its initial public offering. How can a corporation return capital to parties that never supplied it with capital? It's a very misleading concept.
The vast majority of people who hold Apple's publicly-listed shares have simply bought outstanding shares on the stock market. They have contributed nothing to Apple's value-creating capabilities. That includes veteran corporate raider Carl Icahn, who raked in $2 billion by holding $3.6 billion in Apple shares for about 32 months, while using his influence to encourage Apple to do $80.3 billion in buybacks in 2014-2015, the largest repurchases ever. Over this period, Apple, the most cash-rich company in history, increased its debt by $47.6 billion to do buybacks so that it would not have to repatriate its offshore profits, sheltered from U.S. corporate taxes.
There are many ways in which the company could have returned its profits to employees and taxpayers -- the real value creators -- that are consistent with an innovative business model. Instead, in doing massive buybacks, Apple's board (which includes former Vice President Al Gore) has endorsed legalized looting. The SEC bears a lot of blame. It's supposed to protect investors and make sure financial markets are free of manipulation. But back in 1982, the SEC bought into agency theory under Reagan and came up with a rule that gives corporate executives a "safe harbor" against charges of stock-price manipulation when they do billions of dollars of buybacks for the sole purpose of manipulating their company's stock price.
LP: But don't shareholders deserve some of the profits as part owners of the corporation?
WL: Let's say you buy stock in General Motors. You are just buying a share that is outstanding on the market. You are contributing nothing to the company. And you will only buy the shares because the stock market is highly liquid, enabling you to easily sell some or all of the shares at any moment that you so choose.
In contrast, people who work for General Motors supply skill and effort to generate the company's innovative products. They are making productive contributions with expectations that, if the innovative strategy is successful, they will share in the gains -- a bigger paycheck, employment security, a promotion. In providing their labor services, these employees are the real value creators whose economic futures are at risk.
LP: This is really different from what a lot of us have been taught to believe. An employee gets a paycheck for showing up at work -- there's your reward. When we take a job, we probably don't expect management to see us as risk-takers entitled to share in the profits unless we're pretty high up.
WL: If you work for a company, even if its innovative strategy is a big success, you run a big risk because under the current regime of "maximizing shareholder value" a group of hedge fund activists can suck the value that you've created right out, driving your company down and making you worse off and the company financially fragile. And they are not the only predators you have to deal with. Incentivized with huge amounts of stock-based pay, senior corporate executives will, and often do, extract value from the company for their own personal gain -- at your expense. As Professor Jang-Sup Shin and I argue in a forthcoming book, senior executives often become value-extracting insiders. And they open the corporate coffers to hedge fund activists, the value-extracting outsiders. Large institutional investors can use their proxy votes to support corporate raids, acting as value-extracting enablers.
You put in your ideas, knowledge, time, and effort to make the company a huge success, and still you may get laid off or find your paycheck shrinking. The losers are not only the mass of corporate employees -- if you're a taxpayer, your money provides the business corporation with physical infrastructure, like roads and bridges, and human knowledge, like scientific discoveries, that it needs to innovate and profit. Senior corporate executives are constantly complaining that they need lower corporate taxes in order to compete, when what they really want is more cash to distribute to shareholders and boost stock prices. In that system, they win but .
LP: Some academics say that hedge fund activism is great because it makes a company run better and produce higher profits. Others say, "No, Wall Streeters shouldn't have more say than executives who know better how to run the company." You say that both of these camps have got it wrong. How so?
WL: A company has to be run by executive insiders, and in order to produce innovation these executives have got to do three things:
First you need a resource-allocation strategy that, in the face of uncertainty, seeks to generate high-quality, low-cost products. Second, you need to implement that strategy through training, retaining, motivating, and rewarding employees, upon whom the development and utilization of the organization's productive capabilities depend. Third, you have to mobilize and leverage the company's cash flow to support the innovative strategy. But under the sway of the "maximizing shareholder value" idea, many senior corporate executives have been unwilling, and often unable, to perform these value-creating functions. Agency theorists have got it so backwards that they actually celebrate the virtues of " the value extracting CEO ." How strange is that?
Massive stock buybacks is where the incentives of corporate executives who extract value align with the interests of hedge fund activists who also want to suck value from a corporation. When they promote this kind of alliance, agency theorists have in effect served as academic agents of activist aggression. Lacking a theory of the value-creating firm, or what I call a "theory of innovative enterprise," agency theorists cannot imagine what an executive who creates value actually does. They don't see that it's crucial to align executives' interests with the value-creating investment requirements of the organizations over which they exercise strategic control. This intellectual deficit is not unique to agency theorists; it is inherent in their training in neoclassical economics .
LP: So if shareholders and executives are too often just looting companies to enrich themselves – "value extraction," as you put it – and not caring about long-term success, who is in a better position to decide how to run them, where to allocate resources and so on?
WL: We need to redesign corporate-governance institutions to promote the interests of American households as workers and taxpayers. Because of technological, market, or competitive uncertainties, workers take the risk that the application of their skills and the expenditure of their efforts will be in vain. In financing investments in infrastructure and knowledge, taxpayers make productive capabilities available to business enterprises, but with no guaranteed return on those investments.
These stakeholders need to have representation on corporate boards of directors. Predators, including self-serving corporate executives and greed-driven shareholder activists, should certainly not have representation on corporate boards.
LP: Sounds like we've lost sight of what a business needs to do to be successful in the long run, and it's costing everybody except a handful of senior executives, hedge fund managers, and Wall Street bankers. How would your "innovation theory" help companies run better and make for a healthier economy and society?
WL: Major corporations are key to the operation and performance of the economy. So we need a revolution in corporate governance to get us back on track to stable and equitable economic growth. Besides changing board representation, I would change the incentives for top executives so that they are rewarded for allocating corporate resources to value creation. Senior executives should gain along with the rest of the organization when the corporation is successful in generating competitive products while sharing the gains with workers and taxpayers.
Innovation theory calls for changing the mindsets and skill sets of senior executives. That means transforming business education, including the replacement of agency theory with innovation theory. That also means changing the career paths through which corporate personnel can rise to positions of strategic control, so that leaders who create value get rewarded and those who extract it are disfavored. At the institutional level, it would be great to see the SEC, as the regulator of financial markets, take a giant step in supporting value creation by banning stock buybacks whose purpose it is to manipulate stock prices.
To get from here to there, we have to replace nonsense with common sense in our understanding of how business enterprises operate and perform.
Enquiring Mind , October 6, 2017 at 10:44 amRepubAnon , October 6, 2017 at 12:14 pm
Owners come first!
That was the slogan of our former board chair. He didn't disclose to the employees that his compensation was influenced mightily by how big the net income was. He did tell the employees that they were well down the hierarchy, after Owners (capital O) and then vendors and then customers. His former employees deserted in droves.Tim , October 6, 2017 at 2:21 pm
I'd say that maximizing long-term shareholder value is a great idea the problem is, as is so often the case these days, short-term thinking.
Driving away a company's best employees makes that quarter's numbers look better, but destroys long-term value. Same thing for so many other short-term, "I'll be gone, you'll be gone" strategies.
One step to fixing things – change the definition of long-term capital gains from the current 1 year to, say, 5 years. This "one simple trick" would fix everything from the carried interest loophole to the abuses inherent in the current Wall Street gambling mentality.
It won't happen, of course, but it'd be nice.a different chris , October 6, 2017 at 10:47 am
We can talk about what is best in theory, but reality is just that, shareholders come first.
They control the board and the CEO and the CEO institutes the will of the shareholders down into the business entities, determining the level of reinvestment in the business units and the level of employee compensation. That will continue to be the case until the company goes bankrupt at which point shareholders are entitled to nothing.
I agree with others that Jack Welch is saying what he is saying after the fact. Way too easy to do.RepubAnon , October 6, 2017 at 12:20 pm
>Welch had an obsession with increasing the company's stock price and hitting quarterly earnings-per-share targets, but he also understood
Yeah so he talks a good game but when he had the reins – one of the most powerful men in the world meekly (ok, that's a hilarious adjective when applied to Jack Welsh) followed the herd. Or more accurately, found out where the herd was heading and got out in front of it. The true sign of modern "leadership".digi_owl , October 6, 2017 at 1:06 pm
Folks at GE back in the day nicknamed him "Neutron Jack" – if he visited a site, all the employees disappeared, leaving only the buildings standingLeft in Wisconsin , October 6, 2017 at 1:06 pm
Or more accurately, found out where the herd was heading and got out in front of it. The true sign of modern "leadership".
Reminds me of something i have read, supposedly a quite from some politician or other, going to the tune of "i need to find out where the mob is going, so i can lead them there".Synoia , October 6, 2017 at 11:18 am
Welch's primary business strategy at GE was to exit every product market in which GE's market share was not in the top two in the industry (selling them off or closing them down) and reallocate resources to industries where GE was market dominant, often buying up the competition rather than truly investing in innovation. A truly awful human being.Vatch , October 6, 2017 at 11:27 am
As I personally have always believed, Employees have more invested in their employers than shareholders. Shareholders can sell quickly and have no loyalty. Employees do not enjoy such a liquid "jobs market."
There also seems to be a turning point in companies, where they change the perception of the customers form a group to be treasured, to a group who are to b exploited – change the relationship so the customers become "marks."
I also believe there should be an almost automatic "break -up" provision for companies who reach a certain market share.
Finally there should be one definition of income, and it should include Wages, Dividends, and Capital Gains.readerOfTeaLeaves , October 6, 2017 at 12:15 pm
there should be an almost automatic "break -up" provision for companies who reach a certain market share.
Yes, anti-trust enforcement would be nice. Hypothetical President Sanders might actually do that. Real and hypothetical Presidents Bush, Obama, Romney, B. Clinton, H. Clinton, and Trump have other priorities.JTMcPhee , October 6, 2017 at 12:05 pm
Sen Bernie Sanders sees right through the neoclassical fetters, blinders, and bullshit. He recognizes how intellectually and economically stagnant and dangerous it is. He has the most powerful conceptual, articulate grasp of economics that I've seen the past 40 years. He also, IIRC, had MMTer Stephanie Kelton as an advisor, and had her advise the Senate Finance Committee. Also notable: Sen Elizabeth Warren.
The other political operators that you mention are still in thrall to neoclassical assumptions. They mistake 'takers' for 'makers' and are economically bamboozled. And it has worked out well for all of them, on a personal basis, so it is not surprising that they don't see the problems.
Anyone actually trying to build an innovative business, OTOH, has to see through the bamboozlement or else you're out of business pronto.Left in Wisconsin , October 6, 2017 at 1:14 pm
Chicken and egg question:
The class of humans that by inclination and opportunity become C-Suite and VC looters and "owners:" did they precede the imprimatur of "economists" with their notions of price, value, and crossing of curves, or did the "economists" do a Martin Luther, nail up a bunch of theses, and preach fire and brimstone to turn the greedheads loose?
And was/is any other outcome for the species and the planet even possible?Carla , October 6, 2017 at 3:05 pm
Neil Fligstein wrote a good book awhile back called The Transformation of Corporate Control that shows how most large manufacturing companies were initially run by engineers, then sales people, then finance people (as corporations came to be seen as bundles of assets as opposed to businesses). I think this transformation paralleled the rise of neoclassical economics. So, not so much "chicken-and-egg" as "class war." In Germany, at least until recently, I believe CEO's of manufacturing firms were still disproportionately engineers.readerOfTeaLeaves , October 6, 2017 at 12:30 pm
"most large manufacturing companies were initially run by engineers, then sales people, then finance people"
The Lincoln Electric Company, which became famous for its "Incentive Management" program of compensating employees, was a client of mine. Over three decades I saw it progress through precisely those stages, and gradually lose every characteristic that had made the company unique.JTMcPhee , October 6, 2017 at 12:59 pm
This post was a genuine pleasure to read. Especially:
If you work for a company, even if its innovative strategy is a big success, you run a big risk because under the current regime of "maximizing shareholder value" a group of hedge fund activists can suck the value that you've created right out, driving your company down and making you worse off and the company financially fragile .
And we've had a government by and for hedge fund managers for about the same amount of time that we've had economic woes. One problem is that hedge funders like Romney, who actually don't think about consumer product development, actually don't have to test and deploy products, bring their bean-counter assumptions to business and make a hash of things. I mention Romney specifically, because he presents himself to the world as a paragon of economic wisdom.
Romney has a prestigious business school background. Which makes me want to highlight this:
Innovation theory calls for changing the mindsets and skill sets of senior executives. That means transforming business education, including the replacement of agency theory with innovation theory .Disturbed Voter , October 6, 2017 at 12:36 pm
Just a thought: "innovation theory," like MMT, is maybe just a tool set? "Innovation" includes "autonomous combat devices," and CRSP-R, and nuclear weapons, and the F-35, and fracking, and derivatives, and plastics, and charter schools, stuff and ideas that for some of us constitute "value" are corporations as the category has grown to be, any more likely to "innovate" in the areas of social improvements and possibilities, or stewardship of the planet, or close down the toll stations and all the other rent collection scams and extortions they have "innovated" to date? Or release their chokehold on "policy?"
Says the proponent: "Major corporations are key to the operation and performance of the economy. So we need a revolution in corporate governance to get us back on track to stable and equitable economic growth. Besides changing board representation, I would change the incentives for top executives so they are rewarded for allocating corporate resources to value creation. Senior executives should gain along with the rest of the organization when the corporation is successful in generating competitive products while sharing the gains with workers and taxpayers." There seems to be so much wrong and just more Biz-babble about this, one hardly knows where to start unpacking.
"Major corporations are key?" Really? Monsanto? GM? Bechtel? The Big Banks? And "back on track": When has the political economy, writ small or large, ever been "on track to stability and equitable growth," said "growth' itself seemingly one of the pathologies that's killing us? And who's going to write the entries for the corporate senior executives' dance cards that will measure their "success," in those feel-good categories?
But it's a good conversation piece, and maybe an opening into Something Better, however us inherently mostly self-interested, self-pleasing omnivorous predators might define "better "JTMcPhee , October 6, 2017 at 1:06 pm
Badly run companies, naturally extinguish themselves. Unfortunately they take down their customers, owners, vendors and employees in the process. But the government can step in and either save a company that otherwise would die, or act as a crony corruption partner on behalf of a well connected company. Same as it always was.
But since gigantism is the norm, rather than family run farms in a mostly agrarian economy such failures are catastrophic. The linkage between these elephants tends to create systemic risk. Previously, failure was small and isolated.allan , October 6, 2017 at 12:48 pm
Welcome to our wonderful new world of infinite mutual vulnerability! Risk On! Nuclear weapons, Equifax, Googleamazon, NSApanopticon, FIRE, hacking, crapification The Soviet Union vanished as an entity, many starved, but the mopes there at least still knew how to raise up edible crops and live on "less" and maybe do better collective response to that sharp peak on the entropy curve. Wonder how things might play out exceptionally, here in the Empire?
It should be noted that Michael Jensen of HBS, one of the originators of the `maximize shareholder value' of corporate governance, is on some short lists for this year's not-exactly-the-Nobel Prize in Economics.
Jan 06, 2017 | economistsview.typepad.comanne -> Paul Mathis... , December 31, 2016 at 07:09 PMKrugman's refusal to endorse fiscal stimulus unless the economy is at zero lower bound. That is not only anti-Keynesian, it plays directly into the hands of the debt fear mongers. (Krugman is also worried about the debt.)Gibbon1 -> anne... , December 31, 2016 at 10:21 PM
[ Only correct to a degree, economic weakness is recognized. ]Two of my criticisms about Krugman/Friedman, etc is that is 'free markets' are supposed to substitute for policy in the government sphere. Except very telling except when we're talking about funding the security state.AngloSaxon -> Gibbon1... , January 01, 2017 at 06:08 PM
The other is that the real power of markets is that in a real free market (not a Potemkin one) decisions are made often at the point where needs, information, incentives, and economic power come together. But where the large scale decisions the governments have to make, markets fail. Policy though doesn't. But Neoliberals hate policy.Well, duh. "Policy" and "Capitalism" don't go together and never have. When you enact policy, you destroy the ability to make profit and you get the 1970's.likbez -> Gibbon1... , -1Free market is a neoliberal myth, the cornerstone of neoliberalism as a secular religion. Somewhat similar to "Immaculate Conception" in Catholicism.
In reality market almost by definition is controlled by government, who enforces the rules and punish for the transgressions.
Also note interesting Orwellian "corruption of the language" trick neoliberals use: neoliberals talk about "free market, not "fair market".
After 2008 few are buying this fairy tale about how markets can operate and can solve society problems independently of political power, and state's instruments of violence (the police and the military). This myths is essentially dead.
But like Adventists did not disappear when the Second Coming of Christ did not occurred in predicted timeframe, neoliberals did not did not disappeared after 2008 either. And neither did neoliberalism, it just entered into zombie, more bloodthirsty stage.
The fact that even the term "neoliberalism" is prohibited in the US MSM also helped. It is king of stealth ideology, unlike say, Marxists, neoliberals do not like to identify themselves as such. The behave more like members of some secret society, free market masons.
Friedmanism is this sense a flavor of economic Lysenkoism. Note that Lysenko like Friedman was not a complete charlatan. Some of his ideas were pretty sound and withstood the test of time. But that does not make his less evil.
And for those who try to embellish this person, I would remind his role in 1973 Chilean coup d'état ( https://en.wikipedia.org/wiki/1973_Chilean_coup_d%27%C3%A9tat ) and bringing Pinochet to power. His "Chicago boys" played a vital role in the events. This man did has blood on his hands.
Of course, bringing a reign of terror to Chile was not why the CIA had sponsored him. The reason he was there was to reverse the gains of the Allende social democracy and return control of the country's economic and political assets to the oligarchy. Pinochet was convinced, through supporters among the academics in the elite Chilean universities, to try a new series of economic policies, called "neoliberal" by their founders, the economists of the University of Chicago, led by an economist by the name of Milton Friedman, who three years later would go on to win a Nobel Prize in Economics for what he was about to unleash upon Chile.
Friedman and his colleagues were referred to by the Chileans as "the Chicago Boys." The term originally meant the economists from the University of Chicago, but as time went on, as their policies began to disliquidate the middle class and poor, it took on a perjorative meaning. That was because as the reforms were implemented, and began to take hold, the results were not what Friedman and company had been predicting. But what were the reforms?
The reforms were what has come to be called "neoliberalism." To understand what "neoliberal" economics is, one must first understand what "liberal" economics are, and so we'll digress briefly from our look at Chile for a quick
Aug 21, 2017 | www.moonofalabama.org
spudski | Aug 20, 2017 8:25:35 PM | 13
"After years without result, with days to the deadline, Canada's negotiator, Simon Reisman, who Chrystia Freeland recalls in the fond tones Hillary Clinton uses for Henry Kissinger, walked. Why? Because the U.S. wouldn't agree to a "mechanism" that superceded U.S. law. Ottawa was grim. Without a deal, we'd perish. The U.S. negotiator said: Canada needs a "face-saving gesture." President Reagan told his team to get creative.
They did. They didn't replace the U.S.'s unilateral right to impose costs on Canadian stuff with a neutral process to decide what's fair. They created a process to decide only whether the U.S. was accurately enforcing its own rules. That left everything as it was but called it dispute resolution."
John Gilberts | Aug 20, 2017 9:30:54 PM | 15
Re Spudski - 13 and the NAFTA reneg: Good thing Chrystia Freeland and Justin Trudeau have the very best advising them...
Taking Summers' Advice Defies Logic
Jul 19, 2017 | www.nakedcapitalism.comJuly 19, 2017 by Lambert Strether By Thom Hartmann. a talk-show host and author of over 25 books in print.. Originally published at AlterNet .
Indentured servitude is back in a big way in the United States, and conservative corporatists want to make sure that labor never, ever again has the power to tell big business how to treat them.
Idaho , for example, recently passed a law that recognizes and rigorously enforces non-compete agreements in employment contracts, which means that if you want to move to a different, more highly paid, or better job, you can instead get wiped out financially by lawsuits and legal costs.
In a way, conservative/corporatists are just completing the circle back to the founding of this country.
Indentured servitude began in a big way in the early 1600s, when the British East India Company was establishing a beachhead in the (newly stolen from the Indians) state of Virginia (named after the "virgin queen" Elizabeth I, who signed the charter of the BEIC creating the first modern corporation in 1601). Jamestown (named after King James, who followed Elizabeth I to the crown) wanted free labor, and the African slave trade wouldn't start to crank up for another decade.
So the company made a deal with impoverished Europeans: Come to work for typically 4-7 years (some were lifetime indentures, although those were less common), legally as the property of the person or company holding your indenture, and we'll pay for your transport across the Atlantic.
It was, at least philosophically, the logical extension of the feudal economic and political system that had ruled Europe for over 1,000 years. The rich have all the rights and own all the property; the serfs are purely exploitable free labor who could be disposed of ( indentured servants , like slaves, were commonly whipped, hanged, imprisoned, or killed when they rebelled or were not sufficiently obedient).
This type of labor system has been the dream of conservative/corporatists, particularly since the "Reagan Revolution" kicked off a major federal war on the right of workers to organize for their own protection from corporate abuse.
Unions represented almost a third of American workers when Reagan came into office (and, since union jobs set local labor standards, for every union job there was typically an identically-compensated non-union job, meaning about two-thirds of America had the benefits and pay associated with union jobs pre-Reagan).
Thanks to Reagan's war on labor, today unions represent about 6 percent of the non-government workforce.
But that wasn't enough for the acolytes of Ayn Rand, Ronald Reagan and Milton Friedman. They didn't just want workers to lose their right to collectively bargain; they wanted employers to functionally own their employees.
Prior to the current Reaganomics era, non-compete agreements were pretty much limited to senior executives and scientists/engineers.
If you were a CEO or an engineer for a giant company, knowing all their processes, secrets and future plans, that knowledge had significant and consequential value!company value worth protecting with a contract that said you couldn't just take that stuff to a competitor without either a massive payment to the left-behind company or a flat-out lawsuit.
But should a guy who digs holes with a shovel or works on a drilling rig be forced to sign a non-compete? What about a person who flips burgers or waits tables in a restaurant? Or the few factory workers we have left, since neoliberal trade policies have moved the jobs of tens of thousands of companies overseas?
Turns out corporations are using non-competes to prevent even these types of employees from moving to newer or better jobs.
America today has the lowest minimum wage in nearly 50 years , adjusted for inflation. As a result, people are often looking for better jobs. But according to the New York Times , about 1 in 5 American workers is now locked in with a non-compete clause in an employment contract.
Before Reaganomics, employers didn't keep their employees by threatening them with lawsuits; instead, they offered them benefits like insurance, paid vacations and decent wages. Large swaths of American workers could raise a family and have a decent retirement with a basic job ranging from manufacturing to construction to service industry work.
My dad was one of them; he worked 40 years in a tool-and-die shop, and the machinist's union made sure he could raise and put through school four boys, could take 2-3 weeks of paid vacation every year, and had full health insurance and a solid retirement until the day he died, which continued with my mom until she died years later. Most boomers (particularly white boomers) can tell you the same story.
That America has been largely destroyed by Reaganomics, and Americans know it. It's why when Donald Trump told voters that the big corporations and banksters were screwing them, they voted for him and his party (not realizing that neither Trump nor the GOP had any intention of doing anything to help working people).
And now the conservatives/corporatists are going in for the kill, for their top goal: the final destruction of any remnant of labor rights in America.
Why would they do this? Two reasons: An impoverished citizenry is a politically impotent citizenry, and in the process of destroying the former middle class, the 1 percent make themselves trillions of dollars richer.
The New York Times has done some great reporting on this problem, with an article last May and a more recent piece about how the state of Idaho has made it nearly impossible for many workers to escape their servitude.
Historically, indentured servants had their food, health care, housing, and clothing provided to them by their "employers." Today's new serfs can hardly afford these basics of life, and when you add in modern necessities like transportation, education and child-care, the American labor landscape is looking more and more like old-fashioned servitude.
Nonetheless, conservatives/corporatists in Congress and state-houses across the nation are working hard to hold down minimum wages. Missouri's Republican legislature just made it illegal for St. Louis to raise their minimum wage to $10/hour, throwing workers back down to $7.70. More preemption laws like this are on the books or on their way.
At the same time, these conservatives/corporatists are working to roll back health care protections for Americans, roll back environmental protections that keep us and our children from being poisoned, and even roll back simple workplace, food and toy safety standards.
The only way these predators will be stopped is by massive political action leading to the rollback of Reaganism/neoliberalism.
And the conservatives/corporatists who largely own the Republican Party know it, which is why they're purging voting lists , fighting to keep in place easily hacked voting machines , and throwing billions of dollars into think tanks, right-wing radio, TV, and online media.
If they succeed, America will revert to a very old form of economy and politics: the one described so well in Charles Dickens' books when Britain had " maximum wage laws " and "Poor Laws" to prevent a strong and politically active middle class from emerging.
Conservatives/corporatists know well that this type of neo-feudalism is actually a very stable political and economic system, and one that's hard to challenge. China has put it into place in large part, and other countries from Turkey to the Philippines to Brazil and Venezuela are falling under the thrall of the merger of corporate and state power.
So many of our individual rights have been stripped from us, so much of America's middle-class progress in the last century has been torn from us , while conservatives wage a brutal and oppressive war on dissenters and people of color under the rubrics of "security," "tough on crime," and the "war on drugs."
As a result, America has 5 percent of the world's population and 25 percent of the world's prisoners , more than any other nation on earth, all while opiate epidemics are ravaging our nation. And what to do about it?
Scientists have proven that the likelihood the desires of the bottom 90 percent of Americans get enacted into law are now equal to statistical " random noise ." Functionally, most of us no longer have any real representation in state or federal legislative bodies: they now exist almost exclusively to serve the very wealthy.
The neo-feudal corporate/conservative elite are both politically and financially committed to replacing the last traces of worker power in America with a modern system of indentured servitude.
Only serious and committed political action can reverse this; we're long past the point where complaining or sitting on the sidelines is an option.
As both Bernie Sanders and Barack Obama regularly said (and I've closed my radio show for 14 years with), "Democracy is not a spectator sport."
griffen , July 19, 2017 at 5:43 amWheresOurTeddy , July 19, 2017 at 5:48 am
Wait, no mention of the Clinton administration and those Rubin acolytes? I find that hard to believe, those 8 years in the 90s were significant for today's outsized CEO pay and incentives.Arizona Slim , July 19, 2017 at 8:37 am
First-Term Reagan Baby approves this post. New Deal was under attack before FDR's body got cold. Truman instead of Wallace in the VP slot in '44 was a dark day for humanity.
Remember the Four Freedoms.Disturbed Voter , July 19, 2017 at 6:24 am
The New Deal was under attack from day one.r.turner , July 19, 2017 at 12:57 pm
To keep doing what doesn't work, is insane. So keep voting for your incumbents! Not!BoycottAmazon , July 19, 2017 at 6:40 am
Massive political action? Not gonna happen.DanB , July 19, 2017 at 6:45 am
Then there is probation board / court bonds slavery. The slave is captured by the police, then chained to debt and papers first by a bond and then later upon "early" release to a probation officer. The slave has restrictions on his freedom by the probation orders, and must make good the money owed the bondsman and the court ordered fines. The slaves work for the benefit of the political and monied class who don't need to pay much if any tax burden for all their government delivered goods thanks to this system of slavery.Colonel Smithers , July 19, 2017 at 7:17 am
Hartmann closes with, "As both Bernie Sanders and Barack Obama regularly 'Democracy is not a spectator sport'." Hello Thom: Sanders has twisted himself with pretzel logic regarding neoliberalism and Obama is a full-blown neoliberal (who you seem to forget admired Ronald Reagan).Livius Drusus , July 19, 2017 at 7:28 am
Thank you, Dan.
That sentence also caught my attention and reminded me of John Kennedy junior's George magazine, marketing "politics as a lifestyle choice" and featuring Cindy Crawford on the inaugural cover. Allied to the MSM's obsession with identity politics, as a neo-liberal and neo-con driver of news, one is soon distracted from, if not disgusted with, what's going on. Thank God for (the) Naked Capitalism (community).lyman alpha blob , July 19, 2017 at 8:11 am
Yeah like Obama cared about unions and workers' rights. What happened to EFCA? What happened to the comfy shoes Obama said he would wear to walk with public sector workers in Wisconsin? Obama never fought for workers but he fought like hell for the TPP even going on Jimmy Fallon's show and slow jamming for it.
Obama is like the rest of the neoliberal Democrats. They think that unions and workers' rights are anti-meritocratic. Unions are only good for money and foot soldiers during the election. After the election they are basically told to get bent.Dirk77 , July 19, 2017 at 9:38 am
Yes thanks for mentioning the EFCA. I'm so old I remember when the Democrat party campaigned hard on that – "If you give us back the majority in Congress blah blah blah .". And as soon as they won said majority they never mentioned it again.Vatch , July 19, 2017 at 12:50 pm
Yes. I thank Hartmann for pointing out the latest power grabs by our corporate masters. Still, his ignoring Clinton, Obama and the rest just puts him in with all the other political tribalists, who by their tribalism distract from the main problems – and their ultimate solutions. It's a class war, Thom, The Only War That Matters.Eureka Springs , July 19, 2017 at 2:01 pm
One can disagree with Obama or Sanders about various issues, but democracy is definitely not a spectator sport. People need to vote in both primary and general elections, and not just in the big Presidential years. People need to vote in midterm primary and general elections, as well as the elections in odd numbered years, if their states have such elections.
They also need to actively support good candidates, and communicate their opinions to the politicians who hold office. Periodically, people post comments about the futility of voting, or they say that not voting is a way to send a message. Nonsense! Failure to participate is not a form of participation, it's just a way of tacitly approving of the status quo.Vatch , July 19, 2017 at 3:56 pm
Well I hope I can disagree with you that this here republic is a democracy. There isn't even a party I can think of which operates democratically.
Supporting a good candidate is asking people to participate in spectator sport-like activity. The people, party members, should determine a platform and the candidate/office holder should be obligated to sell/enact/administrate it.
The rich tell their politicians/parties what to do so should the rest of us.Alejandro , July 19, 2017 at 3:11 pm
" I can disagree with you that this here republic is a democracy. "
Fair enough. The United States is no longer a representative democracy (and it was only that way occasionally in the past); it's currently an oligarchic plutocracy. But if we hope to regain any semblance of a representative democracy, we need to actively participate. There are many reasons why we've degenerated into a plutocracy, and one of those reasons is that people don't participate enough.
"Supporting a good candidate is asking people to participate in spectator sport-like activity"
Sure, if people don't participate in the primary process, all they have to choose from in the general election is a couple of tools of the oligarchs. They also need to do many of the things in the quote from Howard Zinn that Alejandro provided.David, by the lake , July 19, 2017 at 7:04 am
"If democracy were to be given any meaning, if it were to go beyond the limits of capitalism and nationalism, this would not come, if history were any guide, from the top. It would come through citizen's movements, educating, organizing, agitating, striking, boycotting, demonstrating, threatening those in power with disruption of the stability they needed."–Howard Zinn
" Democracy is not a spectator sport."– Lotte Scharfman
http://www.capecodtimes.com/article/20081004/opinion/810040340Roger Smith , July 19, 2017 at 7:33 am
As others have pointed out already, it is important to note that corporatism is not a uniquely Republican characteristic.Colonel Smithers , July 19, 2017 at 7:40 am
Great post, although I think it goes a little out of its way to ignore referencing Democrats as an equal part of the problem, as they too are "conservative/corporatists". Party politics is theater for the plebes, nothing more. These "people" have the same values and desires.19battlehill , July 19, 2017 at 8:12 am
Thank you to Lambert. Indentured labourers were also used by the French colonial ventures, including Mauritius / Ile Maurice, known as Isle de France when under French rule from 1715 – 1810.
Many of the labourers lived alongside slaves and, later, free men and women. They also intermarried, beginning what are now called Creoles in the Indian Ocean, Caribbean and Louisiana. I am one of their descendants.
In 1936, my great grandfather and others, mainly Creoles, founded the Labour Party in Mauritius. A year later, they organised the first strike, a general, which resulted in four sugar factory workers being shot and killed at Union-Flacq sugar estate. From what my grandmother and her aunt and sister, all of whom used to knit banners and prepare food and drink for the 1 May, and my father report, it's amazing and depressing to see the progress of the mid-1930s to 1970s being rolled back . It's also depressing to hear from so many, let's call them the 10%, criticise trade unions and think that progress was achieved by magic. Plutonium Kun wrote about that recently.cnchal , July 19, 2017 at 8:14 am
Thom – I agree with your outrage; however, the truth is that economically the US has been broke since the 1970's and it doesn't matter. Nothing will change until our we have an honest monetary system, and until unearned income is tax properly – the rich have gotten richer and corporations have hijacked our government, whining about it does nothing, this will go on until something breaks and then we will see what happens.Arizona Slim , July 19, 2017 at 8:42 am
What is going on in Idaho? Why would the state politicians do such a thing? From the Idaho link which is the NY Times, reveals the real reason. Believe it or not.
"We're trying to build the tech ecosystem in Boise," said George Mulhern, chief executive of Cradlepoint, a company here that makes routers and other networking equipment. "And anything that would make somebody not want to move here or start a company here is going to slow down our progress."
Alex LaBeau, president of the Idaho Association of Commerce and Industry , a trade group that represents many of the state's biggest employers, countered: "This is about companies protecting their assets in a competitive marketplace ."
Alex doesn't get irony. What price discovery? Where are economists on this? Why are they radio silent? To paraphrase Franklin, a market, if you can keep it.
Again and again and again, we see narcissist lawyer/politicians doing stuff that is completely demented, from a normal person's point of view. They will be gone in a few years, but the idiotic laws remain.jrs , July 19, 2017 at 10:28 am
Note the use of the word "ecosystem." A bullshhhh tell if there ever was one.Vatch , July 19, 2017 at 4:54 pm
Tech is neither here nor there in it, I mean they say being able to leave jobs easily was a tech advantage in California where people could leave to start new businesses etc.. So I'm not sure how tech actually lines up on it, and it's almost not the point, even when it does good it's no substitute for an organization that really represents labor. It might be better in California due to tech pressure, but probably mostly because it's a deep blue state, which tends to make places slightly more tolerable places to live. Well as much as we're going to get when what we really need is socialists in the legislature but nonetheless.
Yes these practices are slavery. Indentured servitude is almost too polite, but I get it's more P.C..Tom G. , July 19, 2017 at 12:12 pm
It's not exactly the same as employee non-competition contracts, but remember the scandal about the Silicon Valley companies that privately agreed not to hire each others' employees? Here's one of the many articles about this:
http://www.businessinsider.com/emails-eric-schmidt-sergey-brin-hiring-apple-2014-3MG , July 19, 2017 at 12:41 pm
I imagine that a few companies will move to Idaho to take advantage of the favorable legal climate, and will leave even more quickly when they can't recruit the talent they need. Speaking as a Software Engineer, the only impact this new law has is to put Idaho at the top of my list of "places I won't consider for relocation."cnchal , July 19, 2017 at 8:18 pm
Mulhern is an idiot then because there is a fair amount of evidence that CA's lax enforcement and very skeptical enforcement of non competes is an important factor on why Silicon Valley has thrived. My sense is that this is purely to protect the status quo among large local employers and nothing to do with growing the local ecosystem or smaller firms. Good luck trying to recruit top-flight talent especially engineers/programmers to Boise with most companies have a vigorous year or 2-year non-competes in place.Mike G , July 19, 2017 at 1:29 pm
> Mulhern is an idiot . . .
Ultimately, Idahoans will shoot themselves in the asses, never mind assets. I know "ecosystem" is a bullshit tell but it's another word for network effects and the network is short circuited by these laws.
Laws preventing an employee from leaving means there is less mixing of talent, making everyone worse off. That's how we learn, getting in there and doing it, whatever it is, and by moving to another employer you transfer and pick up knowledge and experience.
What makes it farcical, is that Big Co Management never envisions itself in their employees shoes.RenoDino , July 19, 2017 at 8:29 am
"And anything that would make somebody not want to move here or start a company here is going to slow down our progress."
He's right, but in the wrong way. Idaho's new feudal employment laws ensure I will never move there for a tech job.Anti Schmoo , July 19, 2017 at 8:54 am
The vast majority of the labor market is shifting gears to function as the servant class to the very rich. It is a painful transition as recent gains in labor rights are lost. Becoming a willing supplicant and attaching oneself to a rich and powerful family is the best way to better one's prospects. The last 70 years was an aberration. It will not return, short of a major uprising. Given the state's security apparatus that prospect is extremely unlikely.RickM , July 19, 2017 at 8:56 am
Not a Thom Hartmann fanboy; he deals in glittering generalities and treats serious subject matter in a deeply superficial manner. Having been a Teamster in warehousing and metal trades; they were corrupt and in management's pocket in those places I worked. I'm a huge proponent for labor and the ideal of labor unions (as imagined by the wobblies); not the reality on the ground today.
And I do not agree with Thom's Indentured servitude meme; he gives no real examples, just generalities. I would submit that a neo-feudal system is the fact on the ground. The difference; a serf has land (and yes, he's attached to it), a house, and a modicum of freedom; as long as he takes care of his lord.
Usian's are now, in fact, prisoners of war. Living in a broken system where voting no longer counts; the very back bone of a democratic society. The "two" parties have merged into one entity looking very much like the ouroboros (a snake eating its tail).
All information is managed; and this includes the unemployment figures; pure fiction by the way. An indentured servant has work; 20 million(?) or more Usians have no work, and little hope of finding meaningful employment.
The importance of this can not be underestimated; human dignity is at stake; we're a society brought up on the importance of being "gainfully" employed. Our society is being intentionally crushed to make us serfs in a neo-feudal society.Colonel Smithers , July 19, 2017 at 9:05 am
20+ years ago in Athens, GA, there was a local chicken place. Good food if you like that kind of thing. Come to find the employees who fried the chicken and worked the service counter were forbidden by the language of their "contracts" to quit for a dollar an hour more at another local restaurant. The first company didn't actually have the means to take its former employees to court, but they had the "right" to do so. Bill Clinton, neoliberal to his rotten core, was happily the president, feeling our pain. And his own, courtesy of Newt Gingrich et al.oaf , July 19, 2017 at 9:39 am
Thank you, Rick. It was not just our pain that Clinton and Nootie were feeling. Speaking of Mr Bill, his family's role in Haiti, amongst other places reduced to penury, should earn them a place in infamy.jrs , July 19, 2017 at 10:41 am
"we're long past the point where complaining or sitting on the sidelines is an option."
but marches and *Occupy*s (sp?) FEEL SO GOOD!!! like we are ACTUALLY MAKING A DIFFERENCE!jawbon , July 19, 2017 at 11:30 am
he didn't suggest that, maybe that's what he meant, maybe somewhere else in his communications he says that, but it's not in the article.
Yes a problem is people don't know where or even how to apply any sort of pressure to change things
But one plus of these things being somewhat decided on the state level, is it is more obvious how to go about change there than with the Fed gov where things seem almost hopeless, try to elect people who stand against these policies for instance, easier done some places than others of course, butdifferent clue , July 19, 2017 at 8:02 pm
Occupy did make a difference, at least in how the public paying attention mostly to broadcast news and the "important" newspapers were concerned. Young people, especially, began to realize what they were up against in this corporatized economy where all the power went to the wealthy.
I'll bet a lot of Occupiers actually began to understand just what Neoliberalism meant!
And the amount of planning and effort the Obama WH spent organizing the Federal agencies and state/local governments to shut down the Occupy encampments indicated to me just how much they feared the effects of Occupy.Enquiring Mind , July 19, 2017 at 10:03 am
Well . . . Occupy was clearly making enough of a difference that the Obama Administration worked with the 18 Democratic Party Mayors of 18 different cities to stamp it out with heavy police stompout presence. The Zucotti clearout in NYC, for example, was just exactly the way Obama liked it done.Vatch , July 19, 2017 at 10:05 am
People subject to politicians should begin a coordinated effort to use a common approach to get the truth. Demand transparency, with all campaign contributions, lobbyist contacts, voting records, committee memberships and such all in one place. Use that information to provide a score to show the degree of voter representation. Not sure how that would work, just brainstorming to try some new approach as current ones have failed.Softie , July 19, 2017 at 10:30 am
A couple of months ago, this article was published:
These days, even janitors are being required to sign non-compete clauses. When Krishna Regmi started work as a personal care aide for a Pittsburgh home health agency in 2015, he was given a stack of paperwork to sign. "They just told us, 'It's just a formality, sign here, here, here,' " he said. Regmi didn't think much of it. That is, until he quit his job nine months later and announced his decision to move to a rival agency -- and his ex-employer sued him for violating a noncompete clause Regmi says he didn't know he had signed. The agreement barred Regmi from working as a personal care aide at another home health agency for two years.
. . . . .
Bills in Maine, Maryland and Massachusetts would restrict noncompete agreements that involve low-wage employees; New York Attorney General Eric Schneiderman, a Democrat, is pushing for the same change in his state. Proposals in Massachusetts and Washington would also restrict the agreements for other types of workers, such as temporary employees and independent contractors.
Such bills face an uphill struggle, however, often because of stiff opposition from business. "Non-compete agreements are essential to the growth and viability of businesses by protecting trade secrets and promoting business development," the Maryland Chamber of Commerce said in written testimony opposing a bill Carr introduced that would have voided agreements signed by workers who earn less than $15 an hour. The bill passed the House in February but died in the Senate.
. . . . . .
Some good news:
In California, North Dakota and Oklahoma, the law says the agreements are unenforceable; judges will just throw them out. In other states, statutes and case law create a set of tests that the agreements must pass. In Oregon, for instance, they can only be enforced if workers have two weeks to consider them before taking a job, or if the worker gets a "bona fide advancement" in return, such as a raise.
States have tightened up enforcement criteria in recent years, propelled by news reports, Starr's research and encouragement from the Obama White House. In addition to Illinois' law banning noncompete agreements for low-wage workers, last year Utah passed a law that voided agreements that restricted workers for more than a year; Rhode Island invalidated them for physicians; and Connecticut limited how long and in what geographic area physicians can be bound.
Yet Starr's survey research suggests that tweaking the criteria may have a limited effect on how often the agreements are signed. In California, where noncompete agreements can't be enforced, 19 percent of workers have signed one, he said. In Florida, where the agreements are easily enforced, the share is the same: 19 percent.Jacob , July 19, 2017 at 11:00 am
The author fails to point out that H1-B is also indentured servitude.gepay , July 19, 2017 at 11:23 am
The merging of corporate power with the state is called "fascism." This was described by both Benito Mussolini and FDR's vice-president Henry Wallace. But the term "fascism" isn't mentioned in the article. Importantly, fascists are sworn enemies of communism and socialism, and this is how they can be identified.d , July 19, 2017 at 12:58 pm
NC is one of the few blogs where I read the comments.- this was a good article until the wtf comment at the end. Great Britain in an 1833 Act of the Parliament of the United Kingdom abolished slavery throughout the British Empire (with the exceptions "of the Territories in the Possession of the East India Company" (how is that not surprising), Ceylon, now Sri Lanka, and Saint Helena; the exceptions were eliminated in 1843). "Who ya gonna get to do the dirty work when all the slaves are free?" Indentured servants from India – the biggest ethnic group in British Guiana (now Guyana) are from India Indians. The US is definitely getting more feudal.different clue , July 19, 2017 at 8:09 pm
while i dont disagree thats it not happening, it just seems extremely short sighted, as without a large growing middle class, corporations are dooming them selves to lower income (profits) in the long term. but then no one can really accuse corporations of having a long term viewBenedict@Large , July 19, 2017 at 1:30 pm
But perhaps the rich people hiding behind the corporate veil are motivated by class sadism, not class greed. Perhaps they are ready to lose half what they have in order to destroy both halves of what we have.Mike G , July 19, 2017 at 5:27 pm
I don't see the problem. You're getting somewhere around minimum wage, and so a lawyer wouldn't take you even if you knew how to find one suitable, which you don't.
So you look at your boss and say, "Sue me." What's the gut to do? Hire a lawyer? Use one on staff? This is a civil case, so what damages is he claiming?
Then how's the judge going to look on this. Any judge I've known would be pissed livid to get stuck with a bullcrap case like this. Imagine when every judge is looking at his docket filled with this nonsense. How long before he starts slapping your boss with contempt?
We're sitting around complaining how bad our bosses are, bet we have another, must worse problem. Employees have turned to wimps over their boss's every utterance. Here's a tip. Probably a half and more of whatever is in you employment "contract" (it probably doesn't even qualify legally as one) is either illegal or unenforceable. Pretend it isn't there.
And above all, STOP rolling over to these jerks. If your biggest problem is a non-compete on a minimum wage contract, your world has already fallen apart. If your bosses problem is that he thinks he needs them, his world is about to.Edward , July 19, 2017 at 2:31 pm
It's about bullying and intimidation. Like most bullies, the companies are cowards who would back down if challenged, because it would make little economic sense to sue minimum-wage ex-employees. They're relying on the employees being too cowed to call their bluff, so they choose to stay even if unhappy.Swamp Yankee , July 19, 2017 at 2:49 pm
Non-compete clauses sound like something that will create a hostile work force; that may not be so good for these companies. Articles like this make me think of "Space Merchants", an amusing science fiction satire on capitalism by Pohl and Kornbluth.Swamp Yankee , July 19, 2017 at 2:58 pm
The East India Company did not establish a foothold in Virginia! That was the Virginia Company! This basic factual error mars an article that otherwise makes a very good point.Chauncey Gardiner , July 19, 2017 at 7:28 pm
Nor was Virginia a State at the time -- a colony until the Revolution. These are critical distinctions.
This is the kind of thing that drives history teachers crazy.
Perhaps there are other options in responding to the types of abuse detailed in this post, in addition to the political action Thom Hartmann called for. One such action might be characterized as "Passive NonParticipation" with your brains, craftsmanship and know-how to the extent possible, yet still retain your job.
In the waning years of the Soviet Union, the mantra was "They pretend to pay us, and we pretend to work." I suspect many American workers have already figured out the minimum amount of work necessary to retain their jobs and incomes, hence the recent decline in one of the "elite's" most cherished metrics, "productivity" (besides wealth concentration, of course).
Jun 30, 2017 | www.nakedcapitalism.comBy Daniel Gros, Director of the Centre for European Policy Studies, Brussels. Originally published at VoxEU
Trade liberalisation has been a significant driver of globalization over the past half century. However, global trade has slowed down in recent years. This column argues that globalization can also be driven by higher commodity prices can also drive, as commodities constitute a large fraction of global trade. This is reflected in trade volumes and commodity prices, which increased until around 2014 but have fallen since. However, commodity price-driven globalization implies lower living standards in advanced countries, as the higher commodity prices diminish the purchasing power of workers.
Trade and international financial transactions have grown massively in recent decades. This phenomenon, also called globalization, is often described as a 'mega-trend'. Business and political leaders never tire of repeating that 'globalization' is the future, that it delivers more jobs and higher incomes. However, more recently globalization seems to be in retreat-in 2015 trade actually fell, both in absolute terms and relative to GDP. Does this mean globalization has gone into reverse (OECD 2016, IMF 2015, 2016)?
In this column, I argue that the slogan 'globalization equals growth' is wrong. There is no general economic theorem that links more trade to growth and other economic benefits. Economic theory implies only that, under most circumstances, lower trade barriers will lead to more trade and more jobs. The simplification, that more trade is thus always beneficial, is not warranted. If trade increases for reasons other than the lowering of trade barriers, it is far from clear that this will benefit everybody.
The distinction between globalization driven by lower trade barriers and increases in trade driven by other factors is not just an academic point. It is the key to understanding why globalization has become so unpopular in most advanced countries, and why the recent slowdown in trade is not something to worry about.
What Drove 'Hyper-Globalization'?
The massive increase in trade flows over the last two decades has always been difficult to explain with 'classic' causes, such as trade liberalisation lowering trade costs. Tariffs (and other trade barriers) had of course been reduced radically in several stages in the 1960s, 70s, and 80s. However, by the late 1990s the remaining tariffs were already rather low; and many non-tariff barriers (such as the Multi Fibre Arrangement, which had seriously limited trade in textiles) had also been eliminated. 1
Transport costs of course fell with containerisation, but this improvement had yielded most of its benefits by the late 1990s. Estimates of the overall cost of trade based on the ratio of CIF prices (which incorporate transport costs) and FoB prices (which do not) actually suggest that transport costs slightly increased over the last 20 years; before1995 they had fallen almost continuously (Baldwin and Taglioni 2004). Figure 1 shows that transport costs have fallen again very recently, but that this coincided with a slowdown of trade – the opposite of what one would expect.
Figure 1 Word transport costs
How can one reconcile 'hyper-globalization' (Subramanian and Kessler 2013) with stagnating tariffs and transport costs? Baldwin (2017) provides one answer. He argues that the key driver of globalization today is the falling price of 'transporting' ideas, as opposed to the cost of moving goods.
This contribution provides an additional, maybe complementary, explanation-higher oil (and other commodity) prices increase both trade volumes and transport costs for goods, but not ideas. The impact of oil prices on transport costs is clear-fuel is an important element of overall transport costs. A sharp increase in fuel prices can more than outweigh, at least in the short to medium run, the costs savings due to containerisation. (Cosar and Demir 2017 also argue that most of the cost savings from the latter have been realised.)
But the key point is that higher commodity prices also automatically create more trade, because commodities constitute a large fraction of global trade.
An Illustrative Example
Assume that one tonne of steel and ten barrels of oil are needed to produce one car. In 2002-03, that bundle of raw materials was worth around $800, or about 5% of the value of a car priced at $16,000. This implies that during the early 2000s, industrialised countries had to export five cars for imports of 100 bundles of these raw materials. By 2012–13, the value of the raw materials needed for one car increased to about $2,000, now representing about 10% of the cost of a car (prices of cars had gone up much less). Industrialised countries thus had to export 10 cars, double the previous quantity, for the same amount of raw material imports.
This example shows that the value of trade would double if commodity prices double. There is thus a direct link between the growth of trade and commodity prices. Increasing commodity prices lead to more trade (globalization), whereas falling commodity prices have the opposite effect.
An immediate objection to this example is that it looks at the value of trade, but one also finds that over the last decades the growth of trade in volume has exceeded that of the volume of real growth. However, this excess growth in trade volume also follows in this example-an industrialised country would need to double its exports in volume just to pay for an unchanged volume of raw material imports.
Since food, fuels, and raw materials make up about a quarter of global trade, the huge price movements in raw materials, especially energy, over the last few decades, must have had a big impact on aggregate trade figures. The run up in commodity, and especially crude oil, prices until about 2014 drove hyper-globalization, and the fall in prices since then has now reduced globalization. There is thus little need to look for other explanations for the recent slowdown in trade.
Figure 2 illustrates this phenomenon with three lines, each of which show three variants of the global trade/GDP ratio. The top-most line is just the ratio of total global exports to global GDP. It is the one that shows most globalization-trade accounted for a little over 15% of GDP in 1995, but 25% at the peak in 2007 (an increase of almost 10 percentage points).
The middle line shows global exports of manufacturing goods as a percentage of GDP. The difference to the first line is, of course, trade in raw materials, which increased in value along with their prices, as argued above. Trade in manufacturing goods shows much less globalization, having increased from only 13% to 17.5% of global GDP.
The lowest line takes into account the fact that higher raw material prices also means that industrialised countries have to export more manufacturing goods to pay for their more expensive raw material imports. This last line, which could be called 'manufacturing trade net of payment for raw materials' shows even less globalization, with the ratio relative to GDP going from 10.5% to 13.6% of global GDP (an increase of only 3 percentage points, one third of the headline increase mentioned above).
Figure 2 World trade as a percentage of GDP
Source : Own calculations based on OECD and WTO data.
This decomposition of trade flows suggests that there has indeed been some globalization, but it has been much less strong than the hyper-globalization one sees in the aggregate data. Moreover, the recent fall in commodity prices can fully explain the fall in trade since 2014 with trade in 'net manufacturing' showing no 'de-globalization'.
But back during the heyday of hyper-globalization, no responsible politician dared to explain that globalization driven by higher commodity prices would have different implications (for advanced economies) than globalization driven by trade liberalisation-this new globalization meant lower living standards in advanced countries as higher commodity prices diminished the purchasing power for OECD workers. The widespread popular disenchantment with globalization can thus be easily explained-workers in Europe and the US were told that more trade would make everybody better off. But in reality there was no 'surplus' to be distributed, and workers just noticed a decline in their living standards. 2
But hype and exaggeration are sure ways to bring a valid cause into disrepute. This is what has happened to globalization. The decades of gradual liberalisation of trade and capital flows that followed post-war reconstruction fostered a resumption of global trade that was hugely beneficial. However, at exactly the point when economic analysis would suggest that these gains from trading more freely were largely exhausted, actual trade accelerated. This surge in trade was driven largely by higher commodity prices and could not deliver higher living standards for workers in industrialised countries.
A popular backlash was thus unavoidable and Donald Trump became its standard bearer. The political consequences in Europe are also visible-the Brexit referendum, the difficulties in ratifying the free trade agreement between the EU and Canada (CETA) and the stand-still in the negotiations on the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US are all expressions of this disenchantment with globalization.
What Could Be Done to Avoid Throwing the Baby Out With the Bath Water?
A first step would be to stop the overselling. CETA and TTIP would be useful to have, but the economic benefits can only be of second order importance (and the potential damage feared by some as well). A second step would be to look where there are still trade barriers whose removal could bring significant welfare benefits. They are likely to be found in emerging markets, whose tariffs and non-tariff barriers are still several times higher than those of the EU or the US. European trade policy should thus concentrate on free trade deals with India or China, rather than the US.
See original post for references0 0 5 1 0 This entry was posted in Commodities , Free markets and their discontents , Globalization , Guest Post , Income disparity , Politics , The destruction of the middle class , The dismal science , TPP on June 30, 2017 by Yves Smith . Subscribe to Post Comments 19 comments justanotherprogressive , June 30, 2017 at 10:38 amChrisAtRU , June 30, 2017 at 11:43 am
Silly boy! What makes you think that Globalization was ever meant to grow "economies"? It was never more than a means for mega-corporations to improve their bottom lines just another form of arbitrage .sgt_doom , June 30, 2017 at 2:29 pm
Globalization and the "free trade" it espoused were – in the words of economist Ha-Joon Chang – tantamount to ladder-kicking :
"His conclusions are compelling and disturbing: that developed countries are attempting to 'kick away the ladder' with which they have climbed to the top, thereby preventing developing counties from adopting policies and institutions that they themselves have used."RBHoughton , June 30, 2017 at 9:06 pm
What Drove 'Hyper-Globalization'?
What a silly question!
Inflating financial assets - theirs (the super-rich), not ours!CD , June 30, 2017 at 11:22 am
The inclusion of the fatuous 'trade in money' that our agreements contain suggests you are right. Ripping-off by agreement might be the new game.JTMcPhee , June 30, 2017 at 1:56 pm
Yes, it's surprising how most politicians and economists have missed this. Globalization was always meant to grow corporate revenue in their home saturated markets. Their effects on their home countries' welfare or their home country employees was not important.
Trump voters showed us otherwise.
Also, mergers are not about scale economies or some market benefits. Mergers and acquisitions are about letting top execs ask for higher benefits.
It's amazing that few see thru this persiflage.Massinissa , June 30, 2017 at 3:03 pm
Which corporations have "home countries?" Any more than "our" empire is any respecter of silly old national boundaries. Nations were and are just springboards for "commercial interests " https://www.librarything.com/work/73551 They're the substrates that made and make "legal" the giant falsehoods and frauds that are corporate personsEnquiring Mind , June 30, 2017 at 7:06 pm
Theres a reason corporations are called 'multinationals'. They don't have actual 'home countries'.CD , June 30, 2017 at 5:25 pm
Once upon a time, we older people learned about MNCs and their penchant for playing countries off against one another. That seems so quaint in retrospect, given the more brazen behaviors on offer. More recently, families give up citizenship to save some wealth and to hide some wealth. To what kind of world are they running? When loyalty, duty and character become passé, then the replacement characteristics are cause for alarm and disgust.Steven , June 30, 2017 at 11:35 am
My overall takeway - Decisions by large corporations have huge consequences for the locals, especially if their jobs swim overseas. Locals' feelings at some point, maybe years later, become their votes and political opinions.
So if this is correct, Trump is the payback, greatly delayed. B Clinton's and Obama's politics changed our economy and that in turn became the new politics.
So economics has become politics, and not for the better.Left in Wisconsin , June 30, 2017 at 12:13 pm
The widespread popular disenchantment with globalization can thus be easily explained-workers in Europe and the US were told that more trade would make everybody better off. But in reality there was no 'surplus' to be distributed, and workers just noticed a decline in their living standards.2
There was a surplus alright. But even if promised to "everybody" it didn't go and wasn't intended to go – to "everybody".
Workers without jobs not only can not enjoy the fruits of globalization (AKA lower prices by employing the 'slave labor' of developing nations and raping and pillaging their environment). Western workers can not pay into their (unlocked by resident politicians and oligarchs) 'Social Security lock boxes'.PKMKII , June 30, 2017 at 2:15 pm
I don't get a couple of things said in this post:
1. How come the huge run-up in commodities didn't translate to higher (measured) inflation? The author even makes the point that car prices went up much less than steel and oil. (Also, the doubling of oil and/or steel prices seems strange to me, as I thought neither had seen a big run-up in this period.) Granted problems with measured inflation but clearly the bigger problem with working class real wage growth was wage pressure, not inflation pressure.
2. The author seems to presume that trade must balance within countries: exports of cars must double to pay for higher commodities costs. That certainly does not explain car exports from the US (not to mention the lack of balanced trade). And I don't think it explains car exports from Europe or Asia either, unless the argument is that higher commodities costs affected exchange rates, lowering them for car exporters compared to commodities exporters. Nor would it seem to explain Chinese exports, again unless there is some argument as to why China "needs" (in an economic, not political, sense) to run a particular level of massive trade surplus.
3. The author completely ignores China's accession to the WTO in 2000, which some recent studies have suggested was the primary driver for dramatic increases in China exports to US from that point.sgt_doom , June 30, 2017 at 2:32 pm
The lack of car inflation may be explained by the increase in the same period in auto loan debt . If you can make a hefty profit off the loan interest and other service fees, they you don't need to increase the base car price. There may even be a motivation to keep the prices low, as the cheap sticker price gets the customers in the door, and it's not until they've gone through the ringer with the salesman and loan guy that they realized they've been duped into paying way more than advertised.Jeremy Grimm , June 30, 2017 at 4:53 pm
1. By globalizing wages downwards.RBHoughton , June 30, 2017 at 9:10 pm
There are a lot of things said in this post that I don't get. [And is this guy really Director of the Centre for European Policy Studies, Brussels? That's scary!]
This author explicitly equates trade with globalization and implicitly equates growth with increases in GDP figures. I believe the term "globalization" covers much more than trade. I believe it also includes the deliberate movement of production out of the U.S. [or out of Europe] to far-away lands with cheaper labor and fewer annoying regulations. I believe it also includes an intent to weaken labor and nation states.
I doubt that figures for GDP provide an adequate measure for growth and similarly doubt that trade measured in terms of a currency provides an adequate measure for trade. Although I suppose this way of measuring trade might support the assertion:
"But the key point is that higher commodity prices also automatically create more trade, because commodities constitute a large fraction of global trade."
I don't know what that assertion really means given my bias against the measures this author uses. In turn, this assertion leads to another odd assertion:
"This example shows that the value of trade would double if commodity prices double. There is thus a direct link between the growth of trade and commodity prices. Increasing commodity prices lead to more trade (globalization), whereas falling commodity prices have the opposite effect."
So using the authors terminology I have trouble with the assertion: "Globalization equals growth" is wrong. If globalization means bigger trade numbers and growth means bigger GDP numbers and if trade is a positive additive component of growth the assertion that globalization equals growth - more clearly - that globalization increases growth seems a tautology. The author's slight of hand correcting for "higher raw material prices" in the trade figures does not convince me of the title assertion - and by this point in the argument the assertion - whether true or false - is devoid of meaning for me.
As Thuto notes in a comment below the author assumes globalization driven by trade liberalization is "somehow better" - I would say the author tacitly assumes globalization driven by trade liberalization does equal growth - contribute to "true" growth. This leads to the author's conclusion that CETA and TTIP might have some marginal benefits and might cause some marginal potential damage neatly avoiding the non-trade issues in those deals - like the ISDS "investor-state dispute settlement" and various intellectual property enhancements contained in the TTP. Given that globalization by trade liberalization does grow GDP and assuming that growing GDP is a good thing for all parties the author can conclude that "European trade policy should thus concentrate on free trade deals with India or China, rather than the US."
We know how globalization's free trade deals with India or China benefited the US. Does this author really desire similar benefits for Europe?nonsense factory , June 30, 2017 at 12:21 pm
I'm with you Leftie. How inflation hardly appears in our hugely inflated western economies is one of the greatest magic tricks. We all know food and clothing has got more expensive but "inflation?" – not a hint.
I am guessing its like the paper gold market. We have the means to mis-price everything.sunny 129 , June 30, 2017 at 1:31 pm
Conditions under which trade between nation-states is beneficial to both partners:
(1) Each nation exports goods which it has a competitive advantage in producing. Agricultural products are the classic example.
(2) The profits from sale of such goods remain in the country of origin. Transfer of profits out of the country of origin mean that the country is just a plantation run by absentee landlords.
(3) Trade between the nation-states must be balanced on both sides; i.e. exports and imports are on the same scale.
(4) Both nation-states must have a condition of full employment.
Only when conditions 2-4 are met will condition 1, the ideal situation, be realized. Now, globalization of capital flows across nation-state borders (the key element of neoliberalism, or neocolonialism) defeats this. Instead of trade between independent nation-states, what we have is the imperial system – backed up by a $600 billion yearly military budget that is used to attack any entities that refuse to go along with the program, by covert means such as destablization and ultimately by military assault (as long as the target does not possess nuclear weapons, that is).
Furthermore, late 19th-century and 20th century economists have created a set of false assumptions and theorems with no basis in reality to justify this kind of thing. Notions like 'utility', 'externalities', and 'GDP' are just sloppy propaganda games; there are no 'general theorems' in economics that have any solid basis in reality – the entire game of modern academic economic theory is nothing but smoke and mirrors, whose primary function (as with Soviet economic theory and communism) is to promote the ideology of investment capitalism, protecting shareholder interests in the corporate system. If economists want to put their discipline on a sound physical and mathematical basis, they should start by studying a real science like ecology in natural science departments. My own opinion is that anything written by academic economists from the latter half of the 19th century to the present can be discarded with no loss at all.
Instead, read an ecologist like Hutchinson, and think about how those real concepts (in which there are no 'externalities') would apply to a study of human economic activity.Thuto , June 30, 2017 at 2:11 pm
Globalization favored Mega Corporations and Multi-Nationals (+ their corporate share holders, lenders) over the rest of the society including labor b/c global labor wage arbitrage!
Living standards went down for working blue collar ( and some white collar) in the West. There was some 'patchy' RELATIVE increase in living standards of their middle class in some of the Countries, like India!
The CAPITAL is mobile but the LABOR is NOT!JTMcPhee , June 30, 2017 at 2:25 pm
The author seems to be arguing that globalization driven by trade liberalization is somehow better and more palatable than globalisation driven by higher commodity prices. Yet history has demonstrated that trade liberalization leads sooner or later to the transfer of manufacturing capacity from high to low income countries, wiping out entire swathes of jobs in said high income countries. So the argument that globalization driven by trade liberalization benefits workers in rich countries is shaky at best and demonstrably false at worst
So much understanding of "what's wrong" (from the mopes' standpoint, of course) and so little in the way of prescriptions for "what is to be done" about conditions as described Kind of like Tomgram, from the more military- and foreign-adventurism corner of the blogspace
One might guess that we thinking people, with our perceptions and little debates about syntax and the elements of political economy and composition skills, are maybe just tolerated by the Blob, because we don't pose much of a challenge to oligarchy and hegemony And we vent off righteous steam that might get up too much of a head, and also reinforce, via our perceptions of the massiveness of "the problem," the futility of resistance to something so yuuuuge, all interlocking directorates and self-licking incentives Small mice can sometimes avoid being crushed by the elephants' feet, if they are quick and inoffensive.
One wonders where the notion that elephants fear mice, a stock item in comedy, came from
Jun 28, 2017 | www.nakedcapitalism.comng , December 17, 2015 at 5:08 amUlysses , December 17, 2015 at 7:36 am
some one ought to do a study of/ a book on generic management. it goes back a long way. i first saw it in 1973 where i was working in boomingdale's food department. almost all the managers in the store had worked their way up fom being staff members. in 1973 the board hired a young impressive- looking harvard mba to oversee about a fifth of the departments. he was an energetic man who spent one whole day throwing boxes around in the foof department stockroom to "show the stockmen how to be more productive." after two years his section of the store was the only one to lose money, but by then he had been hired by neiman marcus. in an even higher position.
the managerial class, useless and self-rewarding, is what every corrupt society needs.- endless administrators in the college system, inventing tests for the teachers. red cross, whatever. the destruction of substance and brains and heart. its replacement with ignorance and cluelessness. what a society we're (not) building!Barry , December 18, 2015 at 11:57 am
"The managerial class, useless and self-rewarding, is what every corrupt society needs."
The eloi will continue to become ever more useless, putting insane pressures on the few remaining morlocks they allow to do all the work. Will robots save us? Not very likely, since they will be used to further enrich the parasites above all.Clive , December 17, 2015 at 5:35 am
You might want to look up Henry Mintzberg, particularly Managers Not MBAs (2004).Lexington , December 17, 2015 at 5:38 am
The BBC is another good example of how managerialism has wrecked a not-for-profit corporation. Until McKinsey infiltrated the place, the BBC didn't really have a "brand" to speak of; if it considered its corporate identity at all, it was only in terms of how its output of programming conveyed what it was supposed to be about as an organisation.
Then, it brought in the brand consultants to develop an image of what it thought it should be. Nothing necessarily wrong with that. What caused the rot to set in was when the brand image started to define the programming output. Was, the brand managers asked the producers and directors, this-or-that programme compliant with the brand guidelines?
If the BBC's brand was not merely delivering communications which are honest and have integrity but also now need to be "simple to understand", "completely neutral at all times" or "a balance of positive as well as negative content" then you end up, as we largely have, with a lot of cosy-consensus mediocrity and an institution which only serves its own internal vested interests.jgordon , December 17, 2015 at 7:55 am
some one ought to do a study of/ a book on generic management
Managerialism: A Critique of an Ideology
You're welcome ;)Sam Adams , December 17, 2015 at 8:54 am
I'm seeing a parallel to the Obama strategy of branding/looting. Corporate and government decay seem to be mirroring each other, and this new obsession among the intelligentsia with messaging over substance is a major component of that.
I'd say that this is also the reason it's impossible to get the government in order. The corporate media is in bed with the corporate state, because patriotism, and most Americans are simply too burned-out or drug-addled to question anything. And if people do sense something is wrong and want a drastic change–well then there's Trump.Procopius , December 18, 2015 at 9:54 am
This branding/looting/communications has been building since at least 1977 when undergraduate communication majors multiplied. It accelerated by 1982 when every corporate finance and law professor taught short term quarterly profit was the only responsibility of management. The combination could only lead to the current 'propaganda as responsible management' philosophy.mad as hell. , December 17, 2015 at 9:05 am
I don't know when the turning point was, but it had something to do with neoliberalism becoming the "Washington Consensus" and the dogma that everything had to be "run like a business" became universally accepted. I would guess about the Carter administration.petal , December 17, 2015 at 9:06 am
Wow -- It's an amazing story yet I should not be surprised. It's become a common theme throughout American society. We have the usual suspects, greedy, self centered individuals looking out for their interests, using the established modus operandi. Cut, slash and burn as many systems as possible while painting over the truth with colorful, truth distorting logic while enriching your self on the way.
An organization founded by Clara Barton in the 1880″s that has evolved into such a grab bag of I want my share thinking is an American tragedy of epic proportions.Melody , December 17, 2015 at 9:24 am
Funny timing. Just yesterday I was passed on the road in my area of NH by a Red Cross Hummer. It as white all over and the doors emblazoned with the red cross. In tiny print toward the back it said "donated by GM". Made me sick. Got me thinking about all of the mismanagement going back decades.flora , December 17, 2015 at 10:53 am
Personally, I'll throw any charitable discretionary money I might have into the gutter before I'd send a cent to the Red Cross. Took three strikes–but I'm done with them.
My father-in-law served in the SeaBees during WWII and initially influenced my dislike for the organization. He reported how Red Cross care packages were "SOLD" rather than distributed to intended service personnel. [Strike one!]
Much later the Twin Towers came down and I felt compelled to donate. When several weeks later I heard officials talk about the amount of contributions received, and asked us to dig deeper–they also revealed that they were setting aside (toward future disasters) at least half of donated dollars. (Whether this was true I don't know–but the fact that it made it into public discussion was not a skillful marketing ploy.) [Strike two!]
I then heard horror stories from local volunteers here on the (unaffected) part of the gulf coast who dropped what they were doing to offer help and support to Hurricane Katrina victims in myriad ways A veterinary friend–after describing the absolute chaos he encountered in the area–reported that late one night, after a gut-wrenching and exhausting day, he walked into the Red Cross tent for a cup of coffee. Not without paying for it–$1/cup–he was told. [Strike three!]
There are local charities still deserving of my small discretionary donations–so I won't truly be throwing money into the gutter; but if my only choice was give to the RC or throw it away: I'd throw it away.
Thanks for the article. I think further investigation would show that others charities–particularly those like the American Diabetes Association (with which I'm familiar)– have adopted that same managerialism model.JEHR , December 17, 2015 at 11:11 am
"The Marketers' Best Laid Plans Led to Declining Contributions"
This year, for the first time ever in my adult life, I did not sent a contribution to the Red Cross. All the reasons listed in this excellent post went into my decision not to contribute. I still feel bad about it, but I can't 'enable' continued bad management of the Red Cross.RUKidding , December 17, 2015 at 11:24 am
This article proves yet again that by their words shall they be known. In this day and age when almost everything from politics to education is being subsumed by business lingo, it's interesting to see by the Red Cross example where it will all end up.
The Red Cross which depends on volunteers and donors gets master marketers and business expertise and becomes "branded" as a business; helping others in distress becomes being efficient; preventing and alleviating suffering becomes creating a profitable place where executives get mighty big bonuses; the bottom-up organization becomes a top-down monolith; taking care of emergencies becomes profit-making exercises; all in all, this Red Cross refurbishment reflects the society that we have become–the 1% versus the 99%. When organizations are defined in financial and business terms, there is no room for alleviating or preventing human suffering.cyclist , December 17, 2015 at 11:27 am
Crapification of "charities" abounds. I've lived in So CA at least part time since the '90s. San Diegans don't have a lot of love for the San Diego Red Cross:
I stopped giving to the Red Cross a long time ago bc of mis-mangement of money and making sure that the Big Wigs at the top get THEIRS first and screw everyone else. It's unfortunate, as this organization probably does some good stuff, but it's priorities are not good.
I donate a certain amount every year, and I look very closely and carefully at the organizations to whom I give my hard-earned dollars. Advise everyone else to do the same. There's a lot of "charities" out there that exist primarily to enrich those at the top, and any good that's done for others – whom the "charity" alleges to serve or support – is strictly incidental.
Good article re American Red Cross. Crapified.Jim A , December 17, 2015 at 11:29 am
This is a great dissection of the decline at this august organization. Partners In Health is an example of a charity worth supporting.
BTW, I found the Wikipedia bio of the Bonnie McElveen-Hunter very creepy. Looking at the website of her company, Pace Communications, it took me awhile to figure out what they really do, which seems to be something on par with publishing airline magazines. It really isn't clear why this woman should have attained her power and status – e.g. trustee of the RAND Corporation? Really? Seems emblematic of the rot at the top of the US elite.reslez , December 17, 2015 at 4:37 pm
Well publicized failures in the Hurricane Sandy response and the failure of their attempts at increased revenues through price raises, "branding" and marketing aside, the ARC WAS in increasingly dire straits when she took over. By many accounts centralizing things and closing many local branches WAS a necessity, because cutting overhead was desperately needed in an organization that was loosing large amounts of money every year. This is often that case with these "superstar managers," If everything is working well the organization doesn't bring them on. But when an organization is already floundering, the Boards look for a "superstar" that can "turn it around." It's a perfect situation for these guys: (they're mostly men) If the company goes bankrupt, they say that it was in worse shape than they thought and nobody could have saved it and it it DOES turn around (often for completely exogenous reasons) they can take the credit.
The Washington Metropolitan Area Transit Authority, which runs the subways and buses in Washington DC recently went through a protracted process of hiring a new director because there was a real deep divide on the board between those who wanted a transit executive and those who wanted a "turnaround specialist." They ended up with the latter and there's already talk about a "charm offensive" to try and woo more ridersMichael G , December 17, 2015 at 12:30 pm
The Red Cross was bleeding red ink, partly because of less demand for blood products in surgery (they sell the blood that gets donated) and partly because their labeling system was out of date, which reduced demand compared to their competitors' products. This is something the ProPublica article makes clear that isn't really referenced in the HCR post.
So the Red Cross brought in a generic marketer/manager who did what they do best–chopping off employee heads while destroying what made the organization viable. The Red Cross isn't the kind of non-profit that can survive the loss of goodwill in a community. And they still haven't addressed the labeling problem.KYrocky , December 17, 2015 at 1:42 pm
NC readers might be interested in this report, which caused quite a stir in the UK yesterday. Needless to say it has been denounced as worthless by the charities concerned.
I guess the question is whether you mind that when you give a dime, a nickel goes to getting money from the next person
http://www.trueandfairfoundation.com/content/file/feature/review-hornets-nest-report-into-charitable-spending-UK-charities-12-dec-15.pdfdigi_owl , December 17, 2015 at 2:59 pm
Labeling these people generic managers or whatever is far too kind. The goal and driving force of these people was to extract more money from those most in need of charity and assistance. These people are shitty human beings, so call them what they are. The changes that they have wrought within the Red Cross organization has deprived countless suffering peoples of the good will and needed services that would have been provided by this organization BUT FOR THESE ASSHOLES.
Charities are not businesses. Charities, by definition, plan to GIVE things or services to others, not sell them, not to make profit. Putting profit loving Randians, possessed with the goal of using corporate profit taking methods, in charge of a charity is like putting "arsonists for profit" in charge of the fire department. The people that suffer are those that NEED charity, be it in the form of shelter, services, goods, or information, and we, as a society, are diminished.
Sacrificing the Red Cross on the alter of conservative economic ideology is tragic.bob , December 17, 2015 at 4:28 pm
Sadly the problem is spreading internationally, as US universities is seen as cream of the crop.just_kate , December 17, 2015 at 5:18 pm
I have to bring up the post 911 witchhunt by fox news on the red cross too.
That seemed to the the turning point, or near it.
"you mean not all of our donations are going to NYC?"
With Bill Oreilly yelling and throwing spittle at the TV cameras, a change had to be made. I'm sure more than a few of his budddies, who are very Professional Managers, were first in the door.
It's just another part of the planned destruction of any sort of locally based ability or lobby.Brooklin Bridge , December 17, 2015 at 6:43 pm
years ago i worked for a marketing firm that did a significant amount of work for the organizer of the avon 3 day breast cancer walks and the amount of money wasted on frivolous items and activities made me sick. really opened my eyes about charities and how greed and fraud can be rampant in the least expected places. don't think i can get any more cynical abt the world at this point :(BRUCE E. WOYCH , December 17, 2015 at 7:27 pm
There is not enough money in the world to pay McGovern a bonus that would make up for what she has done to the RC. Perhaps a 1000 year stint in a max security prison would be a start though.
Asset Grabbing "Capture" (University of Chicago Economics? Harvard Business ?) and pervasive Control Fraud ( credits to William Black: https://www.ted.com/talks/william_black_how_to_rob_a_bank_from_the_inside_that_is?language=en )
is a revenue seeking parasitic mission creep in the MBA world of executive profiteering and predator capitalism.
In the source article mentioned above ( https://www.propublica.org/article/the-corporate-takeover-of-the-red-cross ) we see century+ old organization established with a charter for public service disaster relief, being marketed as a revenue stream with a potential for mass returns based upon the "brand" quality of saving peoples lives in catastrophic events. The article is part and parcel with how private interests have been dominated by profit driven incentives even in the most sacred trust areas of the public domain of non-profit charities essentially built on the back of American volunteers. How AT&T crony capital took over this organization and adopted it for their own monetary interest is not just a story of lost vision but of totally perverted revision gone off track from its founding purpose.
But make no mistake about it, this is only the tip of the iceberg where private asset stealth is involved in milking and bilking the public trust. the medical Institutions generally across the country have been insidiously going the same perverted path dependent way of revenue streaming as health and wealth as the definition of healthy relief.
The American Red Cross is a storied non-profit organization. It provides disaster relief, provides a major part of the US blood supply, and has important public health teaching functions, such as teaching cardio-pulmonary resuscitation (look here ). Nonetheless, its operations have become increasingly controversial. ProPublica has been investigating them for years . The latest ProPublica report, entitled "The Corporate Takeover of the Red Cross," showed how this renowned organization has suffered under generic management/ managerialism , providing another case study showing how bad generic management and mangerialism are for health care and public health.
We have frequently posted about what we have called generic management , the manager's coup d'etat , and mission-hostile management. Managerialism wraps these concepts up into a single package. The idea is that all organizations, including health care organizations, ought to be run people with generic management training and background, not necessarily by people with specific backgrounds or training in the organizations' areas of operation. Thus, for example, hospitals ought to be run by MBAs, not doctors, nurses, or public health experts. Furthermore, all organizations ought to be run according to the same basic principles of business management. These principles in turn ought to be based on current neoliberal dogma , with the prime directive that short-term revenue is the primary goal (sometimes in the for-profit sphere called the shareholder value principle, look here .)
The ProPublica article showed how the leadership of the American Red Cross was given over to generic managers; how they ran the organization based on generic business management principles; and how the results were bad for the organization's mission. I will address each point with quotes from the article, and add the commentary that was lacking in a straight investigative journalistic report. The New CEO is a Generic Manager who Specialized in Marketing
Gail McGovern became Red Cross CEO in 2008. Her academic background was in the "quantitative sciences." Her first job was as a computer programmer. Then,McGovern climbed steadily through the ranks at AT&T. By the mid-1990s, she was head of the company's consumer markets division .
McGovern left AT&T in 1998, then spent four years at Fidelity Investments, where she was promoted to be the head of the retail mutual fund and brokerage business. Then came six years as a marketing professor at Harvard Business School....
On the other hand, she apparently had no specific experience, training or expertise relating to the mission of the Red Cross, and specifically no experience, training or expertise in public health, health care, blood banking, or disaster relief.
She Believes in the Primacy of MarketingHer academic writings spell out her theory of corporate leadership. 'In many organizations, marketing exists far from the executive suite and boardroom,' she and her coauthors wrote in the Harvard Business Review. Companies that make this mistake are doomed to 'low growth and declining margins.'One could argue that perhaps in the long run, a good product that sells itself might be better for a manufacturing firm than a temporarily persuasive marketing campaign. Even so, the mission of the Red Cross is not first to grow and make more money, or even to sell products, but instead it is
The American Red Cross prevents and alleviates human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors.
She was Hired by the Red Cross to Promote Generic Management with Emphasis on Marketing.
Ms McGovern was hired at a time when the dogma that business managers ought to run everything was becoming very prominent.
McGovern, selected after a global search by a headhunting firm, was seen as a candidate who would bring private-sector methods to the nonprofit.
"Isn't it great that we have someone that really has had that business expertise in developing and working with a brand and recognizing the power of it ?" [Red Cross Board Chairwoman Bonnie] McElveen-Hunter told the Washington Post at the time.
Note that the Chairwoman of the Board of Governors herself was
a wealthy Republican donor appointed by President George W. Bush in 2004
According to Wikipedia , she is a businesswoman whose undergraduate degree was in business, who worked for Bank of America and then founded Pace Communications, and who also has no discernable experience or expertise in health care, public health, or disaster relief.
The ProPublica article did not suggest that Ms McElveen-Hunter or anyone else really thought through how a generica manager practicing managerialism would actually benefit the mission of the Red Cross.
The CEO Recruited Other Generic Managers
As part of her effort to run the Red Cross more like a business, McGovern recruited more than 10 former AT&T executives to top positions. The move stirred resentment inside the organization, with some longtime Red Cross hands referring to the charity as the 'AT&T retirement program.'
Again, one would expert a generic manager to feel most comfortable amongst others of her ilk. Again, any consideration of whether running the Red Cross "more like a business" would improve its success as a charity was not evident. The New Generic Managers Relied on Generic Management Dogma
They Established Centralized Control
The work of the Red Cross was traditionally done by local chapters. The new generic managers sought to decrease their independence from "corporate." So,Each of the Red Cross' more than 700 chapters had its own bank account, tracked its own volunteers, and ran its own computer system. McGovern hoped to realize considerable savings by consolidating these back-office functions, creating what she dubbed 'One Red Cross.'The notions that different chapters might face different challenges, and hence that flexible local control might do better addressing these challenges than would centralized top-down command were not apparently considered.
They Cut Costs, Particularly Through Cutting Employee Benefits and Laying Them Off
and hence tried to enhance short-term revenue:She also got to work cutting costs : there was a round of layoffs ; she killed the charity's generous pension program and to employees' retirement accounts.Also,
When McGovern was hired as CEO, there were over 700 Red Cross chapters across the country. Today, there around 250, though some former chapter offices stayed open even as they were folded into other chapters. The Red Cross declined to say how many offices it closed.
Over the course of McGovern's tenure, the number of paid employees fell from around 36,000 to around 23,000 and the Red Cross today spends several hundred million dollars less a year than it did in 2008. (Most of the staff cuts were from local chapters, not the blood business, though the Red Cross declined to provide a breakdown.)
They Focused on Marketing and Public Relations
consolidated, powerful, breathtaking marketing .'
a brand to die for ,' she often said.
In addition,The Red Cross' chief of fundraising, a former colleague of McGovern's from Fidelity, told the assembled officials that the organization should attract far more than the $520 million in donations it was bringing in annually. ' Strength of brand ,' his PowerPoint said, 'justify results inAlso, CEO McGovern chose Jack McMaster to run the public health training operation, praising McMaster to Red Cross staff as a master marketer and a trusted former colleague [at AT&T].
As an aside, actually,After leaving AT&T, he took a job in 1999 as CEO of a Dutch telecom company called KPNQwest. In just a few years, he had run it into what Reuters called a ' spectacular collapse prompting a bankruptcy, a storm of lawsuits, and comparisons to Enron . Just months before the company went under, McMaster publicly boasted that it was poised for dramatic growth.This suggests that McGovern placed far more priority on hiring "master marketers" than finding trustworthy leaders. Of course, a CEO who is mainly a professional marketer may see marketing as central to whatever organization she is running. The notion that the Red Cross had such a wonderful brand because it used to do wonderful things did not apparently occur to the new generic marketers. Furthermore, the notion that even "master marketing" may not hide the undermining of the organization's mission also did not occur.
They Suppressed Opinions They Did Not Want to Here
As discontent among staff rose (see below), leading to anguish expressed on social media,critical posts later disappeared from the Facebook page. Moderator Ryan Kaltenbaugh reminded participants that the group was intended to be ' a POSITIVE forum sharing ideas, stories, pictures, links, videos and more across our great country.'
' [P]lease (please) refrain from posting your negative personal views
To a leadership obsessed with marketing, appearance may have seemed to be everything. Yet again, suppressing the bad news does not make what generated it disappear.
They Paid Themselves Very WellWe have often discussed how executive compensation in health care now seems to rise beyond any level that could be justified by the executives' actions and performance. A central problem with managerialism seems to be that now top managers can virtually set their own pay. Thus, they have become value extractors, more focused on their own enrichment than their organizations' ultimate success. The ProPublica article did not explicitly discuss executive compensation except after the failure of the expansion plans by the "master marketer" McMaster,Amid layoffs in the division last year, bonuses given to McMaster and his team raised eyebrows within the Red Cross, a former headquarters official said.Regardless, the division failed to reach its real goal, expansion of its business.
In a statement, the Red Cross said the bonuses were appropriate because the division hit 'strategic milestones' including establishing 'a national tele-service platform and national sales and service delivery models.'
Furthermore, there is evidence that during the reign of McGovern, the top managers as a group have been very well paid, especially given that they were running a charity whose good works are largely supported by contribuations and the taxpayers. We noted in a 2011 post thatIn 2009, then CEO Gail McGovern received over a million in total compensation, $1,032,022 to be exact. Its President for Biomedical Services got $850,489. Its Executive VP for Biomedical Services got $596,309. Twelve other executives got more than $250,000. Of those, ten got more than $350,000.
Since then, while Ms McGovern's compensation has actually declined, the number of very well paid managers has actually grown. According to the organization's latest available IRS Form 990 filing, for 2013, Ms McGovern had total compensation of over $597,000, and 15 managers had total compensation over $250,000, of these, 10 were over $400,000.
So despite all the problems afflicting the Red Cross (see below, and the larger ProPublica series), the top managers still managed to pay themselves very well.
The Results were Bad
The Marketers' Best Laid Plans Led to Declining ContributionsMcMaster laid out how the CPR unit would attract more customers while at the same time hiking prices for classes and training materials in CPR, swimming, and babysitting. He believed the Red Cross brand justified higher prices than were being charged around the country.
'We thought if we raised prices, American Heart [Association] would probably raise prices, and life would be good,' McGovern said at a 2013 employee town hall meeting, referring to the Red Cross' competitor in the CPR class business. 'Didn't happen.'
Also,'A halfway competent market analysis would have told you that the bulk of our business was in selling to small businesses who viewed us as a business expense,' recalled one former chapter executive director. 'When the massive price increases arrived, it was too much and customers bailed.'This illustrates that the generic managers did not even achieve their business goal, increasing sales and increasing revenue. What did they care, though, if the bonuses still rolled in?
Centralized Control, Benefit Cuts, Layoffs, and the Marketing Focus Wounded Employee Morale and Discouraged Volunteers. Those who push generic management practices often seem blind to their adverse effects. So, many of those who taught classes - including volunteers who did the work for free - quit after being turned off by headquarters' poor communication .
Also,But much like the organization's paid staff, many of its volunteers appear deeply disillusioned . An internal survey obtained by ProPublica found volunteers around the country had a satisfaction rate of 32 percent this year - down 20 points from last year.Furthermore, driving the alienation, longtime employees and volunteers say, is a gulf that has opened up between McGovern's executive suite and the rank and file who have spent decades in the mission-focused nonprofit world.
She has surrounded herself with a tight-knit group of former telecom colleagues, they say. 'They're all people from the period when AT&T imploded,' said one former senior official. ' The priorities seem to be a reflection of what that team is comfortable with: sales and marketing .'
An internal assessment previously reported by ProPublica and NPR said national headquarters' focus on image slowed the delivery of relief aid during Hurricane Isaac and Superstorm Sandy. Officials engaged in ' diverting assets for public relation purposes ,' according to the assessment.
Layoffs and Cutback Reduced Capacity to Respond to Disasters
One example was the response in West VirginiaIn West Virginia, where several chapters have been shuttered, emergency management officials said the group's response to recent disasters has been anemic . After a recent water shortage caused by a chemical leak, the charity declined to provide any help to residents, the Register-Herald of Beckley reported . Local officials described that as business as usual for the charity. When a tornado hit in the southern part of the state, the Red Cross' inadequate response left scores of victims without enough food , according to the newspaper.Another was the response in northern California,In Northern California last year, the Red Cross shuttered the Napa County chapter and laid off disaster relief staff, according to anAlso,
presentation. Then, in September, a drought-fueled fire swept through the area, consuming more than 75,000 acres and 1,200 homes.
Because of the issues with the Red Cross' shelter , nearly all of 1,000 displaced people at the Napa County Fairgrounds - including the elderly, new mothers and children, and anyone with a pet - ended up sleeping outside in tents, cars or RVs . The problems were first reported by the Press Democrat newspaper.Local officials were furious. They say the Red Cross showed up lacking basic supplies such as Band-Aids, portable toilets, and tarps to protect against the rain. Instead the group's volunteers handed out Red Cross-branded bags of items that weren't urgently needed like lip balm and tissues.
The Red Cross responders were inexperienced and, according to residents, not enough of them spoke Spanish, the language of many of the fire victims.
In general, as told by former Red Cross volunteer Becky Maxwell, a self-described "die-hard Red Cross person for 25 years," who quit after becoming increasingly frustrated,' McGovern has fired almost all of the trained and experienced volunteers and staff, ' Maxwell told ProPublica, replacing them 'with people who have absolutely no knowledge of what the Red Cross is or does in a disaster. Not only is she setting these people up to fail but she is compromising the service delivery that is so important to the clients.'
The Red Cross Board of Governors , largely composed of well paid business managers (e.g., a former Vice Chairman of Goldman Sachs, a senior vice president of Eli Lilly, the chief financial officer of Home Depot, the executive vice president of Target), decided that a generic manager using a managerialist approach could cure the organization's perceived ills. The new CEO, who lacked any obvious experience or training relevant to the Red Cross mission, hired her former cronies at AT&T and Fidelity as managers. The new team cut costs, laid off employees, centralized management, and focused on marketing. The apparent results were fewer, less experienced, upset staff; fewer volunteers; declining interest in public health training products; and worsening disaster response.
Thus, once again, generic managers and managerialism have laid low a formerly proud charity. Unfortunately, this one also happens to have vital public health and disaster relief roles that have now been severely compromised.
Based on previous experience, it should come as no surprise that generic managers who do not know much or care much about public health and health care, and who rely on a one-size fits all management dogma uninformed by the public health or health care context or public health or health care values will end up undermining patients' and the public's health.
The real surprise is that the generic managers have up to now had no problem maintaining the managers' coup d'etat , that is, their iron grip on the leadership of most public health and health care organizations.
To prevent our ongoing downward spiral, we need to reverse the managers' coup d'etat, and return leadership to those who understand health and health care, support their values, and are willing to be accountable for doing so.
ADDENDUM (17 December, 2015) - This post was republished on the Naked Capitalism blog .
Anonymous said... December 17, 2015 at 10:36:00 AM ESTGreat post - clarifies why I am seeing the increasingly generic promotion/fund-raising communication "relationships" from many non-profit and advocacy groups lately. -Paul Rowan
afraid said... December 17, 2015 at 5:07:00 PM ESTIs Shkreli a prime example of managerialism?
Roy M. Poses MD said...
I'm afraid Shkreli is not really a typical generic manager, and certainly not typical of the CEO of a big pharma (or other health care) corporation.
Shkreli is a small time player.
Also, he is basically a hedge fund guy, and I don't believe there is any love lost between big corporate CEOs and hedgies. Finally, Shkreli was willing to say out loud what most big corporate managers would not: it's all about the money.
From the AP ( http://bigstory.ap.org/article/763ef9ae0809445e817438a79fcc979b/turing-ceo-martin-shkreli-custody-after-securities-probe )
"'No one wants to say it, no one's proud of it, but this is a capitalist society, a capitalist system and capitalist rules,' he said in an interview at the Forbes Healthcare Summit this month. 'And my investors expect me to maximize profits, not to minimize them or go half or go 70 percent but to go to 100 percent of the profit curve.'"
So I wouldn't be surprised if the big-time managerialists are cheering now that he was arrested. They can use his arrest to pretend that regulation and law enforcement are tough, and that the big-time managers don't have impunity. Furthermore, they can claim that he was just the rare bad apple.
However, a reader of this blog can see the problems are systemic. See in particular:
- December 18, 2015 at 11:48:00 AM EST
Jun 28, 2017 | economistsview.typepad.com
Sandwichman , June 28, 2017 at 01:02 AMResearchers at the University of Washington have published a study that finds a 9.4% decline in hours of work for low wage workers, earning under $19 an hour. Trouble is the study doesn't appear to take account of wage bracket creep so the hours of workers making just under $19 an hour a year ago just vanish when they get a raise to above $19 an hour.anne -> Sandwichman ... , June 28, 2017 at 05:41 AM
The EPI, Peter Dorman and Sandwichman have all weighed in with criticisms. But in all likelihood this seriously flawed study will become an urban legend "proving" that a higher minimum wage is bad for poor people.
http://econospeak.blogspot.com/2017/06/seattle-minimum-wage.htmlhttp://www.nber.org/papers/w23532.pdfim1dc -> anne... , June 28, 2017 at 05:41 AM
Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle
By Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, and Hilary Wething
This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees' earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.Research like that ought not be published, timeline used is too short to be reliable or valid and in all probability they used data skewed from limited sources.anne -> Sandwichman ... , June 28, 2017 at 05:41 AMhttp://irle.berkeley.edu/files/2017/Seattles-Minimum-Wage-Experiences-2015-16.pdfPaine -> anne... , June 28, 2017 at 06:20 AM
June 20, 2017
Seattle's Minimum Wage Experience 2015-16
By Michael Reich, Sylvia Allegretto, and Anna Godoey
This brief on Seattle's minimum wage experience represents the first in a series that Center on Wage and Employment Dynamics will be issuing on the effects of the current wave of minimum wage policies-those that range from $12 to $15. Upcoming CWED reports will present similar studies of Chicago, Oakland, San Francisco, San Jose and New York City, among others. The timing of these reports will depend in part upon when quality data become available. We focus here on Seattle because it was one of the early movers.
Seattle implemented the first phase of its minimum wage law on April 1, 2015, raising minimum wages from the statewide $9.47 to $10 or $11, depending upon business size, presence of tipped workers and employer provision of health insurance. The second phase began on January 1, 2016, further raising the minimum to four different levels, ranging from $10.50 to $13, again depending upon employer size, presence of tipped workers and provision of health insurance. The tip credit provision was introduced into a previously no tip credit environment. Any assessment of the impact of Seattle's minimum wage policy is complicated by this complex array of minimum wage rates. This complexity continues in 2017, when the range of the four Seattle minimum wages widened, from $11 to $15, and the state minimum wage increased to $11.
We analyze county and city-level data for 2009 to 2016 on all employees counted in the Quarterly Census of Employment and Wages and use the "synthetic control" method to rigorously identify the causal effects of Seattle's minimum wage policy upon wages and employment. Our study focuses on the Seattle food services industry. This industry is an intense user of minimum wage workers; if wage and employment effects occur, they should be detectable in this industry. We use county level data from other areas in Washington State and the rest of the U.S. to construct a synthetic control group that matches Seattle for a nearly six year period before the minimum wage policy was implemented. Our methods ensure that our synthetic control group meets accepted statistical standards, including not being contaminated by wage spillovers from Seattle. We scale our outcome measures so that they apply to all sectors, not just food services.
Our results show that wages in food services did increase-indicating the policy achieved its goal-and our estimates of the wage increases are in line with the lion's share of results in previous credible minimum wage studies. Wages increased much less among full-service restaurants, indicating that employers made use of the tip credit component of the law. Employment in food service, however, was not affected, even among the limited-service restaurants, many of them franchisees, for whom the policy was most binding. These findings extend our knowledge of minimum wage effects to policies as high as $13.We need living income compatibleanne -> Sandwichman ... , June 28, 2017 at 05:44 AM
wage rates and hours
The shorter hours program H
of course needs to tie into
the living wage calculation W
H x W
Start with living income flow rate of say 30 k per year
At 1500 hours per year
that requires a wage rate
Of 20 dollars per hour
Equally a 15 dollar wage rate requires 2000 hours per year
So what's your living income for a year ?
Is it 25 k or 20 k or ....
https://www.nytimes.com/2017/06/26/business/economy/seattle-minimum-wage.htmlPaine -> anne... , June 28, 2017 at 06:26 AM
June 26, 2017
How a Rising Minimum Wage Affects Jobs in Seattle
By NOAM SCHEIBER
Three years ago, Seattle became one of the first jurisdictions in the nation to embrace a $15-an-hour minimum wage, to be phased in over several years.
Over the past week, two studies have purported to demonstrate the effects of the first stages of that increase - but with starkly diverging results.
The first study, by a team of researchers at the University of California, Berkeley, supports the conclusion of numerous studies before it, that increasing the minimum wage up to a level that is about half or less of an area's typical wage leads to at most a small reduction in employment.
That roughly describes Seattle, which first increased its minimum wage to $11 an hour from $9.47 for large businesses in April 2015, then to $13 an hour for many of those businesses in January 2016. (Small businesses, and large ones that provide health insurance for workers, had lower increases.)
The Berkeley study focused on the restaurant industry because of the high proportion of restaurant workers who are paid the minimum wage. It found that for every 10 percent that the minimum wage rose, wages in the industry rose nearly 1 percent, and that there was no discernible effect on employment.
By contrast, the second study, which a group of researchers at the University of Washington released on Monday, suggests that the minimum wage has had a far more negative effect on employment than even skeptics of minimum-wage increases typically find. (Neither study has been formally peer-reviewed.)
The University of Washington authors held one significant advantage over other economists studying the issue: detailed data on hours and earnings for workers affected by the increase.
This data allowed the researchers to measure the effects of the minimum wage on workers in all industries rather than relying on restaurants as a stand-in, a common technique. It also allowed them to measure a change in hours worked, a potentially more complete indication of the effect of a minimum-wage increase than the employee head count that many studies use....YesPaine -> Paine ... , June 28, 2017 at 06:28 AM
Plenty of room to " find "
Pro and con " results "
I like the shift from jobs to hours
Raising he wage rate can be easily off set by lowering hours
Of course that suggests a lift in labor productivity
And Or reduction in service or product either quantity or qualityReal Labor Productivity increases can be the result of increased work intensity
Shrewd redesign of tasks
Use of additional or better technical systems
Jun 28, 2017 | economistsview.typepad.com
RGC -> pgl... , June 28, 2017 at 08:50 AM[Taxes may go up but lower costs than private insurance could give many people a net savings.]pgl -> RGC... , June 28, 2017 at 09:59 AM
We will describe the single payer system in Canada, because Canada is physically close and close in values to those of U.S. citizens.
Canada provides free medical services through private entities. The government sets federal standards to assure quality of care. The individual's health remains confidential between a person and his or her physician. In each Canadian province, each doctor submits the insurance claim against the provincial insurer. The person who gets healthcare does not get involved in billing and reclaim.
The Canadian government keeps advertising at a minimum. Costs are paid through funding from income taxes. There are no deductibles on basic health care and co-pays are kept extremely low. Provinces issue a health card to each individual who enrolls and everyone receives the same level of care. There is no variety of plans because all essential basic care is covered, including maternity and infertility problems. Dental and vision care may or may not be covered depending on the Province. Some provinces provide private supplemental plans for patients who desire private rooms if hospitalized.
Cosmetic surgery and some elective surgery are generally not covered. These can be paid out-of-pocket or through private insurers. One's health coverage is not affected by loss or change of jobs, as long as premiums are up to date. There are no lifetime limits or exclusions for pre-existing conditions.
Canadians chose their family physician (called a general practitioner or GP). If the person wants to see a specialist, the GP will make a referral. The median wait time to see a specialist physician is a month. The median wait time for diagnostic services such as MRI and CAT scans is two weeks. The median wait time for surgery is four weeks.
Pharmaceutical medications are covered by public funds for the elderly or indigent, or through employment-based private insurance. The Canadian government negotiates drug prices with suppliers to control costs.
Physician incomes in Canada rose initially after the single payer system was implemented. A reduction in physician salaries followed, many fearing this would be a long-term result of government-run healthcare. However, by the beginning of the 21st century, medical professionals were again among Canada's top earners.
The main thing to notice is that Canada's healthcare cost to its GDP is 11 percent whereas the U.S. cost is 17 percent of the GDP.
http://www.huffingtonpost.com/entry/its-time-for-a-single-payer-healthcare-system_us_58d6470de4b0f633072b37f8Canada gets a lot of things right that we totally mess up.
Apr 01, 2016 | economistsview.typepad.com
David Glasner (I cut quite a bit -- the original is more than twice as long):What's so Great about Free Trade? : Free trade is about as close to a sacred tenet as can be found in classical and neoclassical economic theory. ... Despite the love and devotion that the doctrine of free trade inspires in economists, the doctrine ... has never been popular among the masses. ...Barkley Rosser April 01, 2016 at 12:32 AM
The key to understanding that disconnect is, I suggest, the way in which economists have been trained to think about individual and social welfare, which, it seems to me, is totally different from how most people think about their well-being. In the standard utility-maximization framework, individual well-being is a monotonically increasing function of individual consumption, leisure being one of the "goods" being consumed, so that reductions in hours worked is, when consumption of everything else is held constant, welfare-increasing. Even at a superficial level, this seems totally wrong. ...
What people do is a far more important determinant of their overall estimation of how well-off they are than what they consume. When you meet someone, you are likely, if you are at all interested in finding out about the person, to ask him or her about what he or she does, not about what he or she consumes. Most of the waking hours of an adult person are spent in work-related activities. ... It seems to me that what matters to most people is the nature of their relationships with their family and friends and the people they work with, and whether they get satisfaction from their jobs or from a sense that they are accomplishing or are on their way to accomplish some important life goals. ...
Moreover, insofar as people depend on being employed in order to finance their routine consumption purchases..., the unplanned loss of their current job would be a personal disaster, which means that being employed is the dominant – the overwhelming – determinant of their well-being. Ordinary people seem to understand how closely their well-being is tied to the stability of their employment, which is why people are so viscerally opposed to policies that, they fear, could increase the likelihood of losing their jobs.
To think that an increased chance of losing one's job in exchange for a slight gain in purchasing power owing to the availability of low-cost imports is an acceptable trade-off for most workers does not seem at all realistic. Questioning the acceptability of this trade-off doesn't mean that ... in principle, the gains from free trade are[n't] large enough to provide monetary compensation to workers who lose their jobs, but I do question whether such compensation is possible in practice or that the compensation would be adequate for the loss of psychic well-being associated with losing one's job, even if money income is maintained. ...
The psychic effects of losing a job (an increase in leisure!) are ignored by the standard calculations of welfare effects in which well-being is identified with, and measured by, consumption. And these losses are compounded and amplified when they are concentrated in specific communities and regions...
The goal of this post is not to make an argument for protectionist policies, let alone for any of the candidates arguing for protectionist policies. The aim is to show how inadequate the standard arguments for free trade are in responding to the concerns of the people who feel that they have been hurt by free-trade policies or feel that the jobs that they have now are vulnerable to continued free trade and ever-increasing globalization. I don't say that responses can't be made, just that they haven't been made.
The larger philosophical or methodological point is that ... economic theory can tell us that an excise tax on sugar tends to cause an increase in the price, and a reduction in output, of sugar. But the idea that we can reliably make welfare comparisons between alternative states of the world when welfare is assumed to be a function of consumption, and that nothing else matters, is simply preposterous. And it's about time that economists enlarged their notions of what constitutes well-being if they want to make useful recommendations about the welfare implications of public policy, especially trade policy.RC AKA Darryl, Ron -> Barkley Rosser ...
The happiness literature on the impact of involuntary unemployment on happiness is quite large, with people like David Blanchflower having played important roles. An offhand summary is that becoming involuntarily unemployed is indeed one of the events that is most devastating to the happiness of most people, with only a few events worse, including having one's spouse die or being thrown in jail.DrDick -> RC AKA Darryl, Ron... Reply Friday, April 01, 2016 at 06:58 AM
It is not becoming involuntarily unemployed that is devastating. It is the loss of income security that sucks. I was laid off 6/16/2015, but I was 66 years and 2 months old having earned 37 years of service credit in our defined benefits pension plan and then granted an additional 6 years pension service credit by virtue of taking my severance benefits in the form of enhanced retirement.
I had wanted to work six more years so I could take survivor benefit and still have a sufficient retirement income, but the severance package allowed me that freedom instead.
With firms no longer offering defined benefits pension plans then we need to expand social security into a full income pension plan. We need to increase unemployment benefits as well. Once we have paid for that then the plutocrats will find that they are better off paying US workers to make stuff since all their global price arbitrage profits have been clawed back.PPaine -> DrDick... April 01, 2016 at 07:10 AM
I think this is an important factor. It is certainly the case that a certain level of consumption increases happiness, but beyond a fairly moderate level, I do not think it actually adds much. Another important factor is having something meaningful to do with your time. For most people, that is work. Boredom is a serious problem among the retired.
We have more then just skill crushing, job experience crushing. Impacts of domestic production erasing imports. We have the implied competition on wages. Of import threats
Wage stag --
JohnH -> PPaine ... April 01, 2016 at 07:31 AMRC AKA Darryl, Ron -> DrDick... April 01, 2016 at 09:58 AM
Economists largely ignore distribution of benefits, focusing on efficiency and the 'total good.' How that total good is divvied up is largely irrelevant to them, unless the populace gets testy.
In fact, most people would be better off if the economy were slightly smaller but distributed much more evenly. Economists just can't seem to wrap their heads around that concept.reason April 01, 2016 at 12:45 AM
"I think this is an important factor."
[Not sure which this that you are agreeing with. So, let's say that income security means a roof over are heads and food to eat for the whole family. Then there is this boredom thingy. With a little acreage and a sound mind and body then staying occupied, productive (in some manner of speaking - a rose is a rose is a rose), and happy is a piece of cake. A tenement room with nothing but a TV would be death sentence for me. If not for money then I would never have needed to work for someone else. I see good honest work to do everywhere I look.]
He came close but he missed the major point. SECURITY.
What do most people see as their life goal? To raise a family. How long does it take? Decades. Flexibility isn't a boon - it is a disaster for most people.
If you only look at a static picture of the world (which is the traditional view of economists) how can you possibility see this?
ilsm -> reason... April 01, 2016 at 04:35 AMRC AKA Darryl, Ron -> reason... April 01, 2016 at 05:24 AM
Economics is about "distribution of scarce resources......." if I recall ECON 101.
That phrase is as forgotten and ignored as the thing in the Declaration of Independence about "all men created equal"!
Unless the measure of "good" wrt distribution is the hoard of the richest.RC AKA Darryl, Ron -> reason... April 01, 2016 at 06:10 AM
"He came close but he missed the major point. SECURITY..."
[Too bad. As I was reading this I was liking it so much that it had already elevated my former opinion of David Glasner, technically elegant, all the way up to topically relevant and possibly even socially astute, but from what you say then I must put a hold on that socially astute. I guess I had better read the entire article before I begin to comment further.]Benedict@Large -> reason... April 01, 2016 at 06:18 AM
You are correct. Glasner missed the point on security, so he also missed the point that if income is maintained then that would cover the lion's share of well being. Glasner is correct that money is not everything, just as consumption is not everything, but that really does come down to just how much money that we are talking about. I worked a long time contributing into a traditional pension plan. I took great pride in my work, but I have not missed my job or felt inadequate because of the lack of that purpose for a minute since I was laid off on 6/16/2015. That's because between my social security and pension incomes then I can still make my mortgage payments and all my other bills and due to my reduced expenses on payroll taxes, clothes, and gas have more money left over for landscaping and other home projects than I did when I was working. If I was eating cat food or living under a bridge then I would be feeling much worse about having been laid off.RC AKA Darryl, Ron -> Benedict@Large ... April 01, 2016 at 06:47 AM
There is no such thing as free trade. At best, there are treaties which successively approximate free trade. The problem comes in with who negotiates these agreements, the agreements largely addressing the concerns of those selected to do so, while ignoring the concerns of those not selected to do so. Which is the entire problem. Capital is selected; labor is not. (Neither much is environmental.)
So who ends up liking these things? Capital. Who ends up not liking them? Labor and environment. Duh? Is this really that hard to figure out?
"There is no such thing as free trade...."PPaine -> reason... April 01, 2016 at 07:14 AM
[Sure there is. Anne complains about this as well. But a large part of maintaining plutocracy within the framework of a democratically electoral republic is the copious use of misleading euphemisms. We all know what they really mean, or at least all of us here reading and commenting at EV know what they mean. My guess is that unemployed workers in the rustbelt know what they mean as well.
Republicans talk about being free all of the time, but what they really are is just cheap. There is nothing free in life. Most people know this intuitively. There are choices and consequences. One consequence of the overuse of "free trade" is the emergence of fair trade. As far as I can tell the rebranding will hardly put a dent in the arbitrage profits. ]jonny bakho April 01, 2016 at 04:09 AM
Might I submit this word
A decent measure of Control over ones fate
The job markets must always offer everyone ....everyone an opportunity to prosper
Ours is a job based culture as the blog post asserts so clearly
To control ones fate and ones love ones fate
Job opportunities and options
must. always be out there cajoling you to " join us "RueTheDay April 01, 2016 at 06:11 AM
The United States benefits and historically has benefitted by being one large trading block. Increases in wealth are linked to improvements in transportation even today.
One stumbling block in international trade is the restriction on movement of labor. This is a huge problem for the EU. Another problem is distribution of the profits from trade. How much should be captured by private interests and how much should go to the public good. Should some profits from trade be returned from one country to another? This is often done through severance taxes or export fees.
"Free trade" (whatever that is) is not necessarily fair trade. Free trade is a slogan special interest use to protect their capture of trade profits. Fair trade would be the attempt to manage trade such that the maximum number of winners is produced.RC AKA Darryl, Ron -> RueTheDay ... April 01, 2016 at 06:22 AM
It seems to me that a couple of obvious points are being missed.
1) The "gains from free trade" argument is simply that under conditions of trade, more "stuff" will be produced than under conditions of autarky, so theoretically there will be more available for everyone. That says nothing about how those gains are distributed, i.e., there will be individual winners and losers. In practice, those gains never seem to actually get redistributed so it's impossible to say everyone is made better off.
2) What is the root cause of comparative advantage? The textbooks tell us - differences in initial factor endowments, technology, and tastes. What does that mean in a world where a company in a developed company can pick up its capital (and implicitly, technology) and move it to a lesser developed country with cheaper labor, because capital is far more mobile than labor, in order to produce goods to supply its home market (where tastes differ)?Fred C. Dobbs April 01, 2016 at 06:35 AM
Glasner did not really miss your point # 1, but he muddled the message a bit over the benefits of redistribution. Almost everyone, but especially those trained in economics, seems to miss your point #2. The most basic premise of comparative advantage has long been broken by technology, but the fiction of that old saw serves the price arbitrage motives of capital so well that it has been preserved in amber like the fossilized bug it is.
anne -> Fred C. Dobbs... April 01, 2016 at 07:12 AM
The Democrats "Free Trade" Divide
Mark Engler - April 23, 2008
"Free trade" has produced some of the most contentious political debates of our times. In a famous April 2000 article in the New Republic (*), economist Joseph Stiglitz argued, "Economic policy is today perhaps the most important part of America's interaction with the rest of the world. And yet the culture of international economic policy in the world's most powerful democracy is not democratic." During the Bush years, economic policy received far less attention in political discussion than before; the use of military force took center stage. However, the trade and development debate went on, and it continues to affect fundamental questions of global poverty, inequality, and opportunity. Under a new Democratic administration-or under a Republican administration that demotes the neocons in favor of the more traditional, realist foreign policy establishment-it is likely that economic policy will again become the most important part of America's interaction with the world. And it is likely that it will remain profoundly undemocratic.
The injustices of neoliberal trade policy and the hypocrisy of U.S. stances in international negotiations have produced an upheaval in multilateral institutions like the WTO, and this has helped to transform the debate about the global economy. But trade is also an important domestic issue. Today, trade policy plays an important role in the battle for the soul of the Democratic Party.
One of the major accomplishments of the Clinton administration was to move to the fore of the Party a faction led by the centrist, corporate-friendly Democratic Leadership Council. Working with pro-"free trade" Republicans, Clinton and the DLC made passing the North American Free Trade agreement (NAFTA) in 1993 and approving U.S. entry into the World Trade Organization (WTO) in 1994 into bipartisan crusades. The coalition in favor of corporate globalization was always tenuous, however. In recent years, especially as the Bush administration implemented an increasing belligerent foreign policy, the "free trade" coalition has frayed. ...
April 17, 2010
What I Learned at the World Economic Crisis
By Joseph Stiglitz
Next week's meeting of the International Monetary Fund will bring to Washington, D.C., many of the same demonstrators who trashed the World Trade Organization in Seattle last fall. They'll say the IMF is arrogant. They'll say the IMF doesn't really listen to the developing countries it is supposed to help. They'll say the IMF is secretive and insulated from democratic accountability. They'll say the IMF's economic "remedies" often make things worse--turning slowdowns into recessions and recessions into depressions.
And they'll have a point. I was chief economist at the World Bank from 1996 until last November, during the gravest global economic crisis in a half-century. I saw how the IMF, in tandem with the U.S. Treasury Department, responded. And I was appalled.
The global economic crisis began in Thailand, on July 2, 1997. The countries of East Asia were coming off a miraculous three decades: incomes had soared, health had improved, poverty had fallen dramatically. Not only was literacy now universal, but, on international science and math tests, many of these countries outperformed the United States. Some had not suffered a single year of recession in 30 years.
But the seeds of calamity had already been planted. In the early '90s, East Asian countries had liberalized their financial and capital markets--not because they needed to attract more funds (savings rates were already 30 percent or more) but because of international pressure, including some from the U.S. Treasury Department. These changes provoked a flood of short-term capital--that is, the kind of capital that looks for the highest return in the next day, week, or month, as opposed to long-term investment in things like factories. In Thailand, this short-term capital helped fuel an unsustainable real estate boom. And, as people around the world (including Americans) have painfully learned, every real estate bubble eventually bursts, often with disastrous consequences. Just as suddenly as capital flowed in, it flowed out. And, when everybody tries to pull their money out at the same time, it causes an economic problem. A big economic problem.
The last set of financial crises had occurred in Latin America in the 1980s, when bloated public deficits and loose monetary policies led to runaway inflation. There, the IMF had correctly imposed fiscal austerity (balanced budgets) and tighter monetary policies, demanding that governments pursue those policies as a precondition for receiving aid. So, in 1997 the IMF imposed the same demands on Thailand. Austerity, the fund's leaders said, would restore confidence in the Thai economy. As the crisis spread to other East Asian nations--and even as evidence of the policy's failure mounted--the IMF barely blinked, delivering the same medicine to each ailing nation that showed up on its doorstep.
I thought this was a mistake....
Getting fired from your job is one of the most stressful events one can experience in life.
Two psychiatrists once conducted a study to attempt to discover how stressful various events were. They did a massive survey of 5000 people.
Losing your job was calculated to be a 47/100. To compare, having your home foreclosed on was a 30 and the death of a close friend was a 37. The only things more stressful than losing your job were things regarding beginning or ending a marriage, and going to prison.
It's understandable why most people are very, very risk averse when it comes to job loss.
See: Holmes TH, Rahe RH (1967). "The Social Readjustment Rating Scale". J Psychosom Res 11 (2): 213–8.
Mar 24, 2017 | marknesop.wordpress.com
robert , February 26, 2014 at 11:44 am
Regarding Kirill's post about that shibboleth of contemporary economics, free trade.
Pick up an introductory textbook of economics and your chances of finding an objective assessment of a system of this kind are very low indeed. Instead, what you'll find between the covers is a ringing endorsement of free trade, usually in the most propagandistic sort of language. Most likely it will rehash the arguments originally made by British economist David Ricardo, in the early 19th century, to prove that free trade inevitably encourages every nation to develop whatever industries are best suited to its circumstances, and so produces more prosperity for everybody. Those arguments will usually be spiced up with whatever more recent additions appeal to the theoretical tastes of the textbook's author or authors, and will plop the whole discussion into a historical narrative that insists that once upon a time, there were silly people who didn't like free trade, but now we all know better.
What inevitably gets omitted from the textbook is any discussion, based in actual historical examples, of the way that free trade works out in practice That would be awkward, because in the real world, throughout history, free trade pretty consistently hasn't done what Ricardo's rhetoric and today's economics textbooks claim it will do. Instead, it amplifies the advantages of wealthy nations and the disadvantages of poorer ones, concentrating capital and income in the hands of those who already have plenty of both while squeezing out potential rivals and forcing down wages across the board. This is why every nation in history that's ever developed a significant industrial sector to its economy has done so by rejecting the ideology of free trade, and building its industries behind a protective wall of tariffs, trade barriers, and capital controls, while those nations that have listened to the advice of the tame economists of the British and American empires have one and all remained mired in poverty and dependence as long as they did so.
There's a rich irony here, because not much more than a century ago, a healthy skepticism toward the claims of free trade ideology used to be standard in the United States. At that time, Britain filled the role in the world system that the United States fills today, complete with the global empire, the gargantuan military with annual budget to match, and the endless drumbeat of brushfire wars across what would one day be called the Third World, and British economists were accordingly the world's loudest proponents of free trade, while the United States filled the role of rising industrial power that China fills today, complete with sky-high trade barriers that protected its growing industries, not to mention a distinctly cavalier attitude toward intellectual property laws.
One result of that latter detail is that pirate editions of the Encyclopedia Britannica were produced and sold by a number of American firms all through the 19th century. Most of these editions differed from their British originals in an interesting way, though. The entry for "Free Trade" in the original editions repeated standard British free-trade economic theory, repeating Ricardo's arguments and dismissing criticisms of free trade out of hand; the American editors by and large took the trouble to replace these with entries critiquing free trade ideology in much the same terms I've used in this post. The replacement of pro- with anti-free trade arguments in these pirate editions, interestingly enough, attracted far more denunciation in the British press than the piracy itself got, which shows that the real issues were tolerably well understood at the time.
When it comes to free trade and its alternatives, that level of understanding is nowhere near so common these days, at least in Britain -I've long suspected that businessmen and officials in Beijing have a very precise understanding of what free trade actually means, though it would hardly be to their advantage just now to talk about that with any degree of candor. In the West even those who speak most enthusiastically about relocalization and the end of corporate globalism apparently haven't noticed how effectively tariffs, trade barriers, and capital controls foster domestic industries and rebuild national economies-or perhaps it's just that too many of them aren't willing to consider paying the kind of prices for their iPods and Xboxes that would follow the enactment of a reasonable tariff, much less the prices that would be required if we had the kind of trade barriers that built the American economy and could build it again, and bluecollar First World workers were paid First World wages to make them.
Free trade is simply one of the mechanisms of empire in the age of industrialism, one part of the wealth pump that concentrated the wealth of the globe in Britain during the years of its imperial dominion and does the same thing for the benefit of the United States today. Choose any other mechanism of empire, from the web of military treaties that lock allies and subject nations into a condition of dependence on the imperial center, through the immense benefits that accrue to whatever nation issues the currency in which international trade is carried out, to the way that the charitable organizations of the imperial center-missionary churches in Victoria's time, for example, or humanitarian NGOs in ours-further the agenda of empire with such weary predictability: in every case, you'll find a haze of doubletalk surrounding a straightforward exercise of imperial domination. It requires a keen eye to look past the rhetoric and pay attention to the direction the benefits flow.
Follow the flow of wealth and you understand empire. That's true in a general and a more specific sense, and both of these have their uses. In the general sense, paying attention to shifts in wealth between the imperial core and the nations subject to it is an essential antidote to the popular sort of nonsense-popular among tame intellectuals such as Thomas Friedman, at least, and their audiences in the imperial core-that imagines empire as a sort of social welfare program for conquered nations. Whether it's some old pukka sahib talking about how the British Empire brought railroads and good government to India, or his neoconservative equivalent talking about how the United States ought to export the blessings of democracy and the free market to the Middle East or the former Soviet Union it's codswallop, and the easiest way to see that it's codswallop is to notice that the price paid for whatever exports are under discussion normally amounts to the systematic impoverishment of the subject nation.
marknesop , February 26, 2014 at 5:44 pm
Free trade is only fair if all nations in the agreement start from the same point. If you choose not to invest in development, that's your own lookout, but don't complain if you end up under the de facto control of the one who did. But when a highly-developed nation espouses a free trade agreement with a nation that is just starting, it should be fairly easy to forecast who will come out ahead on the deal.
Did you uhhh write that yourself? Because it's pretty awesome.
astabada , February 27, 2014 at 12:46 am
I agree with Mark, your comment is great. Especially when you mention that these matters were much more clear to the general public a century ago, than they are now.
This is what List wrote (National System):
It is a very common clever device that when anyone has attained the summit of greatness, he kicks away the ladder by which he has climbed up, in order to deprive others of the means of climbing up after him. In this lies the secret of the cosmopolitical doctrine of Adam Smith, and of the cosmopolitical tendencies of his great contemporary William Pitt, and of all his successors in the British Government administrations. Any nation which by means of protective duties and restrictions on navigation has raised her manufacturing power and her navigation to such a degree of development that no other nation can sustain free competition with her, can do nothing wiser than to throw away these ladders of her greatness, to preach to other nations the benefits of free trade, and to declare in penitent tones that she has hitherto wandered in the paths of error, and has now for the first time succeeded in discovering the truth.
Jun 28, 2017 | www.nakedcapitalism.comPosted on October 29, 2015 by Lambert Strether Lambert here: As we dig deeper into the health care system, concepts like those expressed in this article will become increasingly useful. The patterns identified by Poses here remind me of the university, which is also being eaten alive by a bloated and parasitical administrative layer.
By Roy Poses , MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Cross posted from the Health Care Renewal website
I just found an important article that in the June, 2015 issue of the Medical Journal of Australia(1) that sums up many of ways the leadership of medical (and most other organizations) have gone wrong. It provides a clear, organized summary of "managerialism" in health care, which roughly rolls up what we have called generic management , the manager's coup d'etat , and aspects of mission-hostile management into a very troubling but coherent package. I will summarize the main points, giving relevant quotes.
Recent Developments in Business Management Dogma Have Gravely Affected Health Care
Many health practitioners will consider the theory of business management to be of obscure relevance to clinical practice. They might therefore be surprised to learn that the changes that have occurred in this discipline over recent years have driven a fundamental revolution that has already transformed their daily lives, arguably in perverse and harmful ways.
These Changes Have Been Largely Anechoic
these changes have by and large been introduced insidiously, with little public debate, under the guise of unquestioned 'best practice'.
See our previous discussions of the anechoic effect , how discussion of facts and ideas that threaten what we can now call the managerialist power structure of health care are not considered appropriate for polite conversation, or public discussion.
Businesses are Now Run by Professional Managers, Not Owners
The traditional control by business owners in Europe and North America gave way during the 19th century to corporate control of companies. This led to the emergence of a new group of professionals whose job it was to perform the administrative tasks of production. Consequently, management became identified as both a skill and a profession in its own right, requiring specific training and based on numerous emergent theories of practice.
These Changes Were Enabled by Neoliberalism (or Market Fundamentalism , or Economism )
Among these many vicissitudes, a decisive new departure occurred with the advent of what became known as neoliberalism in the 1980s (sometimes called Thatcherism because of its enthusiastic adoption by the Conservative government of Margaret Thatcher in the United Kingdom). A reaction against Keynesian economic policy and the welfare state, this harshly reinstated the regulatory role of the market in all aspects of economic activity and led directly to the generalisation of the standards and practices of management from the private to the public sectors. The radical cost cutting and privatisation of social services that followed the adoption of neoliberal principles became a public policy strategy rigorously embraced by governments around the world, including successive Liberal and Labor governments in Australia.
Note that this is a global problem, at least of English speaking developed countries. The article focuses on Australia, but we have certainly seen parallels in the US and the UK. Further, note that we have discussed this concept, also termed market fundamentalism or economism.
Managerialism Provides a One-Size Fits All Approach to the Management of All Organizations, in Which Money Becomes the Central Consideration
The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market. Both ideas have far-reaching implications. The claim that every organisation - whether it is a mining company, a hospital, a school, a professional association or a charity - must be structured according to a single model, conforming to a single set of legislative requirements, not so long ago would have seemed bizarre, but is now largely taken for granted. The principle of the market has become the solitary, or dominant, criterion for decision making, and other criteria, such as loyalty, trust, care and a commitment to critical reflection, have become displaced and devalued. Indeed, the latter are viewed as quaint anachronisms with less importance and meaning than formal procedures or standards that can be readily linked to key performance indicators, budget end points, efficiency markers and externally imposed targets.
Originally conceived as a strategy to manage large and increasingly complex organisations, in the contemporary world, no aspect of social life is now considered to be exempt from managerialist principles and practices. Policies and practices have become highly standardised, emphasising market-style incentives, devolved budgets and outsourcing, replacement of centralised budgeting with departmentalised user-pays systems, casualisation of labour, and an increasingly hierarchical approach to every aspect of institutional and social organisation.
We have frequently discussed how professional generic managers have taken over health care (sometimes referred to as the manager's coup d'etat .) We have noted that generic managers often seem ill-informed about if not overtly hostile to the values of health care professionals and the missions of health care organizations.
Very Adverse Effects Result in Health Care and Academics
In the workplace, the authority of management is intensified, and behaviour that previously might have been regarded as bullying becomes accepted good practice. The autonomous discretion of the professional is undermined, and cuts in staff and increases in caseload occur without democratic consultation of staff. Loyal long-term staff are dismissed and often humiliated, and rigorous monitoring of the performance of the remaining employees focuses on narrowly defined criteria relating to attainment of financial targets, efficiency and effectiveness.
The principles of managerialist theory have been applied equally to the public and the private sectors. In the health sector, it has precipitated a shift in power from clinicians to managers and a change in emphasis from a commitment to patient care to a primary concern with budgetary efficiency. Increasingly, public hospital funding is tied to reductions in bed stays and other formal criteria, and all decision making is subject to review relating to time and money. Older and chronically ill people become seen not as subjects of compassion, care and respect but as potential financial burdens. This does not mean that the system is not still staffed by skilled clinicians committed to caring for the sick and needy; it is rather that it has become increasingly harder for these professionals to do their jobs as they would like.
In the university sector, the story is much the same; all activities are assessed in relation to the prosperity of the institution as a business enterprise rather than as a social one. Education is seen as a commodity like any other, with priority given to vocational skills rather than intellectual values. Teaching and research become subordinated to administration, top-down management and obsessively applied management procedures. Researchers are required to generate external funding to support their salaries, to focus on short-term problems, with the principal purpose being to enhance the university's research ranking. The focus shifts from knowledge to grant income, from ideas to publications, from speculation to conformity, from collegiality to property, and from academic freedom to control. Rigid hierarchies are created from heads of school to deans of faculties and so on. Academic staff - once encouraged to engage in public life - are forbidden to speak publicly without permission from their managers.
Again, we have discussed these changes largely in the US context. We have noted how modern health care leadership has threatened primary care . We have noted how vulnerable patients become moreso in the current system, e.g., see our discussions of for-profit hospices . We have discussed attacks on academic freedom and free speech , the plight of whistle-blowers , education that really is deceptive marketing, academic institutions mired in individual and institutional conflicts of interest , and the suppression and manipulation of clinical research . We have noted how health care leaders have become increasingly richly rewarded , apparently despite, or perhaps because of the degradation of the health care mission over which they have presided.
The Case Study
The article provided a case study of the apparent demise of the Royal Australasian College of Physicians as a physician led organization, leading to alleged emphasis on "extreme secrecy and 'commercial in confidence," growth of conflicts of interest, risk aversion on controversial issues. When members of the organization called for a vote to increase transparency and accountability, the hired management apparently sued their own members.
Whether the damage done to the larger institutions - the public hospitals and the universities - can be reversed, or even stemmed, is a bigger question still. The most that can be said is that even if the present, damaging phase of managerial theory and practice eventually passes, its destructive effects will linger on for many years to come.
I now believe that the most important cause of US health care dysfunction, and likely of global health care dysfunction, are the problems in leadership and governance we have often summarized (leadership that is ill-informed, ignorant or hostile to the health care mission and professional values, incompetent, self-interested, conflicted or outright criminal or corrupt , and governance that lacks accountability, transparency, honesty, and ethics.) In turn, it appears that these problems have been generated by the twin plagues of managerialism ( generic management , the manager's coup d'etat ) and neoliberalism (market fundamentalism, economism) as applied to health care. It may be the many of the larger problems in US and global society also can be traced back to these sources.
We now see our problems in health care as part of a much larger whole, which partly explains why efforts to address specific health care problems country by country have been near futile. We are up against something much larger than what we thought when we started Health Care Renewal in 2005. But at least we should now be able join our efforts to those in other countries and in other sectors.
1. Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM. The scourge of managerialism and the Royal Australasian College of Physicians. Med J Aust 2015; 202: 519- 521. Link here .
We have to leaven this dismal post with the 1980 live version of "Down Under" by Men at Work
JLCG , October 29, 2015 at 3:18 amEleanor , October 29, 2015 at 9:21 am
The managerial class is the universal class Hegel wrote about. It is the enemy of the productive classes, the agricultural and the industrial. Perhaps managers are like the eunuchs in former empires, grabbing power without production, always zealous that no idea will threaten their standing.Ed , October 29, 2015 at 10:05 am
It is unfair to eunuchs to compare them to managers. The man who led the great Ming dynasty naval journeys to SE Asia and Africa was a eunuch. The man credited with the invention of paper was a eunuch attached to the Han Dynasty court.
Narses, one of the emperor Justinian's great generals, was a eunuch.
He began his military career at the age of sixty and continued until he was murdered by the then-emperor at the age of ninety-five.
(This post is the result of very quick checking and memories of Robert Graves' wonderful book Count Belisarius. But I am mostly right.)jgordon , October 29, 2015 at 10:21 am
This comment completely misses the point of JLGC's excellent comment, and I refer you to the opening chapters of the Romance of the Three Kingdoms for remedial reading. Its become striking, at least to me, how much the developed western world is imitating the declines of the Chinese dynasties.Lexington , October 30, 2015 at 12:22 am
Pick any empire on the verge of collapse in history and you'll find terrifying parallels to America today. I think all failing empires/societies must follow roughly similar trajectories on their way to oblivion.S M Tenneshaw , October 29, 2015 at 4:45 am
One of those parallels is surely that authentic historical memory has been lost and replaced by the authority of works of fictionPIGL , October 29, 2015 at 4:48 am
Back in 1975 at my local technical college, I was fortunate enough to snag a part-time COBOL programming job at the school. My colleagues and I noticed that several managers above the department level had little to do but sit around in their offices. Periodically they would emerge to engage some unlucky soul in dumb conversation. One of my co-workers summed it up admirably: "The more they make, the less they do."
A couple years later while reading the Sunday paper job ads, I ran across this job title: Manager of Management Development. A sign of very bad things to come.dk , October 29, 2015 at 6:03 am
Let me say this about that:
John Raulston Saulnorm de plume , October 29, 2015 at 6:35 am
I have to wonder if it's a coincidence that both healthcare and education are given as especially notable victims of inappropriate/ineffective management
Because both healthcare and education are things that can best and primarily be done by and for oneself. And there is overlap here: organic chemistry is a special case of molecular physics. Regardless of how well instructors present it, there is a wealth of well understood information on molecular physics (with a lot of special examination of organic chemistry), and so far the bulk of that information remains easily available (although it's starting to disappear at an increasing and alarming rate). I know that many will say, "there's a lot more to it than that!", but this only indicates that they themselves have made no sustained effort to understand these matters. It's not rocket science (which is, indeed, quite demanding).
I think the authors may somewhat overlook collateral (and undoubtedly mutually synergistic with managerial phenomena) issues in the quality of teachers and doctors, which has also degraded in a similar way, possibly for similar reasons. Rote learning increasingly replaces comprehension in both fields. Inundated with unproven, and often unsound, commercial and theoretical dogma, rudimentary performance is still possible, but results are mediocre. Excellence in these fields requires patience, precision and and familiarity with underlying principles; "caring", bonhomie and rote knowledge are admirable, but not viable substitutes.
Does it even make sense to pay to undertake courses in order to get a certificate of achievement? From a commercial career perspective, certainly. But such a certificate is no sure guarantee of skill. "Qualified" personnel are not necessarily capable. In a time of ever increasingly complex systems and disciplines, capability is more needed than ever. The management sector is not the only area where performance, and fulfillment of actual (in contrast to nominal) responsibility, degrades.
For that matter, does it even make sense to have somebody undertake to diagnose your own health, without detailed information about your diet, your regular environment, your physical history, and any exceptions to these; information for which you yourself should be the best source? The consulting physician enters at an immediate disadvantage, facing a significant information deficit; it behooves individuals to become more proactive, especially when rudimentary diagnostic equipment (sphygmomanometers, simple blood test kits, etc) and reference information (anatomical references, drug chemistries and interactions, etc) are readily available. True, there are some thing's you can't do yourself, surgery is surely a valuable skill and worthy of respect, but it has significant limits as well (replacing a bad heart in an unhealthy body won't cure the body, etc).
Managerialism is a scourge, a calamity, a great threat; no argument from me. But it's not the only problem we face, as a culture, and as an economy, of human beings, in these fields and others. And the authors acknowledge this tangentially, but perhaps somewhat over-emphasize the impact if managerialism on the ongoing degradation of these and other fields, at least by omission of other evident and significant factors.norm de plume , October 29, 2015 at 6:09 am
'Does it even make sense to pay to undertake courses in order to get a certificate of achievement? From a commercial career perspective, certainly. But such a certificate is no sure guarantee of skill. "Qualified" personnel are not necessarily capable'
I think in time there will be a move away from official credentialing toward companies and organisations testing candidates – 'qualified' or not – themselves, with a professional or a dept (depending on the size of the concern) whose job it is to sort the wheat from the chaff. They would be in constant liaison with the various sections (and not just the heads) to keep abreast of what skills and knowledge are required in appointees, and test candidates accordingly. The net enables enterprising people too poor to afford expensive laurels to become as skilled and knowledgeable and probably more flexible than those born with 'advantages'. The twin drivers of this change will be, for the employers, the degradation of quality in 'qualified' applicants that you refer to, and, for the employees, the debt peonage involved in becoming 'qualified'
'For that matter, does it even make sense to have somebody undertake to diagnose your own health, without detailed information about your diet, your regular environment, your physical history, and any exceptions to these; information for which you yourself should be the best source?'
Not to mention your genetic heritage yes, human variation is the big blind spot not just in medicine but health generally. Almost nothing can be generalised, yet whole industries in health and wellbeing rely on generalisation.Ed Walker , October 29, 2015 at 6:11 am
'The claim that every organisation - whether it is a mining company, a hospital, a school, a professional association or a charity - must be structured according to a single model, conforming to a single set of legislative requirements, not so long ago would have seemed bizarre, but is now largely taken for granted. The principle of the market has become the solitary, or dominant, criterion for decision making, and other criteria, such as loyalty, trust, care and a commitment to critical reflection, have become displaced and devalued'
Put me in mind of this :
'And, so, finally the floodgates were open. Nowadays, every expected income stream is a fair candidate for capitalization. And since income streams are generated by social entities, processes, organizations and institutions, we end up with the 'capitalization of every thing'. Capitalists routinely discount human life, including its genetic code and social habits; they discount organized institutions from education and entertainment to religion and the law; they discount voluntary social networks; they discount urban violence, civil war and international conflict; they even discount the environmental future of humanity. Nothing seems to escape the piercing eye of capitalization: if it generates earning expectations it must have a price, and the algorithm that gives future earnings a price is capitalization'guest , October 29, 2015 at 1:50 pm
The number of healthcare administrators has soared. Here's a nice chart. The huge increase occurred in the early 90s.
http://www.google.fr/imgres?imgurl=http%3A%2F%2Fimage.slidesharecdn.com%2Fpnhplongsetweisbartversion-121221105916-phpapp01%2F95%2Fpnhp-long-setweisbartversion-52-638.jpg%253Fcb%253D1356087906&imgrefurl=http%3A%2F%2Fwww.slideshare.net%2FPNHP%2Fpnhp-long-setweisbartversion&h=479&w=638&tbnid=jrT8UrwLVoOZbM%3A&docid=udNUOrYIofj7GM&ei=NfAxVpKnNYLjUc_foeAP&tbm=isch&iact=rc&uact=3&dur=1757&page=1&start=0&ndsp=15&ved=0CCoQrQMwBGoVChMI0pXI_LfnyAIVgnEUCh3Pbwj8redleg , October 30, 2015 at 8:14 pm
Does anybody have an idea of what changed in 1990 to lead to such a sudden jump in the management overhead of health organizations? It must have been something crucial in the legal or economic environment of the sector.abynormal , October 29, 2015 at 6:24 am
It takes time to achieve a critical mass of MBA-wielding managers in order for group-think to establish itself.
I'm not going to exhaust myself fact-checking this data, so if anyone finds better please correct me and post it. Based on my own experience in a STEM field, this looks about right.Wade Riddick , October 29, 2015 at 9:32 am
Sadistic Managerial 'teams' have existed too long in too many areas. my mother recently received a notice on the door of her apartment, she's occupied for 5yrs. this letter was short and to the point 'if you do not pay .23 (cents) before the end of the business day, you will vacate your apartment'. mom, 81yro, called me in hysterics. i got to her apt. and immediately had to attend to her racing heart and hyperventilating. i read the letter slowly and see where mom missed the "you will voluntarily vacate your apartment".
after a few deep breaths, i hiked down to the den of smiling sadist offering coffee and cake. they introduced themselves as the 'new management', when i asked how many of the group of 5 it took to pull the 3yro .23 Cent delinquency i was assured by the head honcho, she was involved with the entire process. i explained my CPA sister and myself, Corporate Analyst (stretch), were off a few zero's and hadn't even bothered to account for the home office reconciliations.
back to 'healthcare/hospitals': "-owned hospitals. How many are there? Two hundred and thirty-eight of them in the whole country (out of more than five thousand)–somewhere between four and five percent of the total in the U.S. (numbers courtesy TA Henry from this excellent piece).
What are the issues?
Obamacare effectively bans doctors from owning hospitals in the U.S.
Those already in existence are grandfathered in under the law.
We know that doctor-owned hospitals have higher average costs–hence the rationale for banning them under a law with the intent of "bending the cost curve."
In the most recent Medicare data (December 2012 report on "value-based purchasing"), doctor-owned hospitals did well in terms of achieving quality milestones.
Really well. Physician-owned hospitals took nine out of the top ten spots in the country. And in spite of their low relative number, forty-eight out of the top one hundred.
What's the secret sauce? Here's a little tidbit on the #1 ranked hospital from another excellent piece on this issue:
The top one is Treasure Valley Hospital in Boise, Idaho, a 10-bed hospital that boasts a low patient-to-nurse ratio and extra attention, right down to thank-you notes sent to each discharged patient.
A 10-bed hospital? Thank you notes for each discharged patient? Sign me up to go there next time I need hospital services.
Who cares? Well, we all should. Why?
It boils down to incentives.
When doctors own the hospitals, they stand to directly share in profits. If you're a doctor-owner, and the hospital you both run and own is functioning at a high level, you think, "This is what America is all about. Free enterprise. Why shouldn't I make more money if my hospital runs well?"
As a taxpayer, do I want government incentives going to hospitals that are privately owned and known for cherry-picking insured patients?
Moreover, what does it say about public hospitals, or academic centers, that often see the sickest, poorest, most vulnerable patients? Yes, their quality is measurably lower, according to this data. But now, in spite of staying true to their core missions (serving the public) they're being further penalized.
Is this just another case of the rich simply getting richer?
Maybe Obamacare's got it wrong. Maybe we should build upon the model of doctor-ownership and turn over public hospitals to their workers. All of them. Let the nurses buy in. And the food handlers. And the "environmental services" folks (i.e. custodial crews). Let's really let the workers own the means of production. Then we can see where incentives get us." http://www.kevinmd.com/blog/2013/05/doctor-owned-hospitals-rich-richer.html
Sister Act: Gov. Perry's Little-Known Sister is a Lobbyist for Lucrative Doctor-Owned Hospitals; Milla Perry Jones is vice president of government relations at United Surgical Partners International, an Addison, Texas company that runs hospitals and surgery centers co-owned by doctors. Sister Jones works with trade groups to rebut claims that doctor-owned medical facilities inflate American medical bills. Both Governor Perry and his sister have championed doctor-owned facilities in Texas and Washington.
2006 federal report found that Medicare costs are 20 percent higher at doctor-owned orthopedic surgical hospitals than at competing community hospitals. These studies typically do not determine if the extra procedures are beneficial. The doctor-owned industry says it delivers superior care and points to contradictory research that does not associate doctor ownership with higher costs.
doctor-owned facilities are money machines. A 2009 study found that Texas' doctor-owned hospitals pumped $2.3 billion into the economy each year. The industry has had to use some of this money to fend off political meddling. Heavily favoring Republicans, Perry Jones' United Surgical PAC spent almost $250,000 on federal politicians from 2005 to 2010, according to the Center for Responsive Politics. The New York Times reported that Doctors Hospital at Renaissance donors gave congressional Democrats $1.3 million in that period, with then-House Speaker Nancy Pelosi visiting that hospital in 2007. Surpassing the powerful Texas Medical Association, the Doctors Hospital's Border Health PAC spent close to $4 million on Texas state elections from 2005 through 2010, becoming Texas' 13th largest PAC. Houston's doctor-owned North Cypress Medical Center pumped another $500,000 into Texas state races, ranking as Governor Perry's No. 5 donor in 2010.
In one of his last presidential ads, Rick Perry skewered Washington as a twisted place where, "You can't say that Congressmen becoming lobbyists is a form of political corruption." United Surgical, North Cypress and Doctors Hospital at Renaissance have paid federal lobbyists-including ex-Congressman Tom Loeffler-almost $3 million since 2005. Joined by two Perry Jones-affiliated trade groups, these same doctor-owned interests paid 24 Texas lobbyists-including U.S. Senator John Cornyn's daughter-up to $3.4 million in that period. These lobbyists do not include Milla Perry Jones, whose advocacy activities may not trigger Texas' registration requirements. (A Texas lobbyist generally must register if she receives more than $1,000 a quarter for direct communications with public officials). http://www.texasobserver.org/obamacare-jags-rick-perrys-lobbyist-sister/
can you imagine the independent sadist managing these hospitals?washunate , October 29, 2015 at 9:50 am
It's about confiscating public budgets – and, as such, it fits into the broader pattern of privatized jail and war. When you have for-profit war, you never get any peace; there's no money in it. For profit medicine is about sickcare and not healthcare. There's no profit in cure or prevention, only treatment.
Sickness creates natural captive markets for rent-seeking monopolies and cartels to exploit. Once you've got a disease there are only so many chemical options to treat it. Corporate America is often actively blocking cheap treatments to steer patients toward patented medicine. See my earlier comment about Pharmacy Benefit Managers. The recent epidemics of drug shortages aren't a coincidence; they are engineered. It's only happening with cheap, effective, often public domain chemicals (e.g., methotrexate, 2ml vials of MgSO4). This is by design. Rent-seekers confiscate public goods like public domain chemicals and provide inferior, expensive, patented substitutes.
Some of these are baffling if you don't understand the recent breakthroughs in biochemistry. When you take gel helminths (worms like whipworms) out of the body you get autoimmune diseases like m.s. and crohn's. This has been clear for about ten years but have you heard about that research from drug company-funded "patient" groups? When you feed people antibiotics that kill their gut flora and sell people food stripped of necessary fiber to nourish said bacteria, you get inflammation and insulin resistance – contributing to, sometimes outright causing, Alzheimer's, diabetes, autism, atherosclerosis, cancer and polycystic ovaries, among many diseases. What news company wants to tell the public the food companies in creating an addictive sugar-laden product by removing fiber is also creating disease? Big Tobacco wasn't an anomaly. It's a pattern of regular conduct across industries.
Patients are being tortured to death in this system.tyaz , October 29, 2015 at 11:19 am
Love the read. The quaint notion that the top employees in healthcare aren't in it for the money still lingers in some corners of our society.
One quibble with using this quote
A reaction against Keynesian economic policy and the welfare state, this harshly reinstated the regulatory role of the market in all aspects of economic activity and led directly to the generalisation of the standards and practices of management from the private to the public sectors.
It does not apply very well to the American context. Healthcare in the US context is all about the welfare state. US taxpayers give more money to both medical and non-medical managers/administrators/specialists/etc. than any other taxpayers in any other country on the planet. Markets play no role in the monstrosities that have become our hospital franchises, drug dealers, and equipment peddlers. These corporations (many of them 'nonprofit') are the anti-thesis of price takers in a competitive marketplace.JTMcPhee , October 30, 2015 at 8:47 am
Health care in the US is a mess in more than one dimension. Many aspects of managerialism are certainly a major problem contributing to increased costs and reduced quality. But there is an aspect of "overconsumption" of health services as well. I put it in quotes because the framing of "overconsumption" puts the blame on patients (as if they are "consumers"), rather than where I think the blame truly belongs - health care providers and management.
The existing system is largely setup to pay by the number of procedures (easy to measure with electronic health records) rather than the actual quality of care (not as easy to measure). Specialized doctors and managers have an incentive to push for unnecessary procedures and clinical visits, because it means they get paid more.
Perhaps the strongest evidence for doctors responding to these perverse incentives is the specializations that doctors choose. Primary care specializations like family medicine, general practice, and pediatrics are being decimated because these specializations are largely focused with preventative or long-term care. As a result, the pay is substantially lower than other specializations that perform many procedures. The evidence is that there is a critical shortage of doctors in these primary care fields, especially in rural areas of the country. Doctors flock to specializations that offer many procedures and consequently higher pay.Lambert Strether Post author , October 30, 2015 at 12:10 pm
Smaal example of "wallet biopsy" structuring of "health care:" You have a lab test or MRI or tissue biopsy done, under the "provider's" order. To be "given the results," even if normal or benign, you have to " be seen in clinic." A nurse or paraprofessional may actually "give you your results," but that will be billed as an office visit with the doctor. Don't want to pay f9r the wallet biopsy? Fine, the doc doesn't "give you yor results." And if you find a more compassionate, maybe even more skilled, provider? If there's a balance due on your account with the first, S/he effectively has a "chart lien," like a lawyer's "file lien," on your very own personal medical records.
And maybe that's "against the law," some places, but as always, where there's ño effective remedy (sue the doctor or the corporation? No effective remedy), there's no right
My wife went through this with a "Chr8stoan" DO primary-care dude who discovered Mammon was a more compelling god than YHWH, corporations and privatized his practice and got into peddling "procedures" like in-office ablation of throat tissue to "cure apnea and snoring," and Trusting Patient enrollment in drug trials for Bad Meds
Anyone who thinks clinicianscare all Albert Schweitzers needs to read "The House if God," learn the real rules of practice, understand what a "GOMER" is, and hope you won't get the "buff and turf" treatment. It's a hilarious book, but a check on the irrational exuberance that endows practitioners of the
calling artbusiness of medicine with universal expectations of virtue https://en.m.wikipedia.org/wiki/The_House_of_God
And Lambert, don't credit me with invention of that "wallet biopßy" phrase– it's a commonplace in the business of medicine.JTMcPhee , October 30, 2015 at 8:59 am
We need more such commonplaces! The language will be very revealing. Readers?TedWa , October 29, 2015 at 11:31 am
"Wallet biopsy:". http://csn.cancer.org/node/253191
Another less cynical take: http://www.urbandictionary.com/define.php?term=wallet%20biopsy
And closer to the real meaning: http://insureblog.blogspot.com/2009/01/wallet-biopsy.html?m=1
And more: http://www.healingwell.com/community/default.aspx?f=35&m=3346181
Why the vast majority of us humans will" never have nice things," like comity and empathy and simple decency, 'cuz more than enough of us are "all too human."TedWa , October 29, 2015 at 3:04 pm
Good read. Self-sustainability in all aspects of our lives is being usurped by un-free markets created by rent seekers or their lackeys. There is no longer a desire for America to be the best nation in the world because that would mean it's self-sustaining. And I'm not talking budgets. I'm talking people running things instead of corporations. No longer does Buy American mean anything – actually, it's been outlawed by our trade agreements. There is no drive among our leaders anymore for America to be self-sustaining, which includes taking care of the least of us because we're all in this together. Capitalism as practiced by corporations is dead, it just refuses to be buried. Supported by the Fed handouts it's busy handing out crutches for the entities it's crippled – which it then intends to kick the crutches out from under. Hilarious ehh? Universities, hospitals, pharma, the post office you name it used to all be self-sustaining entities that people could afford or that provided needed services at low prices and actually cared about people. Self-sustaining to me means America having the best food, the best health care, the best education, the happiest people and on and on – the shining city on the hill so to speak. Instead we get crapification of everything we need and it's all for sale to the highest bidder who then crapifies everything even more. It's a race to the bottom and the ultimate goal is a floor full of crutches and no one left standing.Masonboro , October 29, 2015 at 5:23 pm
I meant : "It's a race to the bottom and the ultimate goal is a floor full of broken crutches and no one left standing."Adam Eran , October 29, 2015 at 2:23 pm
The medical association I use actually has a C-level job called "Chief Efficiency Officer". Her latest was raising the bar for hospital referrals thus reducing insurance company costs and increasing consumer (I have stopped saying patient) risk. The incentive is the insurance companies are kicking back part of the extra profit. Another case of privatize profit – socialize cost since the added cost to consumers is impossible to measure. If I can find the letter from the association announcing (and attempting to rationalize) the change, I will email a copy to Lambert.
JimMickey Marzick , October 29, 2015 at 2:29 pm
Worth a look: Matthew Stewart's The Management Myth . It discloses that the very foundations of "scientific management" originating with Frederick Winslow Taylor were flawed. Taylor cooked the results of his "scientific" experiments in getting more productivity from the workforce to fit his theories. The first MBA - Penn's Wharton School - was founded on this con. Similar cons were at the inception of the Harvard MBA.
The "MBA Mentality" - embodied by W, among others - says everything can be measured, and measurement is what makes it real. Hence testing our students until their eyeballs bleed is now an endorsed strategy to improve educational outcomes. No actual science supports this conclusion, but that hasn't stopped the people who want to leave No Child Behind(tm).
Turns out, management is a liberal art! Who knew?!Jesper , October 29, 2015 at 5:13 pm
"The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market. Both ideas have far-reaching implications. The claim that every organisation - whether it is a mining company, a hospital, a school, a professional association or a charity - must be structured according to a single model, conforming to a single set of legislative requirements, Originally conceived as a strategy to manage large and increasingly complex organisations, in the contemporary world, no aspect of social life is now considered to be exempt from managerialist principles and practices."
This is an apt description of MARKET TOTALITARIANISM.
MBAs and project managers armed with their metric-driven spreadsheets in pursuit of "best practice" – market lebensraum – speak the same language and spearhead this offensive against the welfare state. A managerial elite devoted to the belief that the the market will set you free functions much like the Waffen SS did in another regime with explicit totalitarian aspirations. The need for concentration camps is not needed in this version of totalitarianism because "no aspect of social life is exempt from managerialist principles and practices." The institutions of civil society have been captured by this "weltanshuung/zeitgeist" and dissent is lost in the "nacht und nebel" of the eternal present.
Herbert Marcuse [One Dimensional Man], Eric Fromm, [Escape From Freedom] and the Frankfurt School broached the idea of what has evolved into "market totalitarianism" shortly after the Second World War. Dismissed largely as a Marxist rant it did not garner much traction inside or outside of academia, especially in this country. I suspect many of you are too young to be familiar with this body of work – no fault of yours. Nevertheless, LIBERALISM 2.0 [aka neoliberalism] did not capture the hearts and minds of the political classes until the 1970s signified by Ronald Reagan's election in 1980. From then on it gathered steam and by the 1990s it was apparent that "market totalitarianism" was on the rise, if not yet ascendant.
Orwellian concepts like "doublethink/doublespeak" resonated as the language employed in political discourse became little more than smoke and mirrors. "Reform" signified a revamping of welfare and criminal justice. It also has come to mean little more than slash-and-burn CUTS to programs associated with the welfare state or their outright privatization under the rubric of "choice" . Natural gas and electric rate "choice" programs exemplify this approach. Indeed, the two biggest prizes – Social Security and Medicare – are subject to calls for "entitlement reform" by Republicans and Democrats alike. That both programs have been internalized in the minds of many as "entitlements" destined for "reform" testifies to this. The federal deficit matters now and the hysteria surrounding it will likely be a primary talking point in the 2016 elections. The question of how will we pay for the expansion of any program barring tax increases will become the retort by those opposed to both, MMT notwithstanding.
The Great Recession has been portrayed as an anomaly or as a normal part of the business cycle and precipitated some rethinking. But make no mistake about it, the market totalitarian impetus in this country continues unabated. If anything, the monotheism of the market has accelerated in some respects as "businesspersons" – Donald Trump and Carly Fiorina – from the private sector now vie for the presidential nomination of the Republican Party. The very idea that business acumen/experience is now of paramount importance in running this country – as a business – testifies to the pervasiveness of market totalitarianism. It is now deep rooted in civil society.
Even here in Akron, there are plans to rename the University of Akron: the Ohio Polytechnic University! Fans of Firesign Theater back in the day will recall the rivalry between "more science high" and "commie-martyrs' high school! It would be funny in most circumstances. but who's laughing now? Many a former rubber rat plan to vote for Trump!
I have come to the conclusion that "market totalitarianism" now has to run its course in this country. The Achilles' heel of market totalitarianism may be how and where it stifles/smothers innovation, subjugating research and development to market criteria in which the short term trumps the long term. To the extent that dissent/conflict is fundamental to innovation and cannot be confined to the laboratory, then resistance is NOT futile. It remains to be seen whether that dissent can be co-opted or reappropriated indefinitely by market totalitarianism in this country or not, yet alone outside of its borders.Jim , October 29, 2015 at 5:47 pm
Ban collective bargaining and the collective will suffer. If a government was allowed to negotiate for the collective against the suppliers then maybe the outcome would be different. But as we all know, letting the government co-ordinate and negotiate for the collective will make it worse for some individuals so ..
The needs of the many do not(?) outweigh the needs of the few. Be it for healthcare, education or?
"The Scourge of Managerialism" raised some profoundly important issues.
But its fundamental assumption " the traditional control by business owners in Europe and North American gave way during the 19th century to corporate control of companies. This lead to the emergence of a new group of professional whose job it was to perform the administrative tasks of production"–is only half correct.
The creation of "professional managers" was not simply shaped by market fundamentalism but also by the progressive movement itself. Robert H. Wiebe's book "The Search for Order: 1877-1920, does a remarkable job of detailing this process.
The trajectory runs from local autonomy once being the heart of American democracy, to the incremental erosion of the autonomy of community, to the supposedly necessary regulatory, managerial needs of urban-industrial life. and finally to the creation of flexible administrative devices that tended to encourage the creation of professional managers(in both the public and private sectors) and the increasing centralization of authority.
Can any renewal of democracy begin without a dismantling of professional managerial authority in both the market and the state?
Is a breakdown of centralized bureaucratic power (both public and private) a precondition for democratic renewal?
Jun 28, 2017 | economistsview.typepad.com
anne , June 27, 2017 at 03:39 PMhttp://cepr.net/publications/op-eds-columns/the-skills-gap-blaming-workers-rather-than-policy
June 25, 2017
The Skills Gap: Blaming Workers Rather than Policy
By Dean Baker
Last week Donald Trump visited a technical college in Wisconsin. He was accompanied by Wisconsin Governor Scott Walker, several members of Congress, and top officials in his administration. The theme was promoting apprenticeship programs that give workers job specific skills. Trump, along with the rest of his contingent, bemoaned the fact that employers cannot find workers with the skills they need. This theme was picked up by many in the media, including many who are not Republicans, who argued that workers in the U.S. are not getting ahead because they lack the necessary skills.
The striking feature about this argument is how widely it gets repeated, even when the evidence continually shows that it is not true. Just to be clear, it is good that U.S. workers get better training. Other countries, most notably Germany and the Nordic countries, do a much better job of training workers who do not get college degrees than the United States.
It is also true that any individual worker will almost certainly be better off in the labor market if they could acquire more skills. Certainly the best advice to a young person completing high school would be to try to go to college or alternatively to get the training needed to be a physical therapist, dental hygienist, or some other moderately well-paying professional. Insofar as the government can facilitate this education and training it will be good for both the workers and the economy as a whole.
But that is very different from claiming that the main reason that millions of workers are unemployed or out of the labor force is that they don't have the right skills. This claim is endlessly put forward, in both the United States and elsewhere, even in contexts where it is obviously not true.
The unemployment rate in the United States fell to 4.3 percent in May, so the claim that companies may be having trouble finding qualified workers is more plausible now than earlier in the recovery. But even now that the labor market is hugely stronger than at its low points in the Great Recession there is still reason to question the skills shortage view.
First and foremost we are not seeing the sort of rapid wage growth that would be expected if there were widespread skills shortage. This is a story where companies would like to expand their business but are prevented from doing so because they can't find any workers with the skills they need.
However there are always some workers somewhere who have the needed skills. Companies could offer higher wages to lure workers away from competitors. Or, they can make a point of recruiting in more distant areas and offering to pay travel and location expenses for workers.
We don't see this sort of bidding war for workers taking place in any major sector of the economy. While there may be a few occupations in a few areas where employers really are bidding up wages rapidly, this is not happening in most sectors of the labor market.
The other reason we know the skills shortage story does not fit is that there is no noticeable increase in the length of the average workweek for any major group of workers. The story we would expect to see if companies could not hire more workers is that they would instead work their existing workforce more hours, paying them overtime if necessary. We don't see this happening on any large scale either. The length of the average workweek is actually slightly shorter now than it was two years ago. Here also, there is no major area of the economy in which are seeing lengthening workweeks in a manner that would be consistent with the skills shortage story....
Apr 12, 2017 | cepr.net
The Washington Post and other major news outlets are strong supporters of the trade policy pursued by administrations of both political parties. They routinely allow their position on this issue to spill over into their news reporting, touting the policy as "free trade." We got yet another example of this in the Washington Post today.
Of course the policy is very far from free trade. We have largely left in place the protectionist barriers that keep doctors and dentists from other countries from competing with our own doctors. (Doctors have to complete a U.S. residency program before they can practice in the United States and dentists must graduate from a U.S. dental school. The lone exception is for Canadian doctors and dentists, although even here we have left unnecessary barriers in place.)
As a result of this protectionism, average pay for doctors is over $250,000 a year and more than $200,000 a year for dentists, putting the vast majority of both groups in the top 2.0 percent of wage earners. Their pay is roughly twice the average received by their counterparts in other wealthy countries, adding close to $100 billion a year ($700 per family per year) to our medical bill.
While trade negotiators may feel this protectionism is justified, since these professionals lack the skills to compete in the global economy, it is nonetheless protectionism, not free trade.
We also have actively been pushing for longer and stronger patent and copyright protections. While these protections, like all forms of protectionism, serve a purpose, they are 180 degrees at odds with free trade. And, they are very costly. Patent protection in prescription drugs will lead to us pay more than $440 billion this year for drugs that would likely sell for less than $80 billion in a free market. The difference of $360 billion comes to almost $3,000 a year for every family in the country.
It is also worth noting patent protection results in exactly the sort of corruption that would be expected from a huge government imposed tariff. (When patents raise the price of a drug by a factor of 100 or more, as is often the case , it is equivalent to a tariff of 10,000 percent.) The result is that pharmaceutical companies often make payoffs to doctors to promote their drugs or conceal evidence that their drugs are less effective than claimed or even harmful.
Raye 2 days agoHarlan -> Raye , 2 days ago
I was pleased to see that PBS looked into the matter of physician supply a few years ago.. They noted: "There are fewer physicians per person than in most other OECD countries. In 2010, for instance, the US had 2.4 practicing physicians per 1000 people--well below the OECD average of 3.1." They also noted that "US physicians get higher incomes than in other countries." They didn't go so far as to note a cause-and-effect relationship here, a deliberate restriction of supply going on, for purposes of raising MD incomes. But at least they were presenting the facts.
They even mentioned the $750 billion wasted each year by our health care system.. I expect it's up to at least $3000 per person by now. And they suggested some good uses that so much money could be put to (VA health care, state college education for all the 17- and 18-year-olds in the country). I would like to add another use. If we were wasting less on overpriced health, more people might be able to afford a little more leisure and recreation time. And this (especially the recreation time) might lead to a lowering of our very high rates of obesity, diabetes and prediabetes.Harlan , 3 days ago
Physician density (as reported by CIA dot gov with dates) shows Canada with smaller ratio than the U.S. but they still retain lower costs, and U.K. though higher by 10 or 15% has considerably lower costs, and the U.S. has more specialists but they get higher incomes, and states with more doctors have higher incomes.
We may need more doctors, especially general practitioners, and more medical schools since 8% of U.S. citizens are forced to train abroad already, but increased supply won't lower costs. It is the medical system and not the supply of doctors that determines fees being charged, which only amount to 10% of total costs. Cut their fees 30% and you still have a $1 trillion 1/3 cost higher than other developed nations. Doctors are not the main cause of the dysfunctional system. Look at what other countries do.Harlan ->Harlan , 3 days ago
This bolsters my case, there is a high skills job shortage. Take 100,000 proposed increase in doctors and give the jobs exclusively to foreign graduates, and you've robbed Americans of needed jobs. College graduates only have a 2.5 percent unemployment rate because they take jobs away from those without college. So lack of enough high skills jobs really hurts the working class lower income groups with less formal education.
New argument, pay attention. No one would deny that a gap of 1 million jobs, or nearly 1% of increased unemployment (really only .8% since there are 120 jobs), is enough to suppress wages, induce slack in the economy, suppress growth, and possibly even create contraction or self sustaining stagnation. Well a 100,000 new doctor jobs is only 1/10 of that amount. How important is that? I would argue it's very important. 10 percent cause of any such serious effect as a 1 percent rise in unemployment is nutty to dismiss. That's why we cheer when the unemployment drops even .1 percent. You don't get the benefits of full employment until reach full employment, whether 1 percent away or .1 percent away. Really.
Even the Most Educated Workers Have Declining Wages
Feb 2015David Havelka , 3 days ago
Was trying to highlight this report, but buried the lead:
Even the Most Educated Workers Have Declining Wages
Also in my comment where I wrote "since there are 120 jobs," obviously meant "120 million jobs".
And finally, left out a "you" in closing:
You don't get the benefits of full employment until you reach full employment, whether 1 percent away or .1 percent away.Harlan-> David Havelka , 3 days ago
Isn't 10 years and 1 million dollars too much for the average family practice physican to pay to become a doctor. Reducing the cost of educating a doctor would be a better solution. Increasing the use of midwives and nurse practicioners is another unexplored solution.
Stop using the term "free trade" at all...when wall street bankers and hedge fund managers and the corporate media use the term "free trade", what they are really talking about is labor arbitrage. Shifting factories to nations with the lowest worker living standards, health, safety and environmental standards. It usually means a nation without a democracy, run by either oligarchs or despots.
As best I can see, neither NAFTA or any other "free trade" agreement mentions anything about wages, or for that matter worker health and safety, or environmental standards. The only purpose of NAFTA and TPP was to force trade partners to accept US patent and copyright protections as the price of access to the lucrative US market.
Dean's argumen that just because we import cheap foreign labor to displace American workers in the contruction and lawn-mowing and housekeeping labor markets, it's fair and justified to import highly educated professionals seems wrong-headed to me. Are you talking about extending H1B Visa categories to include doctors.
In my opinion the people behind the high cost of highly educated professions is the AMA, and the universities and education trade associations---who set the standards for doctors and lawyers, and are the ones demanding foreigners complete American educational standards to be permitted to work in the USADavid Havelka -> Harlan , 2 days ago
The truth is the exact opposite of what you report. The medical educational establishment favors increased admissions. The AMA is another story, perhaps. In any event you need more medical schools for more doctors, not lower standards or importing more than the already high 12% foreign medical school graduates we recruit each year.
Our high standards are fine. But already 8% of US citizens train abroad for lack of medical schools. Even if you don't favor more doctors, that in itself screams for more U.S. medical schools.
From the Association of American Medical Colleges
Tuesday, March 14, 2017
New Research Reaffirms Physician Shortage
Shortages Likely to Have Significant Impact on Patient Care
More corrections: H1B can already include doctors, though 60 percent are in tech. Trade agreements were not about patents and copyright, they were about making it easier to do what they were already doing. No surprise is you lower barriers to trade, your domestic industry suffers in competition with cheaper goods. Unions opposed them to protect their jobs. Do you think the union officials were geniuses and the economists were stupid? Or was it common sense exactly what would happen and that it was just too convenient for economists not to favor trade, deregulation of banks, lower taxes, derivative markets, hedge funds.Harlan -> David Havelka , 2 days ago
Sound like "fake news"---the educational establishment supports increasing admissions but if the price of admission is 10 years and 1 million dollars, well....so the cost of entry they charge is usually a barrier to entry.. Aside from that, there is the standards for admission are set by the educational establishment...so between the two, what have you got? A contrived limit on doctors. Oh, but apologists for the educational establishment like you keep repeating the PR/BS line that universities and trade unions want to increase admissions to medical schools.
Next another one of your "facts" that sounds seriously contradictory...that trade agreements make things "easier" to do what they were doing. HUH? What does that mean? Look none of the trade agreements have anything to do with anything except patent and copyright protection. If a trading partner accepts patent and copyright protection for their economy, they get access to the Us market without trade barriers. Except for productts that receive public subsidies, like franken-food and growth hormone treated meat. So a trading partner is forced to remove the barriers to entry on things like the growth hormone raised beef to Japan, and genetically modified and subsidized crazycorn to Mexico. Is that what you mean by "making things easier"....Sure it makes things "easier"---but is that the point? Or do citizens from Japan have the right to prohibit meat raised with growth hormones? Or do Mexican citizens have the right to prohibit genetically raised corn?
Look, "free trade" is a utopian fantasy, invented by a bunch of liars to sell something to the US consumer that isn't good for him.AlanInAZ , 3 days ago
Why don't you try reading what people wrote before posting under their comment? I'm against trade agreements and increased trade that undercuts American workers.
Maybe you should read even the most elementary news report on the effect of NAFTA and China's entry into the WTO. Patent and copyright protections were neither the main motivation nor an important effect. China pays little heed to any IP law anyway and their state efforts to coerce and steal American technology are barely concealed.
Japan doesn't buy American due to cultural norms, American incompetence, and laziness, and Japanese protectionist laws and regulations.
Most free traders have been Republicans, and most objections to free trade have come from the Democrats and the left. Except for Trump Clinton reversal, Liberals (and unions) can claim the high ground over conservatives when it comes to trade issues. This blog and Dean Baker consistently decries the effects of international trade and trade agreements effects on the working class.
There is a shortage of medical schools, there is no shortage of qualified students, admissions standards do not prevent medical student enrollment from increasing. Your comment is virtually fact free.
You obviously hate education and unions and real news.Mitch Beales , 3 days ago
Expanding doctor supply without major changes to the insurance system is as likely to increase overall healthcare costs as reduce them. In the world of healthcare, demand increases to meet supply.
The country with the insurance and healthcare system closest to the US is probably Switzerland with the exception that costs are controlled with a national fee for service scale (TARMED).
The Swiss estimate that each new private medical practice adds $536,000 per doctor to the nation's overall healthcare spending. This is one of the main reasons the Swiss limit the number of new medical practices and control doctor immigration to balance demand. The Swiss are concerned about rising costs and the government is now proposing to reduce the allowable charges by specialists.
Those that are attracted to Baker's immigration proposal should ask what is the long term consequence of relying on immigration to fill the doctor shortfall and/or control cost. In the short run there may be some average income reduction for physicians with little or no change in total healthcare costs (remember total cost equals average income times the larger number of doctors). Longer term, it restricts domestic investment in expansion of healthcare training and that is a restriction of opportunity for all Americans.pieceofcake , 3 days ago
Bbbbut patents are essential to allow top executives to extract half the annual expenditures of unprofitable corporations in compensation while still leaving a few pennies for "research".Harlan , 3 days ago
'U.S. Pursues Selective Protectionism: Not Free Trade'
Oh absolutely - and I'm also really worried about these doctors... and the meat - the meat - as if we can't export all of our meat to China - we for sure will need more doctors to operate on all these oversized boobs which will grow if we have to eat all of our hormone meat by ourselves - and you know how painful it is to carry these big boobs around?
And I happen to know this Plastic Surgeon who told me we need lots and lot more Plastic Surgeons -(as Americans get older and older) - and perhaps - if your plan finally comes through - also facelifts will get cheaper - as who wants to have her or his face done in a undeveloped country -(even if it comes with a nice and long vacation)
So more power to y'a and you finally have completely convinced me and let's do it together!
Get them doctors!!David Havelka ->Harlan , 3 days ago
There is no protectionism when it comes to doctors as they are well represented by immigrants who make up 12% of doctors, including new doctors, comparing favorably to the near record 13.5% U.S. immigrant population.
U.S. doctors don't make twice the salary of other developed countries, with their incomes running about 40% to 60% for GPs and specialists respectively.
More doctors should be supplied by relieving the shortage of medical schools, even an extra 100,000 would help the working class stop getting bumped into unemployment by an overskilled work force. Too many college graduates and not enough jobs, so they bump off those without. They get 2.5% unemployment, those without north of 5 or 7%.
This paper cited below clearly shows we do not pay our doctors twice the salary of other developed countries. The figure is actually around 40% for those in general practice, 60% for specialists, and largely because U.S. salaries overall are higher (in every occupation). When you look at the comparative advantage a doctors salary in any country enjoys over the average salary in that country, even that advantage largely disappears. See figure 2 on page 16 for general practitioners and and figure 6 on page 21 for specialists.
"THE REMUNERATION OF GENERAL PRACTITIONERS AND SPECIALISTS IN 14 OECD COUNTRIES: WHAT ARE THE FACTORS INFLUENCING VARIATIONS ACROSS COUNTRIES?"
Unlike Dean Baker's anti-labor, anti-working class stance that we should end any protection against importing cheaper foreign labor to undercut wages, we should of course afford the same protections to all occupations.Mitch Beales ->David Havelka , 2 days ago
It is the Democrat Party politics that is behind the high cost of doctors and lawyers. Why because the Educational establishment---the trade associattions and the universities themselves are the ones limiting the admissions, and the ones demanding that all medical professioanls get their education and qualifications through themselves...And we all know that is the universities, the education trade unions and their lobbiest that are one of the most powerful constituencies for the Democrat Party.Harlan ->David Havelka , 3 days ago
It is the republic party that is behind the high cost of everything as well as the pollution of the internet with ridiculous comments like yours.David Havelka ->Harlan , 2 days ago
The truth is the exact opposite of what you report. The medical educational establishment favors increased admissions.
From the Association of American Medical Colleges
Tuesday, March 14, 2017
New Research Reaffirms Physician Shortage
Shortages Likely to Have Significant Impact on Patient Careskeptonomist ->Harlan , 3 days ago
Sound like a "fake newa"...so the educational establishment's official public relations read BULL-TOSS position is to support increased admissions to medical school. Yet the same establishment imposed the "barrier to entry" cost of obtaining a doctor ticket, 10 years and 1 million dollars. And who the heck sets the admission standards for their precious schools that results in the high rejection rate of applicants.
Fake news...about a reliable as a Democrat's promise that he's for the working folks.
The OECD article should be read by anyone interested in this. Figure 11 shows that the number of physicians in the US is close to the OECD average - in fact the number of specialists is actually less, but the US level of pay is higher. Of course there is also no correlation of pay with the fraction of foreign doctors.
And despite the supposed shortage of GP's in the US their pay is still much less. The "law" of supply and demand just does not apply in this field. That "law" also does not work in certain other areas where important conclusions are drawn from it - applying it is not a substitute for empirical evidence.
The comparison of physician pay would be better if done with the overall median rather than average. Greater inequality in the US means that the average pay is greater than in the other countries.
May 05, 2017 | www.nakedcapitalism.comJames Levy , May 4, 2017 at 1:14 pmclarky90 , May 4, 2017 at 5:51 pm
I used to think that much of modern conservatism was simply a misguided, wrong-headed alternative attempt to formulate policies for the general welfare. Then I read Corey Robin's book The Reactionary Mind and started reevaluating that presumption.
The entire spectrum of political thought from the neoliberal center to the reactionary right is really about setting up punitive systems of coercion and control. They hate the "losers" and want them punished. They really believe that the beatings should continue until morale improves, that if you make things unbearable people will pull themselves up by their bootstraps, and if they don't then they deserve all the cruelty that can be heaped upon them.
The poor are errant children who need to be molded. Conservatives may whine about the "nanny state" but what they really want to see is either the negligent mommy state or the abusive daddy state. They want to "help" the poor the way a drill instructor wants to help you learn to obey and kill. And remember: it's for your own good. Perhaps I am being unfair, but beneath the platitudes this seems to be the motivating ideology of too much of the contemporary governing class.clarky90 , May 4, 2017 at 7:37 pm
IMO, Parise (an economist) is following a well-worn "playbook".
- (1) Identify the group targeted for liquidation. (Roma, Jew, kulak, Aborigine, American Indian, American Deplorables .)
- (2) Recruit insider scientists/intellectuals to to "discover" that the targeted group is sub-normal cognitively (unworthy of Life).
- (3) Have a Noble Cause that requires Tough Action by Determined Leaders (Collectivization, Racial Purity, Bringing Christian Values, Saving the Planet .)
- (4) Proceed, as Stalin would say, to "break the eggs to make the omelette". (Democide). This is the "unpleasant cleansing" that, however disturbing, must be done for the "greater good".
It is happening, as I speak, in the beautiful little town that I grew up in, on the banks of the Ohio River, in Southern Ohio. (drugs and hopelessness)
Seventy-five years ago, it happened to my Jewish forebears in Belarus. Three hundred years ago my Minqua (Iroquois) forbears were destroyed by this murderous rationalization.
This sort of article is not an exchange of ideas, but rather a crafted assault on a vulnerable group of humanity (in this case, the Poor)
Thank you Yves for bringing this to our attention!Adam Eran , May 4, 2017 at 6:08 pm
This last century, Scientists, Intellectuals, Academics, and Religious Leaders have been viewed as Powerful Military Assets, or Military Threats by totalitarian regimes. They have been used to progress the goals of regimes. (The Nazi Doctors of Auschwitz)
Or, if they question the regime, they are the first to be rounded up, jailed or murdered.
The Khmer Rouge immediately murdered anybody who wore glasses or had soft hands.(Intellectuals).
When the Soviet Union invaded Latvia, Lithuania and Estonia in 1940, the first thing the NKVD did was round up local Scientists, Intellectuals, Academics, Religious Leaders and Cultural Leaders and deport them to the Gulags or, more likely, kill them.
The Nazis behaved in exactly the same way with the Cultural leadership of Poland, Czechoslovakia, Yugoslavia ..
This is how totalitarian regimes operate and how they view the "brainiacs" of this World. Brainiacs are merely military assets to be deployed brutally against the enemy. Or, if the Brainiacs are perceived to be "Assets of the Enemy", they are targeted for destruction- First, Foremost and on the double!
I believe that we have a naive view of "experts"; imagining benign, tweed coated/skirted, helpful, good-hearted, "Good Will Hunting" types. Thanks Hollywood!
MSM! Why this fairly screams David Brooks' name!
Mar 11, 2017 | economistsview.typepad.com
djb : March 11, 2017 at 06:42 AM
Why hurting the poor will hurt the economy - The Washington Post
that this topic even needs a special article about it is proof of the sad state of affairs of economics today
Why trying to help poor countries might actually hurt them - The Washington Post
Nobel-winning economist Angus Deaton argues against giving aid to poor countries
It sounds kind of crazy to say that foreign aid often hurts, rather than helps, poor people in poor countries. Yet that is what Angus Deaton, the newest winner of the Nobel Prize in economics , has argued.
Deaton, an economist at Princeton University who studied poverty in India and South Africa and spent decades working at the World Bank, won his prize for studying how the poor decide to save or spend money. But his ideas about foreign aid are particularly provocative. Deaton argues that, by trying to help poor people in developing countries, the rich world may actually be corrupting those nations' governments and slowing their growth. According to Deaton, and the economists who agree with him, much of the $135 billion that the world's most developed countries spent on official aid in 2014 may not have ended up helping the poor.Angus Deaton (LARRY LEVANTI/AFP/Getty Images)
The idea of wealthier countries giving away aid blossomed in the late 1960s, as the first humanitarian crises reached mass audiences on television. Americans watched through their TV sets as children starved to death in Biafra, an oil-rich area that had seceded from Nigeria and was now being blockaded by the Nigerian government, as Philip Gourevitch recalled in a 2010 story in the New Yorker. Protesters called on the Nixon administration for action so loudly that they ended up galvanizing the largest nonmilitary airlift the world had ever seen. Only a quarter-century after Auschwitz, humanitarian aid seemed to offer the world a new hope for fighting evil without fighting a war.
There was a strong economic and political argument for helping poor countries, too. In the mid-20th century, economists widely believed that the key to triggering growth -- whether in an already well-off country or one hoping to get richer -- was pumping money into a country's factories, roads and other infrastructure. So in the hopes of spreading the Western model of democracy and market-based economies, the United States and Western European powers encouraged foreign aid to smaller and poorer countries that could fall under the influence of the Soviet Union and China.
The level of foreign aid distributed around the world soared from the 1960s , peaking at the end of the Cold War, then dipping before rising again. Live Aid music concerts raised public awareness about challenges like starvation in Africa, while the United States launched major, multibillion-dollar aid initiatives . And the World Bank and advocates of aid aggressively seized on research that claimed that foreign aid led to economic development.
Deaton wasn't the first economist to challenge these assumptions, but over the past two decades his arguments began to receive a great deal of attention. And he made them with perhaps a better understanding of the data than anyone had before. Deaton's skepticism about the benefits of foreign aid grew out of his research, which involved looking in detail at households in the developing world, where he could see the effects of foreign aid intervention.
"I think his understanding of how the world worked at the micro level made him extremely suspicious of these get-rich-quick schemes that some people peddled at the development level," says Daron Acemoglu, an economist at MIT.
The data suggested that the claims of the aid community were sometimes not borne out. Even as the level of foreign aid into Africa soared through the 1980s and 1990s, African economies were doing worse than ever, as the chart below, from a paper by economist Bill Easterly of New York University, shows.
William Easterly, "Can Foreign Aid Buy Growth?"
The effect wasn't limited to Africa. Many economists were noticing that an influx of foreign aid did not seem to produce economic growth in countries around the world. Rather, lots of foreign aid flowing into a country tended to be correlated with lower economic growth, as this chart from a paper by Arvind Subramanian and Raghuram Rajan shows.
The countries that receive less aid, those on the left-hand side of the chart, tend to have higher growth -- while those that receive more aid, on the right-hand side, have lower growth.
Raghuram G. Rajan and Arvind Subramanian, "Aid and Growth: What Does the Cross-Country Evidence Really Show?"
Why was this happening? The answer wasn't immediately clear, but Deaton and other economists argued that it had to do with how foreign money changed the relationship between a government and its people.
Think of it this way: In order to have the funding to run a country, a government needs to collect taxes from its people. Since the people ultimately hold the purse strings, they have a certain amount of control over their government. If leaders don't deliver the basic services they promise, the people have the power to cut them off.
Deaton argued that foreign aid can weaken this relationship, leaving a government less accountable to its people, the congress or parliament, and the courts.
"My critique of aid has been more to do with countries where they get an enormous amount of aid relative to everything else that goes on in that country," Deaton said in an interview with Wonkblog. "For instance, most governments depend on their people for taxes in order to run themselves and provide services to their people. Governments that get all their money from aid don't have that at all, and I think of that as very corrosive."
It might seem odd that having more money would not help a poor country. Yet economists have long observed that countries that have an abundance of wealth from natural resources, like oil or diamonds, tend to be more unequal, less developed and more impoverished, as the chart below shows. Countries at the left-hand side of the chart have fewer fuels, ores and metals and higher growth, while those at the right-hand side have more natural resource wealth, yet slower growth. Economists postulate that this "natural resource curse" happens for a variety of reasons, but one is that such wealth can strengthen and corrupt a government.
Like revenue from oil or diamonds, wealth from foreign aid can be a corrupting influence on weak governments, "turning what should be beneficial political institutions into toxic ones," Deaton writes in his book "The Great Escape: Health, Wealth, and the Origins of Inequality." This wealth can make governments more despotic, and it can also increase the risk of civil war, since there is less power sharing, as well as a lucrative prize worth fighting for.
Deaton and his supporters offer dozens of examples of humanitarian aid being used to support despotic regimes and compounding misery, including in Zaire, Rwanda, Ethiopia, Somalia, Biafra, and the Khmer Rouge on the border of Cambodia and Thailand. Citing Africa researcher Alex de Waal, Deaton writes that "aid can only reach the victims of war by paying off the warlords, and sometimes extending the war."
He also gives plenty of examples in which the United States gives aid "for 'us,' not for 'them'" – to support our strategic allies, our commercial interests or our moral or political beliefs, rather than the interests of the local people.
The United States gave aid to Ethiopia for decades under then-President Meles Zenawi Asres, because he opposed Islamic fundamentalism and Ethiopia was so poor. Never mind that Asres was "one of the most repressive and autocratic dictators in Africa," Deaton writes. According to Deaton, "the award for sheer creativity" goes to Maaouya Ould Sid'Ahmed Taya, president of Mauritania from 1984 to 2005. Western countries stopped giving aid to Taya after his government became too politically repressive, but he managed to get the taps turned on again by becoming one of the few Arab nations to recognize Israel.
Some might argue for bypassing corrupt governments altogether and distributing food or funding directly among the people. Deaton acknowledges that, in some cases, this might be worth it to save lives. But one problem with this approach is that it's difficult: To get to the powerless, you often have to go through the powerful. Another issue, is that it undermines what people in developing countries need most -- "an effective government that works with them for today and tomorrow," he writes .
The old calculus of foreign aid was that poor countries were merely suffering from a lack of money. But these days, many economists question this assumption, arguing that development has more to do with the strength of a country's institutions – political and social systems that are developed through the interplay of a government and its people.
There are lot of places around the world that lack good roads, clean water and good hospitals, says MIT's Acemoglu: "Why do these places exist? If you look at it, you quickly disabuse yourself of the notion that they exist because it's impossible for the state to provide services there." What these countries need even more than money is effective governance, something that foreign aid can undermine, the thinking goes.
Some people believe that Deaton's critique of foreign aid goes too far. There are better and worse ways to distribute foreign aid, they say. Some project-based approaches -- such as financing a local business, building a well, or providing uniforms so that girls can go to school -- have been very successful in helping local communities. In the last decade, researchers have tried to integrate these lessons from economists and argue for more effective aid practices.
Many people believe that the aid community needs more scrutiny to determine which practices have been effective and which have not. Economists such as Abhijit Banerjee and Esther Duflo, for example, argue for creating randomized control trials that allow researchers to carefully examine the development effects of different types of projects -- for example, following microcredit as it is extended to people in poor countries.
These methods have again led to a swell in optimism in professional circles about foreign aid efforts. And again, Deaton is playing the skeptic.
While Deaton agrees that many development projects are successful, he's critical of claims that these projects can be replicated elsewhere or on a larger scale. "The trouble is that 'what works' is a highly contingent concept," he said in an interview. "If it works in the highlands of Kenya, there's no reason to believe it will work in India, or that it will work in Princeton, New Jersey."
The success of a local project, like microfinancing, also depends on numerous other local factors, which are harder for researchers to isolate. Saying that these randomized control trials prove that certain projects cause growth or development is like saying that flour causes cake, Deaton writes in his book. "Flour 'causes' cakes, in the sense that cakes made without flour do worse than cakes made with flour – and we can do any number of experiments to demonstrate it – but flour will not work without a rising agent, eggs, and butter – the helping factors that are needed for the flour to 'cause' the cake."
Deaton's critiques of foreign aid stem from his natural skepticism of how people use -- and abuse -- economic data to advance their arguments. The science of measuring economic effects is much more important, much harder and more controversial than we usually think, he told The Post.
Acemoglu said of Deaton: "He's challenging, and he's sharp, and he's extremely critical of things he thinks are shoddy and things that are over-claiming. And I think the foreign aid area, that policy arena, really riled him up because it was so lacking in rigor but also so grandiose in its claims."
Deaton doesn't argue against all types of foreign aid. In particular, he believes that certain types of health aid – offering vaccinations, or developing cheap and effective drugs to treat malaria, for example -- have been hugely beneficial to developing countries.
But mostly, he said, the rich world needs to think about "what can we do that would make lives better for millions of poor people around the world without getting into their economies in the way that we're doing by giving huge sums of money to their governments." Overall, he argues that we should focus on doing less harm in the developing world, like selling fewer weapons to despots, or ensuring that developing countries get a fair deal in trade agreements, and aren't harmed by U.S. foreign policy decisions.
Deaton also believes that our attitude toward foreign aid – that developed countries ought to swoop in and save everyone else – is condescending and suspiciously similar to the ideas of colonialism. The rhetoric of colonialism, too, "was all about helping people, albeit about bringing civilization and enlightenment to people whose humanity was far from fully recognized," he has written.
Instead, many of the positive things that are happening in Africa – the huge adoption in cell phones over the past decade, for example – are totally homegrown. He points out that, while the world has made huge strides in reducing poverty in recent decades, almost none of this has been due to aid. Most has been due to development in countries like China, which have received very little aid as a proportion of gross domestic product and have "had to work it out for themselves."
Ultimately, Deaton argues that we should stand aside and let poorer countries develop in their own ways. "Who put us in charge?" he asks.Inequality
Mar 11, 2017 | economistsview.typepad.comPaine : March 11, 2017 at 05:49 AMI hate the the use of word "THE POOR " by liberal politicians It's like deplorable It's an insultPaine -> Paine... , March 11, 2017 at 05:58 AM
"Struggling " is a far better term if we need a category for distressed citizens. Jobless of course leaves out The huge Category of low wage short hours households. Liberals want to help, want to be charitable, but the real social blight is lack of opportunity to make a decent living thru wage work
Wage rates and hours
Households cope with this blight. They struggle tinline and hold on to some happiness in the Jeffersonian use of the word happinessSafety nets are not necessary if opportunity provides alternatives. More jobs more hoursRC AKA Darryl, Ron -> kthomas... , March 11, 2017 at 08:10 AM
And instead we curb the jobs and hours expansion rate because we refuse to socialize even in part the pricing mechanism
We know what potential for mobilizing idle hours exits thru correct and adequate micro nautics We did this in 1940 - 44
That was war time and we "tolerated" rations and price boards for the war effort
A similar sense of urgency however can be instilled if leading circles embrace the effort
A war on browning
But first the Threat of global browning. Has to become real in the minds of The citizenryMost people are complicated and Thomas Jefferson was no exception. The better part of him was associated with James Maddison and largely came from Thomas Paine.ilsm -> Paine... , March 11, 2017 at 07:32 AM
But TJ had far too many personal problems to be held up like a saint. To be fair his time was well before even a faint glimmer of effective democracy during the dawn of the modern quasi-electorally appointed republic, an institution designed to emphasize property rights economic and political efficacy over inherited bloodlines.
We moved from the landed aristocracy to the landed gentry. Democracy still remains to be seen in full light of day, even relatively representative.Distribution system of US/EU capitalism has failed. [It is a ] systemic plunder* it passedRC AKA Darryl, Ron -> Paine... , March 11, 2017 at 08:17 AM
l'audace, l'audace toujour l'audaceWell yeah, but that is the best that we can get with largely unanswerable elites in charge of everything. Patronizing triangulation is the natural modus operandi for republican politics under a system of dollar democracy and arcane rules of compartmentalized representation. Sure, pure democracy is too cumbersome, but would a rough approximate of representativeness be too much to ask?
May 27, 2017 | economistsview.typepad.comChristopher H., May 27, 2017 at 09:17 AMhttp://jaredbernsteinblog.com/trump_trade_germany/
Trump, trade, and Germany
by Jared Bernstein
May 26th, 2017 at 1:58 pm
So, at a meeting in Brussels yesterday, President Trump appears to have told leaders of the European Union that "the Germans are bad, very bad." I'll let those with foreign diplomatic chops figure out how to clean that up-and good luck: When I plug the Spiegel Online headline-"Die Deutschen sind böse, sehr böse"-into Google translator, it spits back: "The Germans are evil, very evil."
I'll handle the economics, which actually are interesting. When Trump talks about trade, he sometimes gets a piece of it right, and it's often a piece about which establishment politicians and the economists that support them are in denial: Germany's trade surplus of over 8 percent of GDP really is a problem for the other countries with whom they trade.
That's not just my view. Both Ben Bernanke and more recently, Lord Mervyn King, former governor of the Central Bank of England, have expressed serious concerns about the impact of Germany's large trade surplus on other countries.
But here are two things that I'm sure Trump misunderstands. First, Germany is not manipulating its currency to build its surplus. Instead, it's the single currency of the Eurozone that's the culprit. Germany is the economic powerhouse of the region, with stronger growth and production practices than its Eurozone partners. Thus, if it's currency could float, it would surely appreciate, but it can't, so its goods are underpriced in export markets relative to those countries' exports.
Second, as I'll get to in a moment, it's not clear what Germany should do about it.
In many posts, I've explained that, contrary to conventional wisdom, including the pushback I've already heard from German EU ministers, trade imbalances are not always benign, nor do they represent efficient markets at work. King stresses the damage of currency misalignments, as well as the fundamental arithmetic of global trade. Since trade must balance on a global scale, one country's trade surplus must show up as other countries' deficits. When a country like Germany produces so much more than it consumes (runs a trade surplus), other countries must consume more than they produce (run trade deficits). And when the magnitudes get this large as a share of GDP-Germany's surplus hit a record 8.6 percent of GDP last year-the damage to other nations can be severe.
Bernanke in 2015:
"The fact that Germany is selling so much more than it is buying redirects demand from its neighbors (as well as from other countries around the world), reducing output and employment outside Germany at a time at which monetary policy in many countries is reaching its limits."
Bernanke's last point is key. When economies are percolating along at full employment, trade deficits can, in fact, be benign. But unemployment in the Eurozone is still 9.5 percent, which combines Germany's 3.9 percent with Spain's 18.2 percent, Greece's 23.5 percent, Italy's 11.7 percent, and so on. Germany's massive surplus has cribbed labor demand from those high unemployment countries, but neither the fiscal nor monetary authorities in these nations have undertaken adequate counter-cyclical policies ("why not?" is a good question having to do with constraints of the monetary union and austerity economics).
To be clear, even at full employment, large, persistent trade deficits-which again, are the flipside of large, persistent surpluses-can be problematic. Here in the US, they've hurt our manufacturers and their communities, a fact that Trump exploited in the election. And one can, of course, see similar political dynamics in the weaker parts of European economies.
Trade deficits have also contributed to asset bubbles. They must be financed with borrowed capital, and such flows from surplus countries were clearly associated with our housing bubble in the 2000s, as well as the longer-term "secular stagnation" economist Larry Summers talks about (weak demand, even in mature recoveries).
At this point, the growing group of economists who recognize the importance of these international imbalances are pointing towards the capital flows themselves as the force behind persistent trade deficits. This is an important insight because it belies the simple solution we tend to hear from the mainstream: if only you'd save more, your trade deficit would shrink. But if other countries persist in exporting their savings to us, short of capital controls to block those flows, our trade deficit will also persist.
What could/should Germany do to be more of team player, spreading demand to others instead of hoarding it? The usual recommendation, made by Bernanke, is to take their excess savings and invest them at home, say through more public infrastructure or some other sort of fiscal stimulus. But King makes the good point that since Germany is already pretty much at full employment-recall their 3.9 percent unemployment rate–they may be disinclined to take this advice.
King suggests that they should instead do something to raise the value of their exchange rate (appreciate their currency), but here again, it's not obvious how, as a member of the currency union, they're supposed to go about that.
Surely, the solution Trump intimated-a big tariff on German exports into the US-wouldn't work. For one, such actions invite retaliation, and not only do many of us want to tap the consumer benefits of our robust global supply chains, but Germany has factories here that employ a lot of people making cars and other equipment. That's welcome investment.
Moreover, team Trump is consistently misguided with their unilateral approach to this problem of trade imbalances. As long as foreign capital continues to flow freely into the US from surplus countries, absorbing less from Germany simply implies absorbing more excess savings from somewhere else.
King suggests that the best solution is for deficit countries to get together with surplus countries and, a la Bretton Woods, figure out a "mutually advantageous path to restore growth." That sounds a bit pie-in-the-sky until you consider the economic shampoo cycle ("bubble, bust, repeat") that's been so repeatedly damaging to countries across the globe. Perhaps that would be a motivator for our trading-partner countries, though the longer Trump's out there on the road, the harder it's getting to imagine such forward-looking international coordination.
I too have suggested that President Trump should convene such a commission, but sadly, I'm not the Jared he listens to. In the meantime, he should check out Google Translator before he mouths off.
Christopher H. said... May 27, 2017 at 09:25 AM
"This has only minor spillovers to the United States - maybe Germany's unhelpful role has contributed a bit to our trade deficit, but this is basically an intra-Europe issue."
"To be clear, even at full employment, large, persistent trade deficits-which again, are the flipside of large, persistent surpluses-can be problematic. Here in the US, they've hurt our manufacturers and their communities, a fact that Trump exploited in the election. And one can, of course, see similar political dynamics in the weaker parts of European economies.
Trade deficits have also contributed to asset bubbles. They must be financed with borrowed capital, and such flows from surplus countries were clearly associated with our housing bubble in the 2000s, as well as the longer-term "secular stagnation" economist Larry Summers talks about (weak demand, even in mature recoveries).
At this point, the growing group of economists who recognize the importance of these international imbalances are pointing towards the capital flows themselves as the force behind persistent trade deficits.
This is an important insight because it belies the simple solution we tend to hear from the mainstream: if only you'd save more, your trade deficit would shrink. But if other countries persist in exporting their savings to us, short of capital controls to block those flows, our trade deficit will also persist."
Paine -> Christopher H.... May 27, 2017 at 02:10 PM
Nonsense. We can force Germany to build more cars here. In fact we can tell the German MNCs to build all their north American cars here. Including parts and accessories. German MNCs have no patriotic urge we couldn't subvert with market threats. Or Japanese MNCs for that matter. Push back ?
Sorry we are the global market of choice we shut you out and you decline to secondary status. Violate the code of MNCs liberty to jump borders at will ?
Now that is a horse of a darker shading
Christopher H. said... May 27, 2017 at 09:22 AM
"Yet Germany's huge trade surpluses are a problem * - which has nothing to do with trade policy."
Macro policy is sort of trade policy as Bernstein points out above. Instead of this neoliberal ideal of a free market in international trade without trade policy or government interference, we really need governments to manage trade, or at least manage their macro with trade policy in mind.
As Bernstein suggest:
"King suggests that the best solution is for deficit countries to get together with surplus countries and, a la Bretton Woods, figure out a "mutually advantageous path to restore growth." That sounds a bit pie-in-the-sky until you consider the economic shampoo cycle ("bubble, bust, repeat") that's been so repeatedly damaging to countries across the globe."
In the 1980s, the dollar was getting too strong until governments managed trade and currency policy via the Plaza Accords which brought the dollar down. It was trade policy.
It wasn't policy to change savings rates or something that the mainstream economists focus on.
Christopher H. -> to pgl... May 27, 2017 at 10:41 AM
"The exchange rate value of the dollar versus the yen declined by 51% from 1985 to 1987. Most of this devaluation was due to the $10 billion spent by the participating central banks. Currency speculation caused the dollar to continue its fall after the end of coordinated interventions. Unlike some similar financial crises, such as the Mexican and the Argentine financial crises of 1994 and 2001 respectively, this devaluation was planned, done in an orderly, pre-announced manner and did not lead to financial panic in the world markets. The Plaza Accord was successful in reducing the U.S. trade deficit with Western European nations but largely failed to fulfill its primary objective of alleviating the trade deficit with Japan."
Since the coordinated actions of central banks led to the devaluation of the dollar and reduction of the trade deficit, I'd say it was currency and trade policy as well.
"The justification for the dollar's devaluation was twofold: to reduce the U.S. current account deficit, which had reached 3.5% of the GDP, and to help the U.S. economy to emerge from a serious recession that began in the early 1980s."